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U.S. Bancorp ordered to pay in fraud case

December 15, 2007|From the Associated Press

A jury has ordered U.S. Bancorp to pay $17.6 million in a civil lawsuit brought by the trustee overseeing the bankruptcy of a company that defrauded investors out of $45 million.

The Orange County Superior Court jury concluded last week that the bank should have known about fraudulent accounts that it opened for operators of Newport Beach-based DFJ Italia Ltd.

Seven people have pleaded guilty to federal charges stemming from the financial scam, which ran from 1996 to 2000.

The company promised annual returns of 24%, but investors' money was instead directed to the people who ran the scam and to pay other investors. Among those who lost money in the scheme was former pro football star Eric Dickerson.

DFJ Italia sought Chapter 7 bankruptcy protection in 2000.

Bankruptcy trustee Thomas H. Casey sued U.S. Bancorp, Wells Fargo Bank and City National Bank two years later, claiming that the financial institutions aided and abetted DFJ Italia's operatives by failing to discover their bogus bank accounts.

Wells Fargo Bank and City National Bank earlier reached settlements in the suit.

U.S. Bancorp attorneys argued that it shouldn't be held responsible for the actions of criminals. The bank plans to appeal the jury's verdict.

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