A US banking giant has agreed to pay tens of millions of dollars to settle allegations that it knowingly facilitated a consumer scam.
In a lawsuit filed in the U.S. District Court for the Southern District of California, plaintiff Thomas W. McNamara accuses Wells Fargo of aiding and abetting fraud, conspiracy to commit fraud, and inducing fraudulent transfers and/or voidable transfers.
Court documents allege Wells Fargo customers lost money to so-called “risk-free” scams perpetrated by Triangle Media Corporation and Apex Capital Group.
Prosecutors say the scheme involved selling personal care products online while offering free trials for just the cost of shipping, amounting to $4.95. But consumers were charged $90 after just two weeks, and canceling or getting a refund was nearly impossible.
Prosecutors allege that Wells Fargo bankers knew about the risk-free pilot program and “knowingly assisted the operators” of the scam by opening 150 bank accounts for shell companies controlled by Triangle and Apex.
“Wells Fargo subsequently allowed millions of dollars to be deposited into the accounts, knowing that these funds had been unlawfully obtained in the risk-free pilot programs, and then allowed the Enterprise operators to transfer their ill-gotten gains from the shell accounts to third-party bank accounts, including accounts outside the United States.”
The latest court filings on the case show that Wells Fargo has agreed to pay $33 million to settle the allegations. It also denies any claims and any wrongdoing or liability.
“Plaintiffs and Defendants have agreed to a settlement solely to remove the uncertainty, burden and expense of further protracted litigation.”
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