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BMO Harris facing lawsuit over Ponzi scheme

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Apr 2, 2012 at 3:34 pm

MILWAUKEE (AP) - Court arguments are scheduled later this month in a lawsuit that accuses a Milwaukee bank of failing to protect investors in a $3.7 billion Ponzi scheme.

BMO Harris, which bought M&I Bank, will argue a lawsuit brought by investors in Florida should be dismissed. The bank says it was merely a conduit for the money in Tom Petters' fraud scheme and that it has no liability for the investors' losses.

The Minnesota man was convicted in 2009. He's in federal prison in Leavenworth, Kan. The lawsuit filed by Palm Beach Finance Partners says Petters could not have kept his Minneapolis-based fraud scheme afloat if the bank had been paying closer attention.

The Journal Sentinel says investors accuse the bank of failing to enforce an agreement designed to protect them from such fraud.