Thousands of investors who were bilked out of money in a Ponzi scheme have filed a class-action lawsuit against Wells Fargo, according to Think Advisor.
The suit, filed in the U.S. District Court for the Southern District of Florida, alleges that Wells Fargo facilitated the scheme that was orchestrated by 45-year-old Sanjay Singh through his investment entity, Royal Bengal Logistics. (RBL)
About 2,000 investors lost $54 million in the scheme, which the Miami Herald reports involved Singh borrowing “hundreds of millions from the mostly working-class investors with promises of paying them double-digit returns and ownership of the trucks in his company.” The investors he targeted were mostly of Haitian descent living in South Florida.
investors allege Wells Fargo “facilitated the misconduct by knowingly aiding and abetting the flow and misappropriation of stolen investor money through its accounts,” and are seeking redress from the bank through the lawsuit.
It is alleged that Wells Fargo “observed and facilitated the flow of millions of ill-gotten dollars (and thousands of personal checks and wire transfers) through [its] coffers, playing a principal role in the continuation of the Ponzi scheme that destroyed the lives of each investor.”
Singh was sentenced to 23 years in prison in June after being convicted in the case.
It was reported that he began soliciting investments for his company as early as August 2019.
“RBL promised between 12.5% to 325% ‘guaranteed’ returns as part of RBL’s trucking and logistics company, which was headquartered in Coral Springs, Florida,” the suit states. “Initially, RBL did not operate as a Ponzi scheme — however, as RBL began to operate at a loss on or about August 2019, RBL began aggressively soliciting over $70 million of investments from new investors in order to pay its debts and fund the lavish lifestyle” of Singh, the suit continues.
The investors claim that RBL misappropriated nearly $20 million of investors’ contributions into Singh’s brokerage accounts, which focused on highly speculative equities trading on margin.
From approximately August 2019 through February 2023, the lawsuit states that “RBL operated numerous bank accounts in which RBL had investors’ wire transfers and checks deposited in order to facilitate the Ponzi scheme, including Wells Fargo bank accounts ending in ‘5094’ and ‘5065,’” which both belonged to RBL, Singh or a combination of the two.
“Both were critical facilitation tools for the Ponzi scheme,” according to the suit, which further states, “Wells Fargo oversaw the extraction of millions of dollars from Plaintiffs through these accounts for more than four years — facilitating massive inflows and outflows of money, at times more than $18 million dollars in a single month.”
Under the Bank Secrecy Act and Anti-Money Laundering Act, “Wells Fargo was required to and had thousands of opportunities to adequately review the 5094 Account, the 5065 Account, and the legitimacy of RBL and its investment offerings,” the suit contends.
“Amongst other things, Wells Fargo knew a massive number of high-value wires consisting of investor funds were pouring into the 5094 Account and observed and facilitated the misappropriation of those funds to Singh’s and RBL’s accounts, amongst other destinations, acquiring knowledge of the misappropriation and misuse of investor funds as part of the Ponzi scheme,” according to the suit.
Wells Fargo did not respond to a request for comment.
The securities law attorneys at Hyman Cotter PC are uniquely qualified to represent individual investors in investment-related claims against financial professionals and their firms. We understand the financial and emotional ramifications of investment losses caused by financial professionals. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact us at 312-291-4600 or through our online contact form for a free consultation.
