A group of investors won a court order freezing the assets of Sacramento businessman Deepal Wannakuwatte, the owner of the former Sacramento Capitals tennis team whos been jailed on fraud charges.
A federal judge in Sacramento issued a temporary restraining order this week freezing the assets of Wannakuwatte and his medical-supply business, International Manufacturing Group Inc. of West Sacramento.
A group of approximately 20 investors represented by a North Carolina investment firm sued Wannakuwatte and International Manufacturing last week, eight days after the FBI arrested the businessman on charges of masterminding a $125 million Ponzi scheme.
The investors loaned him $2.3 million in mid-February, barely a week before his arrest, according to court papers. The money was supposed to go toward a planned factory in Olivehurst.
The investors planned to loan a total of $3 million but Wannakwatte was arrested before the thing was fully funded, said David Cheit, a lawyer in Sacramento for the investors.
The lawsuit represents the first response by investors since Wannakuwatte was arrested by the FBI on Feb. 20. He has been held without bail, although a bail hearing is set for Thursday in U.S. District Court in Sacramento.
The FBI said Wannakuwatte lured investors by telling them he had contracts worth $100 million to sell latex gloves to veterans hospitals. The reality was his contracts with the U.S. Department of Veterans Affairs were worth just $25,000 a year, the FBI said.
The lawsuit was filed by an affiliate of Carolina Financial Securities, an investment firm in Brevard, N.C. The inidividal investors werent identified in the court papers. Matthew Jacobs, another lawyer for the investors, said they appear to have come from all over the United States.
The temporary restraining order freezing the assets was granted by U.S. District Judge John Mendez.
Call The Bees Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.