[ad_1]
Banking Regulation
Wells Fargo’s ‘willful blindness’ enabled former lawyer’s fraud, victims’ swimsuit alleges
A former San Antonio lawyer was in a position to steal tens of millions of {dollars} from his purchasers due to Wells Fargo’s “avarice and greed” and “intentional disregard of banking rules.” (Picture from Shutterstock)
Up to date: A former San Antonio lawyer was in a position to steal tens of millions of {dollars} from his purchasers due to Wells Fargo’s “avarice and greed” and “intentional disregard of banking rules,” in accordance with a lawsuit filed Monday.
Wells Fargo Financial institution allowed now-convicted lawyer Christopher John Pettit of San Antonio, who was recognized as a excessive net-worth buyer, to open a New Mexico lawyer’s belief account, though he was not licensed within the state, in accordance with a victims’ swimsuit filed in federal courtroom within the Western District of Texas.
After the New Mexico account remained dormant for 4 years, Wells Fargo went on to just accept tens of tens of millions of {dollars} of deposits beginning in April 2021. The funds have been then commingled and dissipated, the swimsuit says, as cash was withdrawn in money, transferred to Pettit’s private accounts, used to pay Pettit’s mortgage held with Wells Fargo, transferred to a different financial institution, and despatched to a PayPal account repeatedly used to purchase video video games.
Wells Fargo disregarded its insurance policies, federal banking rules and New Mexico regulation regulating belief accounts, in accordance with allegations within the swimsuit. The financial institution’s conduct “seen in the perfect mild constitutes grossly negligent willful blindness,” the swimsuit says.
Wells Fargo regarded the opposite means, the swimsuit says, “as a result of Pettit confirmed nice potential for operating tens of millions, if not billions of {dollars} by way of the accounts he managed at Wells Fargo.”
Law360 coated the swimsuit.
Pettit was sentenced to 50 years in jail in February for participating in a “Ponzi-type scheme” that resulted in an estimated loss to his victims of between $20 million and $65 million.
Pettit obtained cash from purchasers that he promised to make use of for belief accounts, bond investments and like-kind property exchanges. He then used the cash to pay consumer debt and to help his “extravagant life-style,” prosecutors said.
Pettit gave up his regulation license in 2022 and filed for chapter the identical 12 months.
The plaintiffs within the Wells Fargo swimsuit are 4 folks and a dwelling belief who say their whole loss was greater than $5.2 million. In a footnote, the swimsuit says Pettit opened greater than 150 financial institution accounts throughout the nation, however “this story includes solely these accounts positioned at Wells Fargo.”
The swimsuit alleges understanding participation in breach of fiduciary obligation, understanding participation within the perpetration of fraud, negligence and gross negligence, and violation of the Texas Theft Legal responsibility Act.
Wells Fargo gave this assertion to the ABA Journal: “It’s unlucky that Mr. Pettit engaged in fraudulent conduct, however Wells Fargo will not be answerable for his actions and intends to defend towards this litigation.”
The swimsuit is Verstuyft v. Wells Fargo Financial institution.
Up to date March 7 at 11:25 a.m. so as to add the assertion by Wells Fargo.
[ad_2]
Source link
