🚨 SCOOP: Celtic Bank engaged in racketeering, conspiracy to defraud, explosive new lawsuit in Water Station Ponzi case alleges: A civil case filed yesterday in U.S. District Court in Utah is the latest lawsuit in a sprawling alleged Ponzi scheme linked to as much as $115 million in SBA-backed loans. The scope of the role of SBA loans in the scheme was first reported by Fintech Business Weekly in early August and confirmed weeks later by @Bloomberg's @sparkyrandles and @ArroyoNieto. The new suit is filed on behalf of nine individuals who serve as guarantors for the SBA loans their affiliated companies used to make the purported "investments" in Water Station. One of the individual plaintiffs, Tyler Sadek, served as now-defunct Water Station's chief financial officer. The suit names Celtic and the bank's head of SBA lending, Scott Foster, as defendants. Foster, together with his wife Jennyfer, took an SBA loan through an LLC they controlled from another bank to invest in Water Station, publicly available SBA records show. But, Celtic and Foster failed to disclose this conflict of interest, plaintiffs in the suit claim. Water Station steered potential "investor" franchisees to Foster and Celtic, and, despite knowing that Water Station's franchise model should not qualify for the SBA 7(a) program, which only permits "active," not "passive," franchises, Celtic provided over $17 million in SBA-backed financing, the suit says. Foster benefited from facilitating these loans by striking a side deal with Water Station to earn a higher rate of return and, when he began to suspect the company was not legitimate, demanded and received repayment of his investment, according to the complaint. Celtic benefited from packaging fees, collateral review, documentation fees, and interest payments on the loans, which amounted to millions of dollars, the plaintiffs say. Now, Celtic is threatening legal action up to and including foreclosure of real property, including some borrowers' residential homes -- and has commenced foreclosure proceedings against certain individual plaintiffs, the filing says. The complaint argues that Celtic was part of a RICO enterprise along with Foster, the various Water Station entities, Water Station founder Ryan Wear (who was recently criminally charged), and two other banks, UniBank and First Fed, which are not named defendants in this complaint. The suit argues numerous causes of action, including fraud, conspiracy to defraud, negligence, breach of fiduciary duty, RICO violations, and securities violations. Among other relief, the plaintiffs ask the court to find the loan agreements and personal guarantees to be void and unenforceable.