Did Wells Fargo Help a Ponzi Scheme?

Business man giving bank notes to another person. Corruption and Payment concept
By George Khoury, Esq. on April 22, 2019 3:08 PM

According to a recently filed class action lawsuit, Wells Fargo may have been helping out a failing real estate investment firm, known as EquityBuild, cheat their investors.

The lawsuit, brought against Wells Fargo, alleges that the bank knew that EquityBuild was paying old investors with the money it received from new investors. The case further alleges that Wells Fargo even provided financing to help EquityBuild perpetuate their scheme.

Investors Fight Back

The investment firm, which was busted by the SEC last year, offered investors the chance to earn 12 to 20% returns from actual income generating real estate holdings. The big problem was that the holdings of the company could not deliver on that promise, not to mention the fact that the father and son duo in charge of EquityBuild were, allegedly, skimming 15 to 30% off the top of each investment.

The lawsuit was filed by an individual who invested over $300,000 with EquityBuild. She, as well as several other plaintiffs, wired money to EquityBuild at Wells Fargo, on the belief that the investment firm was capitalizing on real estate investments, and not cannibalizing the investors’ capital in a Ponzi scheme, as it was doing in reality.

The plaintiffs hope to rally more investors to join the case, and are seeking class action status to represent all the investors who were duped into putting their money into EquityBuild.

Avoiding Sketchy Investments

For those people who are looking to make their money work harder for them, real estate investing can often appear to be rather lucrative, as can any kind of investing when the promised returns are high. But, like any investment opportunity, investors should be sure to thoroughly research who they are giving their money to.

There are countless different investment scams, and if you thin you’ve been the target of an investment scam, like a Ponzi scheme, you may want to contact a local consumer protection attorney to understand your rights, and how you can take action to recover your money.

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