Wells Fargo Accused of ‘Aiding and Abetting’ Alleged $300,000,000 Ponzi Scheme With More Than 1,000 Victims: Report

A new lawsuit accuses Wells Fargo of monitoring “both sides” of an alleged $300 million Ponzi scheme and doing nothing to stop it.

Plaintiffs for the lawsuit accuse the US bank of unjust enrichment, negligence, aiding and abetting fraud and breaching fiduciary duties, reports the Sun Sentinel.

In July of 2021, the Florida Office of Financial Regulation (OFR) filed a complaint against insurance company Seeman Holtz for multiple violations of securities laws. The complaint alleges that Seeman Holtz engaged in the sale of unregistered securities after issuing $300 million in promissory notes that were supposedly backed by life settlement policies.

But the OFR says Seeman Holtz used the funds from new investors to pay off older investors to create the illusion of profitability. At the time, Seeman Holtz set up accounts at Wells Fargo that held funds from new and old investors.

According to the lawsuit, Wells Fargo allowed Seeman Holtz to redirect money from new investor accounts to accounts designed to hold old investor funds.

Plaintiffs say that “Wells Fargo knew, or should have known, of the Ponzi scheme and extensive fraud” because the banking titan monitored “both sides of the scheme.”

The lawsuit says the Ponzi scheme fleeced over 1,000 victims, including seniors and investors who lost their entire nest egg after being promised annual returns of as much as 18%.

“Most of the investors in the notes have lost their entire investment which, in some instances, was their life’s savings. Many of the investors have no other income, subsist almost exclusively off Social Security benefits, and are now struggling desperately to find the means to sustain their livelihood.”

The suit is asking Wells Fargo to return all income and fees received from the accounts involved in the scheme on top of interest and other costs.

Wells Fargo has not yet responded to the lawsuit and says it has no comment.

 

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