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PNC Bank Ponzi Scheme Class Action Lawsuit Overview:
- Who: A judge has dismissed a class action lawsuit lobbied by investors against PNC Bank and limited claims against Heartland Bank.
- Why: The judge sided with PNC Bank against investors claims it aided and abetted an alleged Ponzi scheme perpetrated by Kenneth Courtright and Today’s Growth Consultant Inc.
- Where: The class action lawsuit was filed in Illinois federal court.
A federal judge in Illinois has permanently dismissed a class action lawsuit brought against PNC Bank by investors who claim it was part of a $75 million Ponzi scheme.
The judge also limited some of the claims made against Heartland Bank, which has also been accused of aiding and abetting in a scheme which allegedly cost more than 500 investors millions of dollars.
The victory for PNC was its second-such in the case, with the judge previously tossing out the claims made against the bank in an original complaint.
Investors were unable to fix the issues in their amended complaint, the judge determined, ultimately deciding to dismiss them with prejudice.
The amended complaint included new allegations of proof that PNC knowingly allowed Today’s Growth Consultant Inc. (TGC) and its owner Kenneth Courtright to allegedly misappropriate investors’ funds.
Courtright is currently facing ongoing criminal charges related to the alleged Ponzi scheme. He is not a defendant in the class action complaint, however.
Investors used receipts of subpoenas from the Securities and Exchange Commission made by PNC as alleged proof it had first-hand knowledge that fraud was occurring.
The judge disagreed, however, arguing that “what PNC could have known if it had requested that formal order of investigation does not matter for purposes of alleging actual knowledge,” according to the order.
The judge also agreed with PNC’s argument that the receipts did not show their knowledge of fraud, only that it was intending to look into the matter.
“Plaintiffs rely on the same allegations of PNC’s knowledge to alternatively argue that PNC acted in bad faith,” the judge wrote. “As with actual knowledge, these allegations do not provide a basis for inferring that PNC acted in bad faith.”
Heartland, meanwhile, had claims by investors that it had knowledge that the fraud was upheld, with the judge determining they had sufficiently shown Courtright and TGC had admitted to the bank what it was doing with investors’ incoming funds.
Claims that Heartland violated the Freedom of Information Act were trimmed, however, with the judge ruling they had no standing since the bank had never personally held the investor’s funds.
A separate class action lawsuit was filed against PNC in October over claims the bank overcharged homeowners with mortgage deferral agreements during the pandemic.
Did you lose money due to the Ponzi scheme allegedly perpetrated by TGC and Kenneth Courtright? Let us know in the comments!
The plaintiffs are represented by Barbara A. Podell and Michael Dell’Angelo of Berger Montague PC, Paul Scarlato and Alan Rosca of Goldman Scarlato & Penny PC, and John S. Burke of John Sheridan Burke Law LLC.
The PNC Bank Ponzi Scheme Class Action Lawsuit is PLB Investments LLC, et al. v. Heartland Bank & Trust Co., et al., Case No. 1:20-cv-01023, in the U.S. District Court for the Northern District of Illinois.
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