A brand new lawsuit accuses Wells Fargo of monitoring “each side” of an alleged $300 million Ponzi scheme and doing nothing to cease it.
Plaintiffs for the lawsuit accuse the US financial institution of unjust enrichment, negligence, aiding and abetting fraud and breaching fiduciary duties, stories the Solar Sentinel.
In July of 2021, the Florida Workplace of Monetary Regulation (OFR) filed a grievance in opposition to insurance coverage firm Seeman Holtz for a number of violations of securities legal guidelines. The grievance alleges that Seeman Holtz engaged within the sale of unregistered securities after issuing $300 million in promissory notes that had been supposedly backed by life insurance coverage insurance policies.
However the OFR says Seeman Holtz used the funds from new buyers to repay older buyers to create the phantasm of profitability. On the time, Seeman Holtz arrange accounts at Wells Fargo that held funds from new and outdated buyers.
In accordance with the Solar Sentinel, the lawsuit alleges Wells Fargo opened 31 financial institution accounts on behalf of Seeman Holtz firms, stating “Wells Fargo knew, or ought to have identified, of the Ponzi scheme and intensive fraud” as a result of the financial institution presided over “each side of the scheme.”
“The financial institution additionally knew, or ought to have identified, that three units of firms ‘comingled and transferred investor cash between the Wells Fargo financial institution accounts with none respectable goal or monetary association,’ the go well with states.”
The Ponzi scheme fleeced over 1,000 victims, together with seniors and buyers who misplaced their total nest egg after being promised annual returns of as a lot as 18%, in keeping with the lawsuit.
The go well with is asking Wells Fargo to return all earnings and charges obtained from the accounts concerned within the scheme on high of curiosity and different prices.
Wells Fargo has not but responded to the lawsuit and says it has no remark.
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