Jan 19 (Thomson Reuters Accelus) - TD Bank, the U.S.
arm of Canada's Toronto-Dominion Bank, must pay a Texas
investment company $67 million for helping disgraced South
Florida lawyer Scott Rothstein run a $1.2 billion Ponzi scheme,
a Miami jury ruled.
The verdict, returned on Wednesday by a jury in U.S.
District Court in Miami, will benefit Corpus Christi-based
Coquina Investments, which filed its lawsuit in May 2010 and
said it was an unwitting investor in the Rothstein scheme. The
complaint filed by Coquina stated that "senior TD Bank officers
played an active role in the scheme and facilitated its
continued existence."
The complaint further alleged that the bank had misled
investors by telling them that funds were "'irrevocably'
'locked' in specially designated accounts", whereas those funds
were in fact used by the defendants to launder hundreds of
millions of dollars.
The jury awarded $32 million in compensatory damages and $35
million in punitive damages.
This verdict does not end TD Bank's legal woes resulting
from the Rothstein scheme. The bank still faces several other
lawsuits brought by groups of investors.
TD Bank is disappointed with the jury's decision and is
considering all of its options, spokeswoman Rebecca Acevedo said
in an email to Thomson Reuters.
"We still maintain that we were Rothstein Rosenfeldt Adler's
bank, and that it was Scott Rothstein who defrauded investors.
We will continue to defend the bank against claims of wrong
doing," she said.
STRUCTURED SETTLEMENTS
Rothstein pleaded guilty to racketeering, money laundering
and fraud conspiracy charges in January 2010, admitting he
committed these crimes as part of a $1.2 billion Ponzi scheme
that operated between 2005 and 2009.
The scheme, which involved victims "investing" in fictitious
structured settlements, was run through the Fort Lauderdale law
firm Rothstein, Rosenfeldt and Adler PA (RRA). The funds were
diverted and stolen by Rothstein and his accomplices.
Rothstein and RRA relied on 38 TD Bank accounts and four
Gibraltar Bank accounts during the course of the Ponzi scheme,
according to documents filed in the criminal case against
Rothstein.
Rothstein's plea agreement mentioned these transactions when
justifying his money laundering conspiracy conviction.
"The proceeds derived from the Ponzi scheme were laundered
through the accounts maintained at several financial
institutions in order to promote, carry on and conceal the
criminal activities of RRA," Rothstein's plea agreement stated.
Rothstein was sentenced to 50 years in prison. Seven of his
employees and associates have been criminally charged, five of
who have pleaded guilty.
The case is Coquina Investments v. Rothstein, 0:10-cv-60786,
in the Southern District of Florida.
For Coquina Investments: Camellia Noriega of Mandel &
Mandel.
For Rothstein: Danielle Garno of Greenberg Traurig.
(Reporting by Brett Wolf)
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