Immigration Investment Fraud Scheme Nets PNC Bank

Mon 26th Aug 2019 | Posted by Glancy Law, on Blog

PNC bank was recently accused of setting up a sham account to help fraudsters milk an immigrant investment program for more than $40 million.

Foreign investors in the Palm House Hotel, a failed condo-hotel project in Palm Beach, Fla., in March sued developer Robert Matthews. They say Matthews and others used money meant for the project as a personal slush fund to buy a yacht and various luxury homes. The investors are now also accusing PNC Bank of participating in the fraud by claiming to create an escrow account for the project investments, which instead operated as a business checking account. That allowed Matthews and others to use the money as they wished, according to a lawsuit filed in South Florida.

The investments were made as part of the federal EB-5 program, which offers green cards to foreign nationals who put at least $500,000 into a business that creates 10 or more jobs. The program, which allows people to pool their investments, has raised fraud concerns among regulators and lawmakers on Capitol Hill.

Federal prosecutors have accused Matthews and Florida attorney Leslie Evans of taking money designated for the Palm House and redirecting it for personal use. The duo began soliciting investments in the property in 2012, including by assuring foreign investors that their money would be protected in an escrow account. Construction on the project screeched to a halt some two years later.

Many of those investors are now trying to get their money back. That includes by suing PNC Bank for aiding in the alleged fraud. A bankruptcy court recently approved the same of the project for just less than $40 million.

Talk with an Investment Fraud Attorney

Fraudulent scams like those alleged in the Palm House Hotel case are unfortunately all too common. They’re often referred to as Ponzi schemes: fraudsters use false claims of big profits to lure people in. Then they use some investors’ money to pay others back in order to keep up the facade of big returns. The schemes sooner or later crumble apart, leaving investors holding the bag.

The good news is that people who have been injured by Ponzi and other scams have the right to take legal action against those responsible. That includes pursuing a class action, which allows people to combine their claims against fraudsters into a single lawsuit. A seasoned investment fraud attorney can help you weigh your rights and options and build the strongest possible case for money damages.

At Glancy Prongay & Murray, we have been representing clients victimized by investment fraud and for three decades. Our class action attorneys take many cases on a variety of contingency fee arrangements, which allows us to share the risk with the people that we represent.

Call us at (310) 201-9150 or contact us online to speak with an investment fraud attorney.