Bank of America: Free Checking, Loan Modifications and.. Ponzi Schemes?

Wednesday, October 28, 2009 , , 1 Comments

I'm shocked this isn't on the front page of every newspaper yet, hell, it's been out since yesterday.

Courthouse News:

Bank of America aided and abetted a $37 million Ponzi scheme disguised as an "investment club" called Diamond Ventures, a class action claims in Federal Court. The class claims the bank knew or should have known that 27-year-old Beau Diamond was running a scam.

The class claims that if BofA followed its own policies of discovery, monitoring, tracking and evaluating of financial activities it would have discovered the scam.

Diamond allegedly stuffed his BofA bank account more than $37 million from April 2006 through December 2008. Diamond holds no securities or commodities license, had no management team or employees and no legitimate business model, his banking activities reflect no investment business or business-generated revenue, only payouts to clients made from new clients' deposits - a classic Ponzi scheme, according to the complaint. Many of the investors lost their life's savings.

They say BofA facilitated the fraud by allowing offshore wire transfers, commingling of accounts, access to unlicensed trading in foreign exchange markets, and a banking platform that facilitated conversion of investors' funds.

BofA's "Premier Bankers" authorized wire transfers of more than $700,000 to Diamond's personal account, according to the complaint, including charges at the MGM Grand Hotel and the Wynn Las Vegas.

My question is this: who in the hell were Diamond's clients? You have to wonder about the sort of person who might invest their life savings with a 27 year old shmuck off the street. If anyone can put me in touch with them, I have a business venture they might be interested in. Cash only.

Anyway, Bank of America obviously broke a few mirrors, walked under a few ladders, and apparently inappropriately violated an entire family of black cats and put the footage on some bizarre Russian animal sex website because it just can't get a break from anyone.

This is but a dent for the old BAC, I'm sure they'll figure out a good excuse. Like "we didn't realize the money coming in from multiple accounts was being commingled, nor did we see anything wrong with a $700,000 money transfer to Vegas." Hell, technically there's nothing illegal about that (though I question Mr Diamond's taste in accommodations).

Also Beau Diamond? At least he's got a backup career in porn since this ponzi thing doesn't seem to be working out.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Hello, I appreciate your writing. I saw Banking Bad too, they are funny! We got ours done with National Mortgage Assistance Center. They recommended to try and work with our bank, but got the run-around too. They work with experienced law firms that do this stuff everyday and was worth paying them to keep our home.
thanks all!~ Anne Taylor