Judge Allows Lawsuit Charging Umpqua Bank with Aiding and Abetting the PFI Ponzi Scheme to be Heard by a Jury and Certifies Class of Investors

A federal class action lawsuit charging Umpqua Bank with aiding and abetting a massive, decades-long Ponzi Scheme may proceed to jury trial on behalf of a class of investors, according to a judge’s ruling from Friday. The Court’s decision clears the way for over a thousand harmed investors to pursue their legal claims against Umpqua Bank in a single trial. Oakland-based Gibbs Law Group, along with Silver Law Group, represent PFI investors in the class action lawsuit.

The victims assert that Umpqua Bank knew that Professional Financial Investors (“PFI”) and its principals, Ken Casey and Lewis Wallach, were using new investor money to pay existing investors and to line Casey’s and Wallach’s personal accounts, yet continued to provide banking services to PFI for nearly a decade. The massive PFI Ponzi Scheme was broadly uncovered in 2020, upon Casey’s death, when the executor of his estate discovered that rather than paying investors returns from real estate investments as represented, PFI was surviving only by continually raising new investor money to pay existing investors.

The investors’ lawsuit against Umpqua Bank specifically charges that bank employees ignored multiple red flags and took egregious steps to prop up the scheme. According to the lawsuit and recently unsealed case records, some of the bank’s actions include:

• An Umpqua Bank employee admitted that she removed Casey’s name from PFI’s bank records at the company’s request, even though Umpqua documents show it knew Casey was a convicted felon with a history of financial crime.
• An Umpqua Bank employee regularly transferred funds to Casey’s personal bank accounts from PFI bank accounts, which she knew were used to intake money from new investors.
• PFI’s private banker at Umpqua warned PFI that an investor’s concerned attorney had contacted the bank, but the banker assured PFI that “they got nothing from us.”
• Umpqua’s automated fraud monitoring system repeatedly warned the bank of suspicious activity involving investor money.

“The Court’s ruling today is a meaningful step toward achieving justice for the investors who were victimized by this longstanding scheme,” said Linda Lam of Gibbs Law Group, representing the plaintiffs. “Umpqua Bank’s cultural emphasis on profits above all else led to a banking environment where employees knew about illicit activity but allowed it to continue for years on end.”

PFI investors who would like to learn more about their legal rights in the Umpqua Bank PFI Ponzi Scheme Class Action Lawsuit may contact our team at (510) 350-9722.

About Gibbs Law Group

Gibbs Law Group is committed to protecting the rights of investors and consumers nationwide who have been harmed by corporate fraud and misconduct. The firm has recovered over a billion dollars for its clients against some of the world’s largest corporations, and our attorneys have received numerous awards for their work, including “Class Action Practice Group of the Year,” “Top Boutique Law Firms in California,” “Best Lawyers in America,” “Titans of the Plaintiffs Bar,” “Top Plaintiff Lawyers in California,” “California Lawyer Attorney of the Year,” and “Top Class Action Attorneys Under 40.”

About Silver Law Group

Silver Law Group is a nationally recognized securities and investment fraud law firm representing investors worldwide to recover their investment losses. The law firm focuses on plaintiff-side class action litigation and securities arbitration claims representing individual investors and institutions in claims against brokerage firms, investment advisors, commodities firms, hedge funds and others. Silver Law Group also routinely serves as counsel to receivers and trustees in matters relating to the recovery of investor losses in Ponzi schemes. Admitted to practice in New York and Florida, our attorneys have recovered millions of dollars for defrauded investors.

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