• August 6, 2015

By coincidence, Minnesota Litigator strings three consecutive posts together from three separate cases in which fraud claims have withstood defendants’ motions to dismiss.

R.J. Zayed v. Associated Bank is the third in the line-up.

Associated Bank is alleged by the bankruptcy trustee to have played a role in the Trevor Cook/Patrick Kiley $100+ million Ponzi scheme (chump change, of course).

The Receiver alleges that former Associated Bank Associate Vice President Lien Sarles was complicit in the Cook/Kiley fraud, assisted in masking the true nature of the scheme’s accounts, and falsified account documents.

Sr. U.S. District Court Judge David S. Doty (D. Minn.) notes that Sarles’ brother worked for Mr. Patrick Kiley. Judge Doty denied Associated Bank’s motion to dismiss this week. So the allegations, at least, go deeper than simply suing a “deep pocket” or an “innocent bystander.” We will have to wait for discovery to get to the bottom of that (unless Associated Bank can negotiate a settlement before that expensive and intrusive process gets rolling in which case we will never know).

Associated Bank has retained very high-powered lawyers to defend against the claim. The heavy-hitters took three hard swings on some somewhat legal/technical issues to try to get Associated Bank off the field early (the doctrine of “in pari delicto,” res judicata, and standing) but, this time up, at least, they struck out. Three up, three down…

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