TD Bank to pay $20 mln to settle Ponzi scheme lawsuit -attorney

Fri Jul 17, 2015 1:35pm EDT
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By Dena Aubin

NEW YORK, July 17 (Reuters) - TD Bank has agreed to pay $20 million to settle a class action lawsuit accusing it of aiding a Ponzi scheme that allegedly bilked over a thousand European investors of more than $223 million, a lawyer for the investors said on Friday.

The preliminary settlement, subject to court approval, resolves accusations that TD Bank, part of Canada's Toronto-Dominion Bank, failed to properly monitor trust accounts that held investors' money and ignored its duty to investigate suspicious activities under U.S. anti-money laundering rules.

"This is a terrific result for the class," said David Buckner, a lawyer for the investors.

A TD Bank spokeswoman said it is pleased the matter is close to a resolution.

In court filings, lawyers for TD Bank said investors failed to show the bank had actual knowledge of misconduct. The bank provided routine banking services, which did not constitute substantial assistance to the alleged scheme, the lawyers said.

Filed in 2014, the lawsuit sought damages for investors in Belgium, the Netherlands and Spain who bought so-called life settlements marketed through Quality Investments, a Dutch company with offices at the World Trade Center Amsterdam.

Life settlements are life insurance policies sold to investors who receive proceeds from death benefits when the insured person dies.

Dutch authorities in 2011 arrested four people suspected of running a Ponzi scheme through Quality Investments involving the sale of U.S. life insurance policies.   Continued...