November 14, 2009 – The Boston Law Offices of the attorney and Washington D.C. based, Steven Berk (Berk Law), in conjunction with Cotchett, Pitre & McCarthy, has filed a class action against JPMorganChase as the successor in interest to Washington Mutual (“WAMU”) in the US District Court for the Northern District of California. The complaint alleges that WAMU’s banking services played an integral role in facilitating the $150 Million Ponzi scheme perpetrated by William Wise and Millennium Bank.
According to the complaint, Wise and Millennium Bank raised over $150 million from over 250 investors by promising returns as high as 9% on premium certificates of deposit, when the market was offering much lower rates. Millennium Bank was primarily operated out of Napa, California and claimed to be a subsidiary of United Trust of Switzerland, another Wise entity. Millennium Bank’s sophisticated internet marketing allowed them to dupe hundreds of investors worldwide.
As described in the Complaint, Millennium Bank’s staff in Napa instructed purchasers of the high-yield CDs to wire funds to its WAMU accounts opened in Las Vegas, Nevada under fictitious names, or to send checks to Napa, which were subsequently deposited into these accounts. The money then moved offshore or was used to pay for Wise’s lavish lifestyle. There is no evidence that he made any investments with victims’ money. A copy of the Complaint appears below:
Wise’s and his staff’s checkered past, which included securities violations in the US and Canada, apparently did not deter WAMU from providing banking services and laundering millions to offshore locations. The complaint alleges that Wise previously used at least three other banks, which ultimately refused to do business with him, after gaining knowledge of Millennium’s business activities.
Ultimately, millions of dollars were processed through WAMU, much of it through its branches in Napa. When that office couldn’t keep up with the activity, WAMU branch officials suggested that Millennium Bank set up a remote wiring capability and then a remote deposit facility, allowing Millennium to operate a “bank within a bank” from its Napa office. In each instance, prior to authorizing this capability, WAMU conducted audits of the Millennium accounts, but apparently elected to ignore the suspicious banking activities taking place. _________________________________________________________________________
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