Washington Mutual alledgedly enabled a nearly $200 million Ponzi scheme, and now JPMorgan Chase has to deal with the victims’ lawsuit.
According to the class action, filed in San Francisco federal court, WaMu “actively and knowingly participated in the fraudelent activities” of Millennium Bank, a Carribean financial institution that sold high-yield CDs on the internet but was really a “massive Ponzi scheme.”
Millennium used WaMu accounts in Napa and was kept as a bank client despite two audits, according to the suit: “WaMu’s involvment was critical to the successful execution and obfuscation of this fraudulent scheme.”
In March, the SEC filed an action against Millennium, alleging that they operated an over $150 million Ponzi scheme.
“This case can be summarized in one word – greed” said Niall McCarthy of Cotchett, Pitre & McCarthy, the firm filing the suit. “It is a Bay Area Madoff.”
Indeed, Cotchett Pitre & McCarthy has been a central player in the Bernie Madoff case, suing on behalf of victims.
JPMorgan doesn’t traditionally comment on pending litigation.
Here’s the class action suit, via Courthouse News: