October 12, 2018 / 11:43 PM / in 9 days

BMO Harris Bank to pay $10 mln settle fraud claims against acquired unit

Oct 12 (Reuters) - BMO Harris Bank NA will pay $10 million to resolve allegations against Marshall & Ilsley Bank, which it bought in 2011, that the bank facilitated fraud by Minnesota businessman Thomas Petters, the Department of Justice said on Friday.

The settlement involves no determination of liability, DOJ said. BMO Harris, whose parent company is Bank of Montreal , did not immediately respond to a request for comment outside regular business hours.

A federal jury in 2009 found Petters guilty of orchestrating a $3.65 billion Ponzi scheme, and he was sentenced to 50 years in prison.

Prosecutors alleged that Wisconsin-based Marshall & Ilsley Bank staff knowingly made false promises to Petters’ investors that they would monitor and protect accounts holding proceeds from their investment. This facilitated Petters’ scheme and resulted in millions of dollars in losses to investors, DOJ said (Reporting by Vibhuti Sharma in Bengaluru; Editing by Cynthia Osterman)

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