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BMO Harris Offers to Settle for $16m in Connection With Minnesota Ponzi Scheme

BMO Harris Bank said it will pay $16 million in order to settle its involvement in a lawsuit that is seeking $24 billion over allegations of a billion-dollar Ponzi scheme. According to the lawsuit, M&I Bank, later acquired by BMO Harris, played a critical role in allowing Tom Petters to carry out his scheme.

The lawsuit called the bank a “lynchpin” that allowed Petters scheme to gain legitimacy, and also claims that M&I knew about Petters’ fraud and not only did nothing, but allegedly helped perpetuate it. BMO denies the allegations made in the lawsuit, and in response has offered $16 million to put the matter to rest. The bankruptcy trustee involved in the case called the Petters fraud “the third-largest Ponzi scheme in U.S. history.”

BMO has already offered the $16 million settlement, but the bank will have to wait until August 25 to hear if the bankruptcy court approves it.

Tom Petters, a well-known businessman from Minnesota, solicited investments in his companies Polaroid and Sun Country Airlines until he went bankrupt. Mr. Petters is currently serving a 50-year prison sentence after he was convicted of taking his investors’ money for personal use, rather than investing it in his companies’ electronic equipment, as he had promised.

Meyer Wilson reported on the Petters case when it first broke. For more information, visit:

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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