The jury’s dead ends on the alleged complicity of Marin Bank in a $ 250 million scam

A federal jury was involved in a trial to determine whether the Umpqua bank encouraged a financial regime based in Novato, which has bilked some $ 250 million in dollars.

The three -week test came from a collective appeal that investors filed against the bank. The jury began the deliberations on February 26 and announced the dead end on Tuesday.

“We were all shocked not to be able to make a verdict,” said Philip Lastreto, who lived in San Rafael when he invested his money. “I am embarrassed to admit that $ 706,000 invested. There are a group of us, friends and family, about five of us who have invested around 2.9 million dollars. »»

Another trial before the same San Jose court was temporarily scheduled for April 28.

Amy Zemanj, partner of Gibbs Law Group in Oakland, said: “Although we think we have presented many evidence to support a verdict for the complainants, we appreciate that it is not a simple task for a jury to reach unanimous. We are convinced that we will do the job. »»

Kurt Heath, spokesperson for the Umpqua bank, said: “We thank the jury for his service and request the dismissal of this court affair on our requests awaiting post-processes.”

The fraud was designed by Ken Casey, a businessman from Novato, and his accomplice, Lewis Wallach. They led the program between 2007 and 2020 through real estate investment companies called Professional Financial Investors Inc. (PFI) and the Professional Investors Security Fund. PFI worked through bank accounts maintained in the Umpqua branch in Novato.

“When the checks or son of investors were deposited in one of the accounts of accounts of the PFI company, their money should have been quickly erased in a separate investment account, where it could be used to buy real estate,” alleged the prosecution. “But without the investors’ knowledge, their money often remained in the compensation account until it was used to finance transfers on the personal bank accounts of Casey and Wallach, covers recurring overdraft in other accounts and finance monthly payments to other investors.”

A key witness during the trial was June Weaver, a banker from the Novato branch who worked in close collaboration with PFI for almost 15 years.

“During her deposit, Weaver admitted that she had spent a lot of time monitoring PFI’s accounts and helping them mix money to remedy the discoveries and shortages of funds,” said the trial.

The trial indicates that Weaver initially denied knowing that PFI used investors’ money to an inappropriate objective, but later admitted that it was aware when it was confronted with many of the 1,600 e-mails that it exchanged with PFI.

The prosecution says that in 179 times, Tisserand or others to the branch personally transferred a total of $ 5.2 million to one of the personal accounts in Casey or Wallach.

The scam was discovered after the death of Casey in 2020. Wallach was found guilty of fraud by thread and a conspiracy to commit fraud by wire and to sentence to 12 years in prison.

In addition to Weaver’s testimony, the complainants presented circumstantial evidence that Umpqua should know that PFI used investor money.

The prosecution indicates that between June 2018 and April 2020, the automated system of Umpqua to monitor the fraud indications issued 146 alerts for PFI accounts – at least 61 of which specifically reported the compensation accounts for companies for a more in -depth investigation.

The trial indicates that after the exposure of fraud, Umpqua launched an internal examination of PFI accounts, but quickly abandoned it after having realized that the Novato branch regularly helped Casey to transfer investor funds to its personal bank accounts.

The complaint quotes an email of a novato branch director: “Holy Moly I see that the transfers have been authorized ($ 40,000.00 of transfer from the PFI (transfer account) to (Casey personal account) on 5/12 and 21,000.00 $ on 4/12 and 25,000.00 on 3/31).”

The prosecution indicates that it should have been impossible for Casey to continue his life as a financial crime after having pleaded guilty in the late 1990s to 21 charges for banking fraud, five taxes of tax evasion, five charges of assistance and assistance in the preparation and deposit of false tax declarations and a conspiracy chief to defraud the United States.

A local bank belonging to a friend of Casey was willing to provide PFI banking services despite the casey file, according to the trial. This company, Circle Bank, was acquired by Umpqua in 2012.

The jury examined the testimony of a former director general of the Bank of Circle during his deliberations, said Linda Lam, a lawyer of a applicant.

The trial indicates that even if Umpqua “apparently did not keep most of this bank’s files, it has circulated internally a memorandum which discussed the criminal history of Casey.”

The pursuit alleys that the employees of the Novato branch were encouraged to do nothing to stop the fraudulent activity of PFI.

“Umpqua attributes to the employees of the branch an objective for customer accounts and total deposits and premiums, commissions and incentives for these measures,” said the trial. “The declaration of PFI’s fraudulent activity would have caused the Novato branch to lose dozens of accounts and more than 10% of its total deposits, resulting in a reduction in compensation, worst performance exams and potentially even loss of job.”

“Our argument is certainly that the Umpqua was to benefit from the deposits that PFI had with the bank,” said Lamb. “PFI was one of the largest customers, if not the largest for the Novato branch and among the 20 best UMPQU -style businesses.”

Heath said the bank had no knowledge of the regime.

“Wallach, who is currently serving the time of the federal prison for his role, testified under oath that he and Casey have actively hidden him to the bank,” said Heath. “This case is an excessive attempt at the lawyers of the trial to request a new resumption of the losses of investors by targeting the PFI deposit bank.”

“For our defense, we will continue to underline a commitment to transparency, ensuring that all the facts are revealed for the jury so that this case can be brought to a fair resolution,” said Heath. “The Umpqua bank should not be held responsible for the criminal acts of Lewis Wallach and Ken Casey, and we are impatient to present our file to the jury.”

Originally published: March 6, 2025 at 6:50 am PST