The court action was filed last week against Wells Fargo Bank in connection with an estimated $500M Ponzi scheme allegedly operated by a Las Vegas-based lawyer.
The litigation was brought against the San Francisco-based financial institution by a court-appointed receiver, Geoff Winkler, CEO of American Fiduciary Services, who was directed by a federal judge to unravel the complex situation.
The suit claims the bank should have been aware of what was happening to the accounts used by Attorney Matthew Beasley. The accounts held money belonging to his clients.
From a bank’s perspective, the fraudulent scheme was obvious,” the lawsuit stated. “A Ponzi scheme of this magnitude cannot run surreptitiously through an IOLTA [Interest on Lawyers Trust Account] and various related-party accounts.”
Also, actions by bank employees provided “active assistance” to the scheme, according to the lawsuit.
The litigation was brought against the San Francisco-based financial institution by a court-appointed receiver, Geoff Winkler, CEO of American Fiduciary Services, who was directed by a federal judge to unravel the complex situation.
The suit claims the bank should have been aware of what was happening to the accounts used by Attorney Matthew Beasley. The accounts held money belonging to his clients.
From a bank’s perspective, the fraudulent scheme was obvious,” the lawsuit stated. “A Ponzi scheme of this magnitude cannot run surreptitiously through an IOLTA [Interest on Lawyers Trust Account] and various related-party accounts.”
Also, actions by bank employees provided “active assistance” to the scheme, according to the lawsuit.