Tom Petters's Ponzi victims sue defunct Wisconsin bank for $1 billion

Categories: Tom Petters
An investment group that was bilked out of more than $1 billion by Petters now wants a bank to reimburse their losses.
A Florida investment group that was bilked out of more than $1 billion by Tom Petters is suing to get that money back.

Palm Beach Finance Partners is suing BMO Harris, the bank company that bought now-defunct Wisconsin financial services company M&I for $1 billion. BMO Harris filed a motion to dismiss the case, with oral arguments on the hearing scheduled for April 20.

According to the lawsuit, from 2003 through August 2008, Petters deposited over $35 billion in an M&I account. "You would think M&I would have looked deeper," the suit says.

The Milwaukee Journal-Sentinel notes that suits where fraud victims sue banks over Ponzi scheme losses usually fail, but this one has a twist: In 2008, M&I signed an agreement to protect Finance Partners' funds after concerns were raised about Petters's operation.

Ann Gittleman, an attorney assisting Palm Beach Finance Partners, said, "M&I owed a duty to Palm Beach funds. They signed the agreement and put it to the side and never did anything." But BMO Harris argues in court documents that the suit should be dismissed because the bank was merely the conduit for the money and has no liability for the losses caused by Petters's scheme.

Petters, 54, is currently serving 50 years in prison for orchestrating the $3.7 billion Minneapolis-based Ponzi scheme.

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