Wells Fargo class action alleges bank participated in $300M Ponzi scheme

Wells Fargo class action lawsuit overview:

• Who: Plaintiff Fanny B. Millstein filed a class action lawsuit against Wells Fargo Bank NA.
• Why: Milstein claims Wells Fargo aided and abetted a Ponzi scheme that caused many elderly investors to lose significant amounts of their life savings.
• Where: The Wells Fargo Ponzi scheme class action lawsuit was filed in Florida federal court.

A Wells Fargo class action lawsuit alleges the bank aided and abetted a Ponzi scheme resulting in investor losses of more than $300 million.

Plaintiff Fanny B. Millstein says Wells Fargo knew about a scheme perpetrated by Marshal Seeman, Eric Holtz and Brian Schwartz through a number of entities including National Senior Insurance Inc. d/b/a Seeman Holtz (NSI), the Para Longevity Companies (PLCs) and the Centurion Companies.

Each of these companies used Wells Fargo as their primary bank, the Wells Fargo class action lawsuit asserts.

The Wells Fargo Ponzi scheme allegedly consisted of NSI and its agents selling promissory notes offered by the PLCs and secured by collateral through life insurance policies issued to third parties, known as “Stranger-Originated Life Insurance” and “life settlements.”

Investors were allegedly promised the proceeds from the death benefits would fund interest payments and would eventually return the investors’ principal, Millstein explains.

However, the Ponzi scheme perpetrators allegedly used newly invested funds to pay existing investors “and further looted significant sums through improper, exorbitant or fictitious fees and expenses,” the Wells Fargo class action lawsuit says.

Wells Fargo class action says bank knew about scheme for a decade

Millstein says Wells Fargo knew about the alleged Ponzi scheme from 2011 through 2021 yet failed to stop the fraud. Instead, Wells Fargo “chose to substantially assist and profit from it.”

The Wells Fargo Ponzi scheme was reportedly discovered by the Florida Office of Financial Regulations in 2021. A forensic review of relevant books and records showed Wells Fargo knew about and assisted the scheme’s perpetrators.

“Wells Fargo, as the primary depository bank used in the scheme, as well as in its roles as trustee and securities intermediary, effectuated the transactions that enabled the scheme to reach catastrophic levels,” the complaint alleges.

Many victims of the alleged scheme were elderly and they lost a significant amount of their life savings, according to the Wells Fargo class action lawsuit. Millstein says Wells Fargo is liable for all outstanding monies due to the victims for their respective notes.

The Wells Fargo class action lawsuit asserts claims for aiding and abetting breach of fiduciary duties, aiding and abetting fraud and unjust enrichment.

Another recent Wells Fargo class action lawsuit says the bank’s loan application process discriminates against racial minorities.

What do you think about the Wells Fargo Ponzi scheme allegations? Join the discussion in the comments.

Millstein is represented by Seth Miles, David M. Buckner and Brett E. von Borke of Buckner + Miles, Scott L. Silver, Ryan A. Schwamm and Peter M. Spett of Silver Law Group and James D. Sallah and Joshua A. Katz of Sallah Astarita & Cox LLC.

The Wells Fargo Ponzi scheme class action lawsuit is Fanny B. Millstein v. Wells Fargo Bank NA, Case No. 1:24-cv-22142, in the U.S. District Court for the Southern District of Florida, Miami Division.

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