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RSA in Line to Recoup $21 Million Over Railcar Deal Settlement

FreightCar America began rail car production in late 2013 in a portion of the sprawling plant built in the Shoals by National Alabama Corp., a subsidiary of Canadian National Steel Car, and financed by Retirement Systems of Alabama. RSA officials are still shopping for more occupants of the nearly mile-long building. The plant was completed on the eve of the recession in 2008.

FreightCar America began rail car production in late 2013 in a portion of the sprawling plant built in the Shoals by National Alabama Corp., a subsidiary of Canadian National Steel Car, and financed by Retirement Systems of Alabama. RSA officials are still shopping for more occupants of the nearly mile-long building. The plant was completed on the eve of the recession in 2008.

The wheels of justice turn deliberate and true, even when mounted to a troubled railcar deal. Now the case is over and the Retirement Systems of Alabama can expect $21 million in damages, according to court documents.

The deal was over the mile-long National Alabama Railcar Plant in western Colbert County, now being leased by Navistar Inc. for the purpose of railcar fabrication. 

The trouble came in November 2013 when Canadian businessman Gregory Aziz was charged with 11 counts of securities fraud related to a three-year loan of $350 million he sought from RSA, according to the indictment, to build the plant. The December issue of the RSA Advisor, in an article by Marc Green, reports that Aziz will be required to pay $21 million to RSA and to reimburse the Alabama Securities Commission and the Colbert County District Attorney’s Office for investigative costs associated with the case. As part of the deal, Colbert County Circuit Court Judge Jaqueline M. Hatcher dismissed securities fraud charges against Aziz.

The facility was to employ more than 2,000 people and be a major industrial development coup for the state. According to the 2013 complaint, Aziz represented, among other things, that he could build it for $350 million and had an extensive and unencumbered line of credit. RSA was forced to spend an additional $215 million to complete the railcar plant and in 2010 took over ownership of 100 percent of the stock in the plant from Aziz. 

The case was pursued by Bryce Graham, district attorney for the 31st Judicial Circuit, Colbert County; and Joseph Borg, director of the Alabama Securities Commission.

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