Banking giant JPMorgan Chase is accused of knowingly facilitating an alleged Ponzi scheme targeting retail investors.
Plaintiff David Stapleton alleges that the bank furthered an apparent fraudulent scheme orchestrated by Sanjeev Acharya, the CEO of Silicon Sage Builders, which resulted in significant financial losses to investors.
Stapleton says Acharya raised more than $119 million from 250 investors for real estate projects that were largely unprofitable, allegedly using Ponzi-like tactics to pay early investors with money from new investors.
“Indeed, Chase Bank hosted all the accounts and executed the deceptive transactions that allowed Acharya to carry out the fraudulent scheme and squander the trustees’ funds. The trustees had a total of 77 bank accounts at Chase Bank and conducted more than 130,000 banking transactions through Chase Bank…
Chase Bank was aware of Acharya’s plan and significantly supported it. From a bank’s perspective, the fraudulent scheme was clear. A fraudulent scheme of this magnitude cannot be carried out secretly through one bank. And that didn’t happen here.”
Stapleton alleges that a Chase business associate manager knew about the fraudulent scheme, actively helped manage the accounts and circumvented internal safeguards such as fraud prevention protocols.
The lawsuit seeks compensation for damages caused by the fraudulent scheme and the bank’s alleged role in enabling it, seeking punitive damages, attorneys’ fees and other remedies.
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