Eide Bailly Accused of “Turning a Blind Eye”

Fargo, N.D.-based Eide Bailly (FY12 revenue of $157.7 million) has been accused of helping DBSI, a bankrupt property management company, defraud investors of hundreds of millions of dollars, according to a federal lawsuit.

Court papers allege that Eide Bailly “turned a blind eye” to misstatements in DBSI financial statements it audited and helped “company insiders” distort the financial health of the company by failing to disclose financial misrepresentations, the Idaho Statesman reported. Eide Bailly audited several of DBSI’s companies between 2004 and 2007, according to court papers.

The lawsuit was filed by two trusts attempting to recover assets from DBSI, which once managed up to 244 commercial properties.