Chase Bank aided Ponzi scheme with real estate developer, lawsuit claims

Chase Bank lawsuit overview:

• Who: A court-appointed receiver for SiliconSage Builders Inc. filed a lawsuit against JPMorgan Chase Bank NA.
• Why: The lawsuit alleges that Chase Bank employees enabled a Ponzi scheme targeted at retail investors.
• Where: The Chase Bank Ponzi scheme lawsuit was filed in California federal court.

A new Chase Bank lawsuit alleges the bank enabled a Ponzi scheme orchestrated by a real estate developer, duping nearly 250 retail investors with false promises of investment returns.

Plaintiff David Stapleton, a court-appointed receiver for SiliconSage Builders Inc., claims Chase enabled a fraudulent scheme concocted by Sanjeev Acharya. 

“Since August 2016, Acharya raised over $119 million from over 250 investors for a real estate development business, which he operated through the Receivership Entities using dozens of accounts at Chase Bank,” the Chase Bank lawsuit alleges.

Chase Bank Ponzi scheme enabled by bank’s employees, plaintiff says

Acharya allegedly financed the real estate projects by offering equity interests to investors, selling promissory notes and membership interests, while claiming that all his projects had been profitable for investors.

“In reality, since at least August 2016, all but one of the Receivership Entities’ nine projects failed to return a profit, including five that were simply abandoned,” the Chase Bank lawsuit states.

Acharya’s Receivership Entities reportedly held a total of 77 Chase Bank accounts and conducted more than 130,000 transactions through Chase Bank, Stapleton alleges. Acharya’s personal bank account at Chase Bank allegedly received large transfers from the Receivership Entities.

Chase Bank accounts were the “exclusive vehicle to misappropriate the Receivership Entities’ funds,” Stapleton asserts.

Chase Bank employees were intimately and actively” involved with the bank accounts and maintained regular contact with Acharya. Employees allegedly circumvented its normal fraud prevention procedures to accommodate unusual transactions involving the accounts.

The alleged Chase Bank Ponzi scheme allegedly continued until the U.S. Securities and Exchange Commission filed a lawsuit against Acharya in 2020, securing a temporary restraining order and leading to Stapleton’s appointment as receiver.

The SEC claimed Silicon Sage had approximately $18 million in undisclosed liabilities.

Acharya reportedly settled the SEC’s lawsuit in 2021.

Another recent Chase Bank lawsuit alleges the bank violated labor laws by failing to provide employees with required meal and rest breaks.

What do you think about the alleged Chase Bank Ponzi scheme? Join the discussion in the comments.

Stapleton is represented by Michael J. Reiser, Matthew Reiser and Isabella Martinez of Reiser Law PC and Jeffrey C. Schneider, Victoria J. Wilson and Marcelo Diaz-Cortes of Levine Kellogg Lehman Schnieder + Grossman LLP.

The Chase Bank Ponzi scheme lawsuit is David Stapleton v. JPMorgan Chase Bank NA, Case No. 5:24-cv-04947-NC, in the U.S. District Court for the Northern District of California.

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