SAN FRANCISCO (CN) – A federal class action claims Citicorp aided and abetted a $20 million Ponzi scheme run by a “felon and escaped prisoner, Joseph Viola.” The class claims that Citicorp “knew of Viola’s prior criminal history, and of his fraud,” but provided him “with a variety of banking services in violation of federal banking rules and regulations and directly assisted Viola in recruiting victims for his scheme.”
The class claims that “Viola is a convicted felon who, before his latest white collar crime spree in San Francisco, served a 5-year sentence for fraud in the 1980s. Viola was indicted in 1990 by the Maricopa County Grand Jury, charged with perpetrating an investment fraud scheme. While awaiting trial, out on bail, Viola fled the State of Arizona to San Francisco, California. He was arrested on or about March 10, 2010, in San Francisco and extradited to Maricopa County, Arizona, where he remains incarcerated.”
Federal prosecutors charged Viola criminally on Aug. 3, claiming his “illegal financial investment scheme … defrauded dozens of investors of approximately $7 million,” according to the complaint. “Plaintiffs are informed and believe that the actual amount of investor loss is in excess of $20 million.”
Viola’s latest scheme was to claim to be the “‘Administrator’ of an entity known as ‘Amicus Curiae Legal Dispute Resolution,'” the complaint states. He used accounts at Citicorp to move the money, and provided his victims with bogus bank statements, the class claims.
The class claims the Citigroup defendants knew of Viola’s previous fraud conviction, that it terminated its relationship with him after he was convicted, but it let him set up new accounts and conduct business anyway, “under the false name ‘Giuseppe’ Viola.” They also claim the defendants failed to monitor an account Viola set up with a man named Napolitano, who is now dead, and failed to follow federal banking laws in doing so.
They seek restitution and punitive damages. Their lead counsel is Derek Howard with Minami Tamaki.