Zions Bank Class Action Lawsuit Alleges Ponzi Scheme

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A group of Zions Bank customers have lodged a class action lawsuit against the financial institution alleging that it used their money to fund a massive Ponzi scheme.

The lead plaintiffs include dozens of bank members, as well as their families, who say that they were victims of a scam perpetrated by Gaylen Rust, the owner of a rare coin business, as well as bank employees.

The plaintiffs say they were induced by Rust and bank employees to buy into a silver trading pool that purportedly sold silver as market prices rose, then purchased it when it fell.

According to the Zions Bank class action lawsuit, Rust ran a company called Rust Rare Coin Inc. The plaintiffs allege that they were told by Rust and Zions Bank employees that he maintained the physical silver purchased by the silver trading pool.

“To solicit investors, Rust touted his supposed successful track record in buying and trading silver, luring investors with the promise of double-digit returns averaging 20 to 25% per year on their investment in the Silver Pool,” alleges the Zions Bank class action.

The silver trading pool was a sham, however, and no physical silver was being held by Rust as promised.

The plaintiffs say that their money was simply held in a Zions Bank account to be used by Rust as he pleased.

“Rust diverted investor money to himself and to his family, to other flailing companies Rust or his family members controlled, and used new investor money to make payments to earlier investors seeking to liquidate all or part of their interests in the Silver Pool,” claims the Zions Bank class action lawsuit.

The Zions Bank class action alleges that the returns provided to the plaintiffs and other Class Members were fake. Further, Zions Bank employees allegedly knew of the fraud.

“Rust could not have perpetrated the Silver Pool scam on his own,” argues the Zions Bank Ponzi scheme class action lawsuit. “Instead, he crucially depended on the knowing participation of his bank, Zions Bank, through which Rust committed his fraud.”

According to the plaintiffs, the “epicenter” of the alleged Ponzi scheme was an account at Zions Banks known to employees as the “Silver Pool Investment Account.”

The Zions Bank fraud class action lawsuit alleges that the Ponzi scheme started to fall apart on Nov. 13, 2018.

At that point, financial regulatory authorities filed legal action against Rust and his family alleging fraud and violations of the Commodities and Exchange Act among other federal laws.

Just two days later the Securities and Exchange Commission hit the Rust family with allegations of running a fraudulent silver trading program.

“Plaintiffs and the putative class members were victims of Rust’s Silver Pool investment scheme. They invested their personal money in what they believed to be the Silver Pool, and were damaged,” alleges the Zions Bank scam class action lawsuit.

The Zions Bank class action lawsuit seeks to represent other Zions Bank customers who were duped by the alleged Ponzi scheme – the silver trading pool run by Gaylen Rust.

They are seeking damages, along with interest to be paid by Zions Bank for the part its employees played in the scheme.

The plaintiffs are represented by Samuel Adams of Adams Davis PC, Alan L. Rosca, Mark Goldman and Paul Scarlato of Goldman Scarlato & Penny PC, and J. Barton Goplerud and Brian O. Marty of Shindler Anderson Goplerud & Weese PC.

The Zions Bank Ponzi Scheme Class Action Lawsuit is Springer, et al. v. Zions Bancorporation, Case No. 2:19-cv-00035-BCW, in the U.S. District Court for the District of Utah.