Plaintiffs Allege Umpqua Bank Aided and Abetted in PFI Ponzi Scheme

All links lead to PDFs:

• Camenisch Complaint (Class Action Lawsuit)
  • Order Denying Summary Judgment & Granting Class Certification
  • Umpqua’s Combined Motion re Choice of Law, Partial Decertification, and Summary Judgment
  • Plaintiffs’ Opposition to Umpqua’s Combined Motion
  • Umpqua’s Reply re Combined Motion
  • Order Re Choice of Law & Prejudgment Interest Claim

After Ken Casey died in May 2020, his Ponzi scheme was almost immediately uncovered. For more than a decade, Casey and his partner Lewis Wallach had convinced individuals (many from the Bay Area) to invest in PFI and PISF by promising them steady returns on their investments and ensuring them that their money would be used to purchase and maintain real estate in Marin County and Sonoma County. In reality, PFI and PISF were operating at a massive deficit and surviving only by continually raising new investor money to pay existing investors.

Casey and Wallach ran their scheme entirely through Umpqua Bank’s Novato branch. Investors therefore filed suit against Umpqua, alleging that Casey was only able to keep his Ponzi scheme going for so long because the bank was aiding and abetting the fraud. Plaintiffs allege that while other banks declined to accept PFI and PISF as customers because of Casey’s history of financial crime, Umpqua agreed to look the other way. Plaintiffs allege that Umpqua provided special treatment to PFI as one of the bank’s top customers, and that a banker at Umpqua was intimately familiar with PFI because she worked on the business’ accounts for over a decade. This banker allegedly knew investor money was placed in a particular account, and would transfer investor money from that account for Casey’s personal benefit (and for the benefit of existing investors).

It was not until Casey died, and an outsider had a view of PFI’s financials, that the Ponzi scheme was uncovered. At that point, Casey and Wallach had been running their Ponzi operation through Umpqua for at least 13 years—and Umpqua’s alleged cooperation had caused investors hundreds of millions of dollars in damages.

You can read press coverage on the case in The Seattle Times, The Marin Independent Journal, The Pt. Reyes Light, and The Oregonian.