*Ponzi scheme* alleged in class action suit-LandAmerica subsidiary and SunTrust Banks

[underpants]

LandAmerica subsidiary, SunTrust are targets of suit
http://www.timesdispatch.com/rtd/business/local/article/LAND16_20090115-222443/179730/

A $330 million class-action lawsuit accuses LandAmerica 1031 Exchange Services and SunTrust Banks Inc. of defrauding clients by using their money to pay off other clients.

The lawsuit, filed Wednesday in U.S. District Court for the Southern District of California by four LandAmerica clients on behalf of about 400 customers, characterizes the companies' actions as a Ponzi scheme.

It alleges SunTrust allowed LandAmerica to take money from exchange customer accounts and give it to other clients whose money was locked up in auction-rate securities, a type of investment once considered safe. It says the firms either engaged in or allowed the breach of fiduciary duty, the commission of fraud, and intentionally did not disclose vital information.

The lawsuit claims that LandAmerica used money from new customers to pay off older customers whose money had become inaccessible because it was invested in auction-rate securities, a type of credit that froze in February.

"Once that market failed, should have shut down," California attorney Robert L. "Rusty" Brace said. "Our money was used to pay those other exchangers."

SunTrust was named because it is the bank customers were told would hold their money, according to the lawsuit.

[Tansy_Gold]

1. I can't even begin to tell you how much I loathe

LandAmerica. That they are involved in more underhanded dealings doesn't surprise me in the least.

May they all rot in hell.




TG