Brooke Corp. Sued for Racketeering

April 10, 2009

More than 80 former insurance agents for bankrupt Brooke Corp. have sued the company’s lending arm, accusing company officials of civil racketeering and fraud.

The lawsuit against Aleritas Capital Corp. was filed in federal court in Kansas City, Kan., Wednesday.

Aleritas financed the plaintiffs’ purchase of their insurance agencies from Brooke. The lawsuit alleges that Aleritas and Brooke inflated the price of the franchises and didn’t provide the help they promised, forcing many of the franchisees to pay continued high fees or go broke. The suit claims this was intentional so that the company could resell the agencies again.

Overland Park, Kan.-based Brooke filed for bankruptcy last fall.

A special master overseeing the company didn’t immediately return a phone call for comment Thursday.

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