LAS VEGAS, NV Jul 08, 2010 (Las Vegas Review-Journal – McClatchy-Tribune Information Services via COMTEX) — Wells Fargo Bank participated in “massive looting” at failed hard-money lender USA Capital, according to allegations in a civil trial that began Wednesday in bankruptcy court.
Bankruptcy Judge Linda Riegle is presiding in the adversary case and will decide whether investors and creditors of USA Capital are entitled to a judgment from Wells Fargo for damages.
The plaintiffs’ attorneys alleged that Wells Fargo assisted in “a massive looting, self-dealing, and related Ponzi scheme” at USA Capital. In a Ponzi scheme, existing investors are paid with money from new investors.
The allegations stem from the handling of 30 bank accounts that USA Capital maintained at Wells Fargo, according to court papers.
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