Zayed v. Associated Bank, N.A., No. 17-1250 (8th Cir. 2019)Annotate this Case
The receiver filed suit against Associated Bank, which provided banking services to some of the scammers' entities, accusing the bank of aiding and abetting the Ponzi scheme. The Eighth Circuit affirmed the district court's conclusion that there was insufficient evidence to reasonably infer the bank knew about and assisted the scammers' tortious conduct. The court held that a conclusion that the bank aided and abetted the Ponzi scheme could only be reached through considerable conjecture and speculation. In this case, the receiver failed to show that the bank had actual or constructive knowledge of the fraud or that it provided substantial assistance to the tortious conduct.
Court Description: Grasz, Author, with Shepherd and Kelly, Circuit Judges] Civil case - Fraud. For the background regarding the Receiver's efforts to recover assets for the victims of a Ponzi scheme, see Zayed v. Associated Bank. N.A., 779 Fed. 3d 727 (8th Cir. 2015). Here, the Receiver sued Associated Bank which provided banking services to some of the entities perpetrating the fraud, accusing the bank of aiding and abetting the Ponzi scheme. Held, the district court did not err in concluding there was not sufficient evidence to reasonably infer that the bank knew about and assisted the entities' tortious conduct; under Minnesota law, to recover for aiding and abetting a tort, a plaintiff must show a tort, that defendant knew the tortfeasor's conduct was a breach of duty and that the defendant substantially assisted or encouraged the primary tortfeasor in the achievement of the breach; accepting that a tort occurred, the Receiver failed to show defendants had actual or constructive knowledge of the fraud or that they provided substantial assistance to the entities' tortious conduct. Judge Kelly, dissenting.