A Houston investment fund, which started as a promising money-maker for a group of wealthy, well-connected acquaintances, has ended in a Texas district court with accounting firm KPMG on the hot seat.

Investors include the Staley family, founders of the Chicago Bears, the man who brought Nintendo to America, the Cullen family and a former Harris County (Texas) District Attorney, who have all made wise investments in the past. This particular investment fund, put together by a man named Charles Underbrink, was not one of them.

The Houston Chronicle reported that the investors are suing KPMG, alleging negligent accounting, investment fraud and conspiracy to withhold damaging information from the limited partners, who are seeking more than $28 million.

“Wealthy people are really no different than people with 401(k)s," said John Zavitsanos, a lawyer representing the investors. "If they see something that appears to be successful, other people like them are in it and a national accounting firm is watching it, they get in with the same level of care as anyone.”

KPMG spokesman Tom Fitzgerald told the newspaper that the firm was retained solely to audit the financial statements of the funds and not to monitor compliance with the funds' investment guidelines or strategy.

"KPMG fully complied with all applicable professional standards," Fitzgerald said. "Investment decisions and strategies were the responsibility of the general partners in the funds themselves."

Bob Staley said his Chicago broker recommended investing in the partnership, which would make short-term corporate loans. His broker estimated an 8 percent annual return, and with KPMG auditing the books, “I felt good about that,” he said. Staley and his brothers, whose grandfather founded Chicago Bears football team, invested $1.75 million.

In all, rich investors put $73 million into St. James Capital Partners and St. James Merchant Bankers between 1995 and 1998. The two Houston partnerships took on projects other than bridge loans, including investing in troubled companies.

Paul Dobrowski, Underbrink's lawyer, said the investors knew the investments would be made on "below the radar" or "on the verge" companies. Some will make money, he said. "I'm guessing they're just unhappy they haven't made more money.”

Ronald Judy, of Nintendo fame, put $2 million into the limited partnership but agreed with a fellow investor to hire another auditor to look into the underlying investments.

"It was year after year after year of bad audits,” Judy said.

One of the investors' lawyers said that KPMG knew that a former KPMG tax manager had alleged fraud in a 1999 lawsuit he filed against the general partners; KPMG gave the partnership a clean audit instead of looking into the charges.

"We stand by the unqualified audit opinions on the 1995 to 1999 financial statements of St. James Capital Partners and on the 1998 and 1999 financial statements of St. James Merchant Bankers," KPMG's Fitzgerald said.