Rothstein Ponzi Victims Seek Additional Sanctions Against TD Bank

FT LAUDERDALE (CBSMiami) – An attorney for a group of investors swindled in Scott Rothstein’s $1.4 billion Ponzi scheme returned to court Monday seeking additional sanctions against TD Bank.

The group of 55 investors, known as the “Razorback Group and represented by Fort Lauderdale attorney William Scherer, claim TD Bank violated the rules of discovery by not giving accurate information, and withholding other information, and should therefore face additional sanctions.

In 2013, TD Bank settled allegations that it failed to report suspicious activity in accounts linked to the Ponzi scheme. The Security and Exchange Commission said the bank also deceived investors by saying that it had restricted Rothstein’s transfers of money in the accounts. The Cananda-based bank agreed to a $170 million settlement, according to published reports.

In January 2012, a federal jury decided that TD Bank owed an investment firm $67 million for its role in Rothstein’s scheme. The verdict came in a lawsuit filed by Coquina Investments, based in Corpus Christi, Texas.

Testimony and court documents in the Coquina trial showed that Rothstein used his TD Bank accounts as an integral part of the Ponzi scheme. Conspirators in his scheme allegedly posed as TD Bank employees.

The Razorback Group maintains TD bank and Coral Gables based Gibralter bank allowed Rothstein’s fraud to flourish, according to the Sun Sentinel. In February 2012, Gibralter settled with the Razorback Group for $10 million.

Rothstein, 49, who boasted in a deposition that he had bankers “in my pocket,” is serving a 50-year prison sentence.

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