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‘Justice has prevailed’: Seminole Tribe wins $832M verdict against Wells Fargo Bank

A jury has awarded more than $800 million to the Seminole Tribe of Florida after finding that Wachovia Bank and its new owner Wells Fargo Bank charged more than $7 million in unauthorized fees and mishandled a trust fund set up for the tribe’s children.

The civil jury in Broward County court found on Tuesday, March 25, that the bank and eight employees had violated their fiduciary responsibilities to the tribe and its children and failed to properly invest the funds deposited into the account.

“This verdict should be a wake-up call for all financial institutions that think they are above the law and can take advantage of their clients,” said attorney William R. Scherer Jr., founder and managing partner of Conrad & Scherer, which represented the tribe  along with Seminole general counsel Jim Shore.

“In this case, those hurt by these actions were innocent children, which is unforgivable,” Scherer said. “Justice has prevailed, and while we cannot reverse the damage caused, this resolution provides meaningful compensation and safeguards for these minors.”

Seminole tribal members from six reservations throughout Florida packed the courtroom to show their support throughout the six-week trial, which began with jury selection on Feb. 10. Closing arguments were held Monday, March 24, and the jury began deliberations Tuesday, March 25.

The jury came back after only about six hours of deliberations, delivering the verdict to a largely empty courtroom. Since no one could predict how long deliberations would take, only the attorneys were in the courtroom when the verdict was read, along with the judge, jurors and court officials.

Most of the tribal members watched it live on a Zoom link provided by the court as they jury awarded more than $825 million in damages and more than $7 million in compensation for fees collected. Judgments ranging from $50 to $500 were assessed against the individual employees.

Wells Fargo had no comment after the verdict was announced, but has indicated it plans to appeal.

Taking money from children

The Florida tribe set up the Seminole Minors Per Capita Payment Trust in 2005 as it was preparing for its 2006 purchase of Hard Rock International, the music-themed chain of restaurants, hotels and casinos that has since expanded into a successful brand of casino resorts around the world.

The expansion brought great prosperity for the tribe, which set up funds for the children, stipulating initially that they could not collect the money until they reached age 17, later changed to 24 and then 30, and after they had taken financial management courses and proven to be drug-free.

The fund was entrusted to Wachovia Bank, now owned by Wells Fargo, and was their largest trust account at the time. The Seminole removed Wells Fargo from the trust in 2016 after tribal officials reviewed the low rate of return and questioned the $7.6 million in fees charged by the bank, according to the suit.

The bank tried to broker a new deal instead of owning up to mismanagement, according to the lawsuit, and the tribe sued.

As the sole trustee to the fund, Wells Fargo was accused of bilking 2,000 beneficiaries of an estimated $818 million in damages and lost income. The lawsuit accuses the bank and eight representatives of breaching their fiduciary duty, engaging in intentional misconduct and unlawfully collecting millions of dollars in unlawful fees for more than a decade.

The bank had countered that the Seminole Tribe insisted on conservative investments and was to blame for the low returns.

About half-way through the trial, a former relationship manager for Wells Fargo admitted under cross-examination by the tribe’s lawyers that the bank had engaged in illegal misconduct and misappropriated as much $2 million to $3 million per child.

‘Justice has prevailed’

The trust account has now more than doubled since moving to another management firm.

In 2016, the trust had about $1.4 billion in assets; it now has about $3 billion.

“It was a privilege to represent the Seminole Tribe of Florida and bring justice to the children of the Seminole Tribe,” Scherer said in a statement. “It was imperative that Wells Fargo be held accountable for engaging in intentional misconduct, breaching its fiduciary duty and unlawfully collecting millions of dollars in fees that resulted in a devastating monetary loss to the value of the Seminole Tribe of Florida’s Minors’ Trust