Bank Fraud Litigation with Conrad & Scherer Partner,
Russell R. O’Brien

Conrad & Scherer is probably most known for its work in the Rothstein Ponzi scheme cases, where we represented a number of investors that were ultimately victim of a multimillion dollar Ponzi scheme. One of the issues with fraud is that by the time a scheme is discovered, usually all of the money has already gone or the victims are really left with collecting pennies on the dollar. What Conrad & Scherer has been able to do, particularly in Rothstein we got 100% of the recovery for the victims plus interest and their attorney’s fees and costs is that we look to the banks. Typically banks are required to know their customers.


They’re highly regulated, and there are ways in which banks themselves become aware of the fraud. And then the Rothstein case and in other cases, they actually participate in it. So not only do we represent individual plaintiffs, but we also represent companies who are subject or victim to fraud. Most recently we represented an insurance company in a multimillion dollar fraud case where a group of probably about, I guess 80 or more medical clinics were committing insurance fraud. And like with Rothstein, by the time the fraud was discovered, the bank accounts for these medical clinics had already been depleted. These were fraudulent clinics. They weren’t even providing medical services, but they were able to collect millions of dollars in insurance benefits.

So what we did by forensically auditing the bank records and from seeking records from the banks, we were able to discover that indeed the banks knew about the fraud and in some cases actually participated in it.

So it’s this expertise that we’ve developed over the course of now over a decade of really being able to go after the banks to get the recoveries where otherwise the monies are no longer available for our clients

In litigating against banks, banks often have a number of privileges that they assert when attempting to seek documents and information and what are, which are needed to prove up your case. Those include the SARS privilege, which is short for a suspicious activity reports. Also the bank examiners privilege.

Other privileges asserted on the Bank Secrecy Act. All of these prevent people from getting access to information. So what we’ve been able to do here at Conrad & Scherer is really test the limits of those objections of those privileges in order to get the necessary information to prove our case. If you don’t have the right lawyers with the right kinds of experience, you’ll never get the documents.

And that’s ultimately how we have been successful. If the bank is not necessarily directly involved in a fraud. If they become aware of the fraud, if the fraudsters are using their accounts to money launder, or to perpetuate the fraud. Then they can become liable. And while the actual perpetrators of the fraud may have already have absconded with the funds or the funds leave the country, well the bank isn’t. The bank is collectible and that’s where we’re able to collect for our clients.