While the Nebraska litigation was ongoing, the Karney Group defaulted on loan obligations related to BMO Harris and maintained possession of the underlying real estate assets.

They reportedly collected rental payments in cash without proper accounting or distribution to relevant stakeholders. The properties were later found to be in a deteriorated condition, Fire code violations , bug infestations , contributing to substantial equity loss.

Following the asset disposition, it has been reported that victims were required to pay an additional $160,000 to BMO Harris to satisfy remaining liabilities and close out the matter.