PNC wants out of TelexFree Ponzi scheme lawsuit

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Update: 

• PNC Bank continues to fight against being named as a defendant in a multidistrict suit over a $3 billion dollar TelexFree Ponzi scheme, saying there is no evidence it knew about the fraud.
• PNC opened accounts for TelexFree, a Massachusetts company that sold fake securities and stole billions from about 2 million victims worldwide. 
• Plaintiffs in the TelexFree lawsuit asked U.S. District Judge Timothy S. Hillman to reconsider his decision to remove PNC from the case in August. 
• Financial institutions Bank of America, Wells Fargo and TD Bank face claims of aiding and abetting the TelexFree Ponzi scheme, with Judge Hillman ruling that there was sufficient evidence the banks continued to process accounts for TelexFree after they were shown evidence of the fraud.
• However, Judge Hillman said he had not seen similar evidence suggesting PNC knew of the scheme.

TelexFree ponzi scheme class action lawsuit overview: 

• Who: Bank of America, Wells Fargo, and TD Bank have been accused of aiding and abetting the TelexFree ponzi scheme which cost consumers around the world a total of $3 billion. 
• Why: Plaintiffs claim the financial institutions continued servicing TelexFree accounts despite allegedly knowing that the company was operating illegally. 
• Where: The TelexFree ponzi scheme victimized consumers around the world. 

(Sept 06, 2022)

Bank of America, Wells Fargo and TD Bank have been accused of aiding and abetting the multibillion dollar TelexFree ponzi scheme. 

The TelexFree ponzi scheme was disguised as an internet phone service company and affected more than 1 million consumers from a number of countries around the world, reports CNBC. 

Bank of America, Wells Fargo, and TD Bank, meanwhile, have been accused of continuing to service TelexFree accounts despite allegedly knowing the company was operating illegally, reports Law360. 

All three financial institutions attempted to get the claims against them dismissed, however, a Massachusetts federal judge ruled against the trio in an order last week. 

The judge overseeing the multidistrict litigation determined in his order that the plaintiffs in the complaint had sufficiently pleaded their claims against Bank of America, Wells Fargo and TD Bank.

Judge rejects motions to dismiss from TD Bank, Wells Fargo, Bank of America

TD Bank had unsuccessfully argued that the complaint against it failed to show that it had any actual knowledge that fraud was occuring, while Wells Fargo argued the claims did not adequately plead that an underlying fraud had taken place. 

“This is not a case where, despite certain suspicious activity, a bank failed to detect an underlying fraud,” the judge wrote. 

Bank of America, meanwhile, had attempted to argue that the complaint failed to “properly plead substantial assistance.” 

While the judge agreed that a routine banking service “typically does not constitute substantial assistance,” he ultimately determined that “when a bank has actual knowledge that its routine services are assisting a customer in committing a specific tort, the provision of those services may constitute substantial assistance.” 

The TelexFree ponzi scheme victimized individuals from between late 2012 to April 2014, with consumers tricked into purchasing fake securities for the company’s flimsy Voice over Internet Protocol service. 

Consumers—including around 170,000 Americans—suffered a total of $3 billion in losses from the TelexFree ponzi scheme, reports Law360. 

In June, Bank of America agreed to pay $8 million to resolve claims it violated its account agreements with its customers by charging them multiple fees on the same checks. 

Were you victimized by the TelexFree ponzi scheme? Let us know in the comments! 

The TelexFree ponzi scheme class action lawsuit is In re: TelexFree Securities Litigation, Case No. 4:14-md-02566, in the U.S. District Court for the District of Massachusetts. 

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