Cut the Check: TD Bank Agrees to a Massive Settlement of $1.2 Billion in Ponzi Scheme

Cut the Check: TD Bank Agrees to a Massive Settlement of $1.2 Billion in Ponzi Scheme

Financial institution, TD Bank, has been named in a Ponzi scheme organized by disgraced financier Allen Stanford, but still stands on the grounds of not being involved.

CNN reported the bank agreed to a massive settlement of $1.2 billion to a court-appointed receiver who will pay back victims of the scheme. The Canadian-founded bank issued a statement proclaiming its innocence.

“As has been the case throughout these proceedings, TD expressly denies any liability or wrongdoing with respect to the multi-year Ponzi scheme operated by Stanford and makes no admission in connection to any Stanford matter as part of the settlement,” the statement read.

The settlement came shortly after other banks named in the scheme reportedly negotiated a settlement. USA Today reported HSBC Holdings is set to pay $40 million and Independent Bank will dish out $100 million. The settlements will first need to be approved by a judge.

Stanford was found guilty in 2012 on 13 counts of fraud-related charges in Houston. Prosecutors claimed Stanford sold billions of dollars in fake certificates of deposit provided by Stanford International Bank Ltd., an offshore bank in Antigua, victimizing thousands of clients. TD Bank was named after a lawsuit said the bank collected the deposits in U.S. and Canadian dollar values and continued to ignore warning signs about the Antigua-based bank for years.

Clients were allegedly told the purchased certificates of deposit averaged a rate of return between three and four percent higher than U.S. certificates and the bank made “safe” investments in stocks and bonds. However, that wasn’t the case, as the money was actually used to fund Stanford’s lavish lifestyle, purchasing multiple homes in the Caribbean and United States.

Counsel representing the receiver, Kevin Sadler, was ecstatic with the outcome. “Given all the challenges faced by the receivership since 2009, this is nothing short of a monumental recovery,” Sadler said. “We look forward to obtaining prompt approval of the settlements and distributing these much-needed funds to the Stanford victims.”