Three Charged With Ponzi Scheme at Center of Deutsche Bank Suits
Ponzi in Deutsche Bank Suits Spurs Charges Against Fund Managers
(Bloomberg) -- Three former managers of a Florida financial services firm were charged with running a multimillion-dollar Ponzi scheme that is the subject of civil lawsuits against Deutsche Bank AG.
The three, formerly of Biscayne Capital, were arrested and charged with conspiring to defraud investors and financial institutions in a scheme prosecutors claim caused more than $155 million in losses. An indictment against them was unsealed Wednesday in federal court in Brooklyn, New York.
Civil suits filed earlier by the liquidators of two bankrupt investment funds claim that Deutsche Bank turned a blind eye to evidence of the alleged fraud. The bank is seeking to have the suits dismissed.
Deutsche Bank, which has said the civil claims have no merit, said in a statement on Thursday that it is working with the government.
“The bank has been identified as a potential victim of the scheme,” spokesman Dylan Riddle said. “We continue in our cooperation with the Department of Justice investigation.”
The three defendants used funds they got from clients and financial institutions through fraud to pay other investors, cover expenses incurred by Biscayne and reap millions of dollars for themselves, prosecutors said in a statement.
The three -- Roberto Gustavo Cortes Ripalda, Fernando Haberer Bergson and Ernesto Heraclito Weisson Pazmino -- were arrested Wednesday, prosecutors said. They said Cortes was arrested in Spain, Haberer in Argentina and Weisson in Florida.
The case is U.S. v. Cortes, 21-cr-00458, U.S. District Court, Eastern District of New York (Brooklyn).
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