Florida Lawsuit Claims TD Bank Was ‘Epicenter’ in Alleged Ponzi Scheme

TD Bank was hit with a multimillion-dollar lawsuit Friday calling it the “financial epicenter” of an alleged Ponzi scheme run by disgraced Florida lawyer Scott Rothstein.

The unit of Canada’s Toronto-Dominion Bank was a “linchpin” in the scheme and disregarded numerous “red flags” as hundreds of millions of dollars moved out of trust accounts opened by Rothsteins’s Fort Lauderdale-based law firm, the lawsuit filed in Broward County Circuit Court said.

“TD Bank was the financial epicenter of the Ponzi scheme,” the complaint added.

“Among other things, TD Bank conspired, induced, and facilitated the principal conspirators’ deceptive practices, allowing principal conspirators to divert hundreds of millions of investor dollars through TD Bank accounts.”

The lawsuit names TD Bank and three of its South Florida based employees as defendants, along with Rothstein and several other individuals

It was filed on behalf of investors who claim they lost more than $100 million though Rothstein’s scheme, which involved the sale of legal settlements that he claimed his firm had negotiated in lucrative employment discrimination cases, some purportedly involving whistle-blower claims.

The bank, a subsidiary of Canada’s second-largest, has denied any wrongdoing.

Criminal charges have not yet been filed against Rothstein, who had his Florida law license revoked by the state bar association on Friday.

But in a civil complaint filed against him earlier this month, amid the seizure of many of his assets, authorities said Rothstein sold some settlements that never existed. The FBI said his scheme may have bilked investors out of as much as $1 billion.

Rothstein’s attorney has declined to comment on his client’s alleged Ponzi scheme, which unraveled on Nov. 2 when he was sued by Rothstein, Rosenfeld Adler PA, the now defunct law firm that he co-founded and where he served as high-flying chief executive until earlier this month.

(Reporting by Tom Brown; Editing by Gary Hill)

Topics Lawsuits Florida Claims