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Numerous alleged improprieties at Argon Credit, possibly including fraud

Just hours after Lending Times reported that Argon Credit filed for Chapter 11 bankruptcy, an anonymous source told us about improprieties at Argon Credit.

According to the anonymous source, which wishes to remain confidential, Argon Credit has demonstrated a number of improprieties. Argon allegedly, according to our source, misrepresented data in due diligence for lending capital and then used the money to buy personal items such as clothes.

Furthermore, our previous article mentioned Princeton and Fintech LLC as the main investors in Argon. We have since found out that Spartan Specialty Finance was also an investor in Argon. Details of the relationship can be found in a Master Consumer Loan Purchase Agreement dated May 1, 2015, Argon Credit lists Fintech Financial LLC as the lender of certain loans. The document can be found here. We were told that due to these improprieties the Federal Bureau of Investigation is conducting an investigation for financial fraud.

Our source also mentions that Argon Credit pledged the same loans to both Princeton Alternative Income Fund, LP and Spartan Specialty Finance I SPV, LLC. Spartan has subsequently filed for bankruptcy (document can be found here) and Princeton’s assignee, Fund Recovery Services, LLC (FRS), has filed a motion in the New York Southern Bankruptcy Court (which can be found here) to prohibit Spartan from using property FRS claims belongs to them.

Argon Credit, a provider of consumer loans, was founded in 2014. By May 2015, the company had raised more than $90 million in five rounds of funding. The Chicago Tribune reported in August 2015 that the company received $75 million in debt funding from Princeton. Arakelian left the company not long before then, The Tribune reported, but the reason for his leaving was not reported.

Both Raviv Wolfe, CEO of Argon Credit, and Jack Cook, chief operating officer of Princeton Alternative Income Fund denied commenting on this story.

It appears that these improprieties were not completely unexpected. One of the company’s founders, former Chief Operating Officer Berj Arakelian, has allegedly been previously convicted and jailed for a financial felony.

“They refused to let him go, which prevented reputable organizations from working with Argon Credit,” the source said.

There will be a hearing regarding FRS’s motion on December 29, 2016.

Authors:

Allen Taylor
Allen Taylor
George Popescu
George Popescu

About the author

George Popescu

Serial entrepreneur.

I sold and exited my most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. I was the Founder and CEO which I boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 I was Head-of-Strategy for Currency Mountain ( www.currencymountain.com ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, I founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. I advised 30+ early stage start-ups in different fields. I was also a mentor at MIT’s Venture Mentoring Services and Techstart Fintech in NY.

• Previously I obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously I worked as a visiting scientist at MIT in Bio-engineering for 2 years. I had 3 undergrad majors: Maths, Physics and Chemistry. My scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• I am originally from Romania and grew up in Paris, France.

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