Banking giant JPMorgan Chase is accused of knowingly enabling an alleged Ponzi scheme targeting retail investors.
Plaintiff David Stapleton alleges the bank boosted an obvious fraudulent scheme orchestrated by Sanjeev Acharya, the CEO of Silicon Sage Builders, which resulted in significant financial losses for investors.
Stapleton says Acharya raised more than $119 million from 250 investors for real estate projects that were largely unprofitable, allegedly using Ponzi-like tactics to pay early investors with funds from new investors.
“Indeed, Chase Bank hosted all the accounts and executed the deceptive transactions that allowed Acharya to run the fraudulent scheme and dissipate the Receivership Entities’ funds. The Receivership Entities held a combined 77 bank accounts at Chase Bank and conducted more than 130,000 banking transactions through Chase Bank…
Chase Bank knew of and substantially assisted Acharya’s scheme. From a bank’s perspective, the fraudulent scheme was obvious. A fraudulent scheme of this magnitude cannot be run surreptitiously through one bank. And here, it did not.”
Stapleton claims a Chase business relationship manager was aware of the fraudulent scheme, actively assisting in managing the accounts and bypassing internal safeguards such as fraud prevention protocols.
The lawsuit requests compensation for damages caused by the fraudulent scheme and the bank’s alleged role in enabling it, seeking punitive damages, attorneys’ fees and other remedies.
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