Class Claims Ponzi Targeted Old-Timers

SAN DIEGO (CN) - Millennium Trust Co. helped "fraud promoters" steal millions of dollars from elderly people in an IRA-based Ponzi scheme, an elderly man claims in a federal class action.

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Lead plaintiff Stanley Levine, 85, claims he lost his entire $225,000 investment, and that the class lost at least $5 million in the scheme, which was based on self-directed investment retirement accounts, or SDIRAs.

A similar class action was filed 6 weeks ago against Entrust Group and five of its affiliates.

Levin claims: "The fraud promoters invested the money deposited by plaintiff and the class members in their SDIRAs in 'investments' that were fraudulent, illusory or non-existent. Millennium Trust aided and abetted the fraud by periodically sending out investment account statements showing extraordinary investment returns in the SDIRAs when in fact the fraud promoters were absconding or had already absconded with the victims' money."

Millennium Trust is an Illinois-based company with offices in Carlsbad, in North San Diego County. It "touts itself as having over 170,000 accounts with total assets under custody exceeding $4.6 billion as of December 31, 2011," according to the complaint.

Millennium is a defendant in two other pending Ponzi class actions in Illinois, the complaint states.

Levine claims: "Millennium Trust gave plaintiff and the class members a false sense of security by making false and deceptive representations that their 'investments' would be safe, insured, accurately administered, and legally sound. Plaintiff and the class members, relying on those representations, tendered their hard-earned money to Millennium Trust, while Millennium Trust enabled the fraud promoters to steal the monies invested by plaintiff and the class members. Many investors lost their entire life savings."

Levine seeks compensatory and punitive damages and statutory penalties for fraud, conspiracy, and financial elder abuse, and a court order freezing Millennium Trust's assets.

Lead counsel is David Dorenfeld with Snyder & Dorenfeld, of Walnut Creek.

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