Wells Fargo Charged with ‘Aiding and Abetting’, Alleged $300 Million Ponzi Scheme with More than 1,000 Victims: Report

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

Plaintiffs in the lawsuit accuse the U.S. bank of unjust enrichment, negligence, facilitating and inciting fraud and breach of fiduciary duty, the Sun Sentinel reported.

In July 2021, the Florida Office of Financial Regulation (OFR) sued insurer 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 worth of promissory notes allegedly secured by life settlement policies.

But OFR found that Seeman Holtz used funds from new investors to pay existing investors to create the illusion of profitability. At the time, Seeman Holtz opened an account with Wells Fargo that held funds from new and existing investors.

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

“Wells Fargo knew, or should have known, about the Ponzi scheme and widespread fraud,” the plaintiffs say. Because the big banks monitored “both sides of the plan.”

The Ponzi scheme victimized more than 1,000 victims, including senior citizens and investors who lost all their money after being promised annual returns of up to 18%, according to the lawsuit.

“Most investors who invested in bonds lost their entire investment, in some cases their entire life savings. “Many investors have no other income, live almost entirely on Social Security benefits, and are now desperately struggling to find the means to make ends meet.”

The lawsuit demands that Wells Fargo return all income and fees it received from accounts associated with the plan, in addition to interest and other fees.

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

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