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Newtek Business Services says 5 former employees of unit taken into custody

Newtek Business Services Corp. on March 22 said five former employees of unit ADR Partners LLC, which does business as banc-serv Partners LLC, were taken into custody over a federal investigation into their alleged conduct before Newtek acquired the company.

Newtek said after its $5.4 million investment in banc-serv, the Federal Bureau of Investigation issued a search warrant on banc-serv to probe its offices in Westfield, Ind., and outside counsel was retained to conduct an investigation.

Newtek added that beginning in 2018, banc-serv's customers were given the opportunity to contract the services of another lender-service portfolio company under them. The company said a majority of these customers had used this option as of March 15.

Newtek said the issue would not materially affect its financial condition or its operations.