Wells Fargo Class Action Alleges $449M Ponzi Scheme

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Wells Fargo Ponzi Scheme Class Action Lawsuit Overview: 

• Who: PMM3 LLC, Philomena Moloney and Travis Goldrup filed a class action lawsuit against Wells Fargo Bank. 
• Why: The group of investors claim Wells Fargo aided and abetted a $449 million Ponzi scheme perpetrated by attorney Matthew Wade Beasley. 
• Where: The class action lawsuit was filed in Nevada federal court.

Wells Fargo aided and abetted a $449 million Ponzi scheme that stemmed from the misuse of funds in an Interest on Lawyers’ Trust Account (IOLTA), a new class action lawsuit alleges. 

Plaintiffs PMM3 LLC, Philomena Moloney and Travis Goldrup claim Wells Fargo should have known from banking records that the IOLTA account of attorney Matthew Wade Beasley was being used for fraudulent means. 

“Wells Fargo is sued as a knowing aidor and abettor that substantially assisted the breach of fiduciary duties arising out of the existence of the IOLTA account used as a vehicle for the ploy,” the Wells Fargo class action states. 

PMM3 LLC, Moloney and Goldrup claim they gave money to Beasley’s associates under the guise it would go toward short-term loans for injured individuals waiting for other money to be paid out. They want to represent a class of around 200 investors who they lost more than a combined $100 million on account of the alleged Ponzi scheme perpetrated by Beasley. 

Wells Fargo Should Have Known IOLTA Account Was Fraudulent, Class Action Says

Beasley and his associates targeted the alleged Ponzi scheme toward their own friends, individuals in the construction industry and Mormon church members, the Wells Fargo class action alleges. 

PMM3 LLC, Moloney and Goldrup also cite the testimony of a U.S. Securities and Exchange Commission (SEC) accountant from a related complaint, who said almost $500 million was deposited into the IOLTA account of Beasley from January 2015 and March 2022. 

Wells Fargo, the investors argue, should have known that Beasley could not have legitimately deposited that much money into his account since they say he had told the bank when he first opened the account that his gross annual sales were under $350,000.

Beasley allegedly confessed to his role in the Ponzi scheme while bleeding from a gunshot wound he suffered after brandishing a gun at FBI agents as they executed a search warrant of his home, according to a related action by the SEC, Law360 reports. 

In related news, a report from Bloomberg last month found Wells Fargo refused to refinance the mortgages of more than half of all Black homeowners who applied in 2020. 

Have you been the victim of a Ponzi scheme perpetrated by a financial advisor? Let us know in the comments! 

The plaintiffs are represented by Brad M. Johnston of Simons Hall Johnston PC and Maria F. Elosu and Robert L. Brace of the Law Offices of Robert L. Brace.

The Class Action Lawsuit is PMM3, LLC, et al. v. Wells Fargo Bank, N.A., Case No. 2:22-cv-00654, in the U.S. District Court for the District of Nevada.

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