Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
A Plainfield company is fighting to recover $34.7 million after it says a former business associate orchestrated an elaborate, long-running fraud scheme.
MBC Group Inc., a minority- and veteran-owned business that offers services in corporate bartering and staffing, filed its complaint last week in the Southern District of Indiana, alleging several entities and individuals violated federal racketeering laws by obtaining and maintaining unauthorized control over MBC Group and diverting the company’s funds for their own benefit.
On Wednesday, Southern District Court Judge Justin Olson issued an ex parte temporary restraining order against the defendants, locking their accounts to preserve evidence.
William McClain, one of the key defendants, did not respond to The Indiana Lawyer’s email requesting comment.
According to court documents, McClain approached Eric Holloway in 2009 with an offer to help start a company — MBC Group. Holloway is a service-disabled veteran that spent 20 years in the U.S. Army as a weapons system specialist.
In 2012, MBC was joined by NFL Hall of Fame running back Jerome Bettis as managing partner.
McClain already had a breadth of business experience. Between 1995 and 2009, the complaint stated, McClain and defendant Marjorie McClain built a network of staffing, consulting and funding companies. The two handpicked associates to take on financial and administrative roles within the companies, according to the complaint.
After McClain connected with Holloway to create MBC Group, McClain allegedly positioned the company within his and Marjorie’s network of entities, associates, accountants and attorneys.
“This structure allowed Bill (William McClain) to control the flow of both money and information across the related companies and to the companies’ shared outside accountants, lawyers, and banks,” the complaint stated.
Marjorie McClain and CFA Staffing, another named defendant and one of the McClains’ reported entities, also did not return The Lawyer’s email requesting comment.
According to the lawsuit, shortly after MBC Group was formed, William McClain started directing a financial associate to transfer funds between MBC Group and his other entities.
When later questioned about several irregularities in MBC’s accounts, McClain allegedly lied to conceal the scheme.
The suit alleges McClain and his associates used a “complex web of forged and fraudulent documents and hundreds of illegal financial transactions” in their scheme.
According to the complaint, McClain took more than $10 million in unauthorized compensation in 2021 and more than $13 million in compensation in 2022.
“This large-scale corporate raiding was possible because Bill and his associates had constructed an ecosystem of interrelated companies, designed specifically to facilitate and conceal the systematic theft and fraud carried out upon MBC Group and others,” the complaint stated.
MBC Group requested an ex parte temporary restraining order to freeze the defendants’ funds. The court granted it earlier this week.
“The specific allegations that sound in fraud are stated with particularity, referencing the who, what, when, where, and why of specific transactions and providing robust detail,” wrote Judge Olson in granting the restraining order.
The case is MBC Group, Inc., v. William McClain, et al., 1:26-cv-01517-JRO-TAB.
Correction: The lawsuit was filed in the Southern District of Indiana. The story has been corrected.
Please enable JavaScript to view this content.