Jury Decides US Bancorp to Pay $17.6 Million in Ponzi Scam
Jury orders U.S. Bancorp to pay $17.6 million in Ponzi scheme
The Associated Press
Article Launched: 12/14/2007 12:02:22 PM PST
SANTA ANA, Calif.—A jury has ordered U.S. Bancorp to pay $17.6 million in a civil lawsuit brought by the trustee overseeing the bankruptcy of a company that defrauded investors out of $45 million.
The Orange Country Superior Court jury concluded last week that the bank should have known about fraudulent accounts that it opened for operators of Newport Beach-based DFJ Italia Ltd.
Seven people have pleaded guilty to federal charges stemming from the financial scam, which ran from 1996 to 2000.
The company promised annual returns of 24 percent, but investors’ money was instead directed to the people who ran the scam and to pay other investors. Among those who lost money in the scheme was former pro football star running back Eric Dickerson.
DJF Italia sought Chapter 7 bankruptcy protection in 2000.
Bankruptcy trustee Thomas H. Casey sued U.S. Bancorp, Wells Fargo Bank and City National Bank two years later, claiming the financial institutions aided and abetted DFJ Italia’s operatives by failing to discover their bogus bank accounts.
Wells Fargo Bank and City National Bank earlier reached settlements in the suit.
During last week’s trial, two of the men behind the scheme testified they had bribed employees of Minneapolis-based U.S. Bancorp and opened accounts at the company’s retail bank branches without proper documents.
U.S. Bancorp attorneys argued it shouldn’t be held responsible for the actions of criminals and urged jurors not to believe the scammers’ testimony.
The bank plans to appeal the jury’s verdict.
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