Bank of America sued over ‘Ponzi scheme’

Bloomberg

Bank of America Corp. was accused in a lawsuit of providing more than 100 accounts used to perpetrate what the US regulators called a $102 million Ponzi scheme.
The class-action suit filed on behalf of people who lost money follows a complaint last week by the Securities and Exchange Commission alleging that five men and three companies defrauded more than 600 investors.
One of the alleged ringleaders once commissioned a song about himself for a party in Las Vegas with lyrics celebrating his $10,000 suits and his partner’s affinity for champagne, according to a complaint in federal court in Ocala, Florida.
The brother and sister who sued to recover losses from their late father’s investment claim the fraudsters “could not have per- petuated 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,” according to the complaint.
Bank of America spokes-man Bill Halldin had no immediate comment on the suit. The lender is accused of failing to spot suspicious activity, including deposits of hundreds of thousands of dollars into accounts with relatively small, negative or nonexistent balances.