Tacoma-based bank sued as part of Ponzi scheme that cost investors $230M
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- Columbia Bank among those facing lawsuits over iCap’s activities, with focus on activities at Umpqua branch.
- Complaint alleges lax oversight benefited iCap in Ponzi scheme.
- Court to assess iCap investor losses; Columbia vows vigorous legal defense.
Tacoma-based Columbia Bank has been drawn into a lawsuit spawned from a sprawling real-estate Ponzi scheme that included a Tacoma property.
On Sept. 26, the iCap Liquidating Trust filed new lawsuits against parties alleged to have enabled or profited from the scheme.
Among them is Umpqua Bank, which in March 2023 completed a merger with Columbia Bank. Umpqua was rebranded as Columbia last month.
iCap Liquidating Trust was established through iCap’s bankruptcy process to recover losses for more than 1,800 investors who collectively lost about $230 million.
The Bellevue investment firm sought Chapter 11 bankruptcy protection in September 2023. About a year later it was determined iCap had been running a Ponzi scheme starting no later than October 2018, according to a judge’s ruling in the U.S. Bankruptcy Court for the Eastern District of Washington.
According to court filings, iCap reportedly used investors’ money to repay other investors instead of relying on profits from promised development projects.
Now, the U.S. District Court Western District in Seattle will hear a lawsuit seeking damages from iCap’s bank over investors’ losses, with the amount of monetary relief to be determined in a jury trial.
Columbia Bank is among those sued as a result of Umpqua Bank’s actions when iCap was reportedly the Umpqua Issaquah branch’s largest customer.
The lawsuit argues that Umpqua took pains to go above and beyond in servicing iCap entities’ interests, where “no request from iCap was too large,” according to the complaint. The lawsuit accuses Umpqua of aiding and abetting fraud and breach of fiduciary duty tied to banking activity and cash handling.
In response to questions from The News Tribune, Columbia Bank responded with an emailed statement: “Columbia Bank is aware of the lawsuit, has previously disclosed the potential of such legal proceedings several times, and intends to vigorously defend our bank against any and all claims.”
It added, “We do not intend to comment further on ongoing litigation.”
Columbia has yet to file an initial response in court to the complaint.
Kurt Heath is corporate communications director for Columbia Bank. He noted via email, “In terms of disclosure, the bank has provided an update on this legal matter in a quarterly financial report filed with the SEC since May 2024.”
Columbia announced its plans to merge in October 2021 with Portland-based Umpqua.
‘Bags of cash’
The lawsuit against Columbia contends that Umpqua could see how iCap was shuffling money around before iCap’s default and the bankruptcy judge’s subsequent Ponzi-scheme ruling.
The filing contends improper conversion of investor funds to iCap’s CEO or its entities over a decade totaled an “aggregate amount” of more than $30 million. The money was used for variety of things, including “personal lifestyle expenses,” vacation homes or to repay personal debts.
“The vast majority of funds deposited by the iCap entities into their Umpqua bank accounts came from Investors, intercompany transfers, and external lenders, rather than being generated through business operations,” the court filing states.
“Ponzi schemes are characterized, in part, by obtaining funding from investors’ deposits and intercompany transfers, not from business operations,” it added.
The court filing details Umpqua vice president and former branch manager (subsequently community manager) Svetla Tzekov offering abundant help to iCap’s leading executives, CEO Chris Christensen and chief operating officer Jim Christensen, who are brothers.
It contends Tzekov didn’t even wait “for requests to be made before offering assistance.”
The complaint notes the bank official’s actions, along with those of her superiors, likely were motivated by Umpqua’s internal “culture” which “linked performance reviews and compensation incentives for bank employees to client account deposit volume, incentivizing its employees to keep deposit accounts at the bank.”
According to the lawsuit, “If the Issaquah branch lost some or all of iCap’s deposits, that would have a significant effect on whether the branch and its employees were deemed successful by Umpqua, how much they were paid, and potentially even whether they would keep their jobs.”
Tzekov’s and other workers’ internal emails are used as evidence against the bank. Tzekov did not respond to an emailed request for comment Tuesday from The News Tribune.
The complaint also notes that the bank denied one of the iCap principals a home loan.
In 2019, the bank’s senior consumer underwriter, “sought additional diligence from Tzekov on ‘how [the] business operates as the ordinary income for these businesses is showing huge losses in the millions but [Chris Christensen] is pulling a salary and or guaranteed payment,’” the complaint stated.
“Umpqua thus took care not to risk its own funds based on its knowledge of iCap’s ‘huge losses,’” the complaint stated. “Unfortunately ... it did not act on the same information to shut down the Ponzi scheme.”
The lawsuit also noted, “It was not unusual for iCap to make large physical cash deposits – oftentimes brought to Umpqua in bags of cash.”
It added, “iCap never explained to Umpqua why a purported real estate investment company needed to make physical cash deposits.”
The bank considered iCap “high risk” given 17 enhanced “due diligence” reviews on “various iCap Entities or affiliates between August 24, 2021 and November 21, 2023.”
In an attempt to head off losing iCap to another bank over lower fees, it shows management above Tzekov communicating with each other in gaining approval of their “’proposal to retain this very important customer to the bank.’”
The filing later reveals that in information not disclosed to Umpqua by the iCap principals, the competing bank had already decided against taking on iCap and its entities after determining it “would be unable to provide the necessary oversight to stay compliant with the regulatory requirements.”
“When the Christensens informed Umpqua that they would continue to keep the accounts at Umpqua, numerous congratulatory emails were circulated internally within the bank,” the complaint states.
“In light of Umpqua’s policies, Tzekov and the Issaquah branch employees had much to celebrate. The iCap Investors did not,” it added.
Other lawsuits
Other entities the trust has sued regarding the bankruptcy include Perkins Coie law firm, Chris and Jim Christensen and affiliated entities, and Marcus & Millichap Capital Corp., among others.
In the trust’s lawsuit against the Christensens and affiliated entities, a mention of the Tacoma property owned by 725 Broadway LLC, an iCap-affiliated entity, is included.
The LLC owned the Tacoma site commonly known as Graffiti Garages. The property, 716 to 728 Commerce St., is set to be sold at a sheriff’s sale in Pierce County in October. The proceeds are to collect on debt owed to Oak Hills Construction for work at the site.
The trust’s lawsuit quotes from a fall 2022 email sent by Neil Peritz, iCap Entities’ vice president of finance, in response to a financial spreadsheet shared by Jim Christensen. According to the filing, Peritz wrote that certain numbers were “not even in the ballpark” of what was reflected on the iCap Entities’ consolidated balance sheet, including for the Tacoma site.
“UW and 725 Broadway numbers make no sense to me,” the filing quotes the email. “UW hasn’t started development and 725 Broadway is a parking garage we are demolishing soon to develop so how [do] you get $19.3 [million] in equity on that one?”
The Christensens and related entities have not yet responded to the lawsuit.
Last year, The News Tribune reported that the Tacoma garage site was part of an investor lawsuit going back to August 2023. Among other issues, that lawsuit contended that iCap properties including the Tacoma site were marketed in a new venture called Invalus, “and that iCap’s obligations to repay Plaintiffs would be converted into a proportionate share of equity in this new entity.”
Later in September 2023, 725 Broadway LLC entered Chapter 11 bankruptcy as part of a larger filing among the other entities tied to iCap.
Previous reporting from The News Tribune contributed to this report.
This story was originally published October 1, 2025 at 12:35 PM.
