Zayed v. Associated Bank, N.A., No. 13-3388 (8th Cir. 2015)
Annotate this CaseFor about three years ending in 2009, five schemers bilked unsuspecting investors of an estimated $190 million in a Minnesota Ponzi scheme. They took more than $79 million of the investors’ funds with the help of Associated Bank. After the scheme was exposed, the district judge in a related case appointed a receiver to take custody of funds owned by the schemers’ estates and by organizations under their control (receiver entities). The receiver filed suit on behalf of the receiver entities, alleging Associated Bank aided and abetted the scheme. The district court granted Associated Bank’s motion to dismiss. The Eighth Circuit reversed and remanded, stating that, while it could not predict whether a jury will find Associated Bank either had actual knowledge of or substantially assisted in the asserted torts, the facts alleged in the complaint give the receiver’s claims “facial plausibility.” The receiver pled “factual content that allows the court [and a jury] to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Court Description: Civil case - Fraud. In action by receiver against a bank used by the creators of a Ponzi scheme in which the receiver alleged claims for aiding and abetting fraud, breach of fiduciary duty, conversion and false representations and omissions, the complaint sufficiently alleged the actual knowledge aiding and abetting element and substantial assistance in the Ponzi scheme, and the district court erred in dismissing the complaint for failure to state a claim; remanded for further proceedings.
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