Bank Of America Accused Of Enabling Ponzi Scheme (BAC)

[maddezmom]

Bank Of America Accused Of Enabling Ponzi Scheme (BAC)
Lawrence Delevingne|Oct. 27, 2009, 12:58 PM | 466 |

BAC Oct 27 2009, 01:48 PM EDT
Did Bank of America (BAC) boost a Ponzi scheme?

That's what a new Florida class action suit says, alleging that BofA "aided and abetted" a $37 million foreign exchange fraud run by disgraced wealth adviser Beau Diamond (pictured) and his investment club Diamond Ventures.

"From the beginning, BOA actively assisted Diamond's fraudulent scheme," the suit says, noting the bank's 32 month alliance with Diamond. "Despite an intimate understanding of Diamond's fraudulent enterprise, BOA asked no questions and instead bolstered its relationship."

According to the FBI, Diamond's forex trading scheme stole from 200 victim investors who contributed nearly $38 million into Diamond's fund, "all of which was dissipated through Ponzi distributions, losing trades, and diversions to Diamond for his personal benefit."

Many of the investors lost their live savings and want the money back.

As Courthouse News notes, BofA allegedly facilitated the fraud by allowing offshore wire transfers, commingling of accounts, access to unlicensed trading in foreign exchange markets, and a banking platform that facilitated conversion of investors' funds. And BofA's "Premier Bankers" authorized wire transfers of more than $700,000 to Diamond's personal account, according to the complaint, including charges at big Las Vegas hotel-casinos.

more:http://www.businessinsider.com/bank-of-america-accused-of-enabling-ponzi-scheme-2009-10

[Joanne98]

1. Well isn't that interesting. K&R

[louis-t]

2. That's my bank, a bunch of crooks.

If this isn't swept under the rug, it could be big. Ah, they'll just raise their fees some more and pay someone off.

[marmar]

4. I keep a Skank of America account because they have so many ATMS everywhere....

..... but I've switched most of my actual banking over to a credit union.

[Octafish]

3. Shocking! And Bernie Madoff once headed NASDAQ.

To think of the depths to which Wall Street will descend for the Almighty Dollar.

Columbia, for instance.

[AllentownJake]

5. This institution should have been allowed to collapse

It probably will collapse anyway, but I'm glad I'll be paying for the bailout and the money they got funneled through AIG at my fellow citizen's expense.