TAMPA (CN) – Bank of America aided and abetted a $37 million Ponzi scheme disguised as an “investment club” called Diamond Ventures, a class action claims in Federal Court. The class claims the bank knew or should have known that 27-year-old Beau Diamond was running a scam.
The class claims that if BofA followed its own policies of discovery, monitoring, tracking and evaluating of financial activities it would have discovered the scam.
Diamond allegedly stuffed his BofA bank account more than $37 million from April 2006 through December 2008. Diamond holds no securities or commodities license, had no management team or employees and no legitimate business model, his banking activities reflect no investment business or business-generated revenue, only payouts to clients made from new clients’ deposits – a classic Ponzi scheme, according to the complaint. Many of the investors lost their life’s savings.
They say BofA 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.
BofA’s “Premier Bankers” authorized wire transfers of more than $700,000 to Diamond’s personal account, according to the complaint, including charges at the MGM Grand Hotel and the Wynn Las Vegas.
Diamond allegedly sent a string of deceptive emails to investors in December 2008, blaming payment delays on banking errors, then said he had changed banks, then that the checks were in the mail. Then, according to the complaint, he used his victims’ money to go to Costa Rica, then announced that all of their money had been lost due to the economic crisis.
The class wants their money back. They say BofA aided and abetted fraud, conversion, and breach of fiduciary duty. Their lead counsel is Andre Perron with Ozark, Perron & Nelson of Bradenton, Fla.