A group of lenders sued OppenheimerFunds Inc, an investment subsidiary and an advisory company, accusing it of wrongfully procuring $1.8 billion in loans from March 2006 to September 2007 to buy investments that were too risky to meet lending agreements.

The plaintiffs, in a suit filed Friday in the New York State Supreme Court, allege that AAArdvark I Funding Limited, an investment vehicle established by Oppenheimer, borrowed funds at a low interest rate to buy higher-yielding securities selected by Harbourview Asset Management Corp that violated loan terms.

They also allege that Oppenheimer failed to identify the contract violations for 18 months, which caused Harbourview to file 241 false certifications to lenders, thereby keeping the line of credit open, the court document said.

By September 2007, the investments, including stakes in Countrywide and GMAC, were not generating enough income to pay interest and other fees and expenses, it said.

At that time Oppenheimer notified the lenders that an amortization event had occurred and that AAArdvark was unable to satisfy the terms of the lending agreement.

The defendants have refused to return the borrowed funds totaling nearly $1.8 billion.

The plaintiffs include lenders TSL (USA) Inc.; Bryant Park Funding LLC; Liberty Street Funding LLC; Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., Rabobank Nederland, New York Branch ; Credit Agricole Corporate and Investment Bank ; and Royal Park Investments SA/NV.

OppenheimerFunds, majority-owned by Massachusetts Mutual Life Insurance Company , could not immediately be reached for comment.

(Reporting by Karl Plume; Editing by Bill Trott)