Bank ordered to pay $564M to victims of Minnesota businessman fraud scheme
MINNEAPOLIS (AP) — A federal jury has awarded a record $564 million in damages to victims of a massive Ponzi scheme by Minnesota businessman Tom Petters.
The verdict handed down Tuesday against BMO Harris Bank is believed to be the largest financial penalty handed out by a jury in a Minnesota courtroom, according to attorneys who represented bankruptcy trustees. It’s also the largest single verdict or settlement connected to the multi-billion dollar Petters fraud.
BMO said it will appeal the verdict and penalty.
Petters, of Wayzata, was sentenced to 50 years in prison in 2010 for defrauding investors out of $1.9 billion. Receiver Doug Kelley and his team has spent more than a decade searching for and liquidating Petters’ assets to compensate as many victims and creditors as possible.
Petters executed the scheme using accounts at M&I Bank, which was acquired in 2011 by BMO Harris Bank. The jury found that BMO aided and abetted in the scheme. Kelley said BMO failed to file a suspicious activity report with the federal government and believed the bank could have stopped the scheme if it had taken such action.
Kelley has brought more than 300 lawsuits in the case. More than $737 million has been recovered and returned to victims and creditors so far.