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Bank of America Faces Lawsuit Over Alleged Role in $102M Ponzi Scheme

June 28, 2018

Bank of America is facing a lawsuit claiming it provided more than 100 accounts used in a $102 million Ponzi scheme, Bloomberg writes.

The suit comes following an SEC complaint filed earlier this month charging five men and three companies of running the scheme, in which they paid themselves $20 million and paid $38.5 million in Ponzi-like payments.

In the lawsuit filed Monday in federal court in Ocala, Fla., a brother and sister seeking to recover losses in their late father’s investments allege the schemers “could not have perpetuated their scheme without the knowing assistance of their primary banking institution, Bank of America, which lent the scheme an air of legitimacy and provided critical support, including at times when the scheme would have otherwise collapsed," Bloomberg writes, citing the complaint.

The bank allegedly failed to identify suspicious activity, such as hundreds of thousands of dollars worth of deposits being made into accounts with small or even negative balances and subsequent transfers within the same week to investors or into other accounts, according to the complaint cited by the news service.

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One of the alleged fraudsters once paid someone to write a song about him for a Las Vegas party, with lyrics touting his $10,000 suits and his partner’s penchant for champagne, according to the lawsuit, Bloomberg writes.

A Bank of America spokesman declined comment to the news service.

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here.