MINNEAPOLIS, MN—Following a four-week trial, a Minnesota jury awarded approximately $564 million in damages to Robins Kaplan client Douglas A. Kelley in his capacity as trustee for the BMO Litigation Trust. It is the largest jury award in Minnesota history.
The case arose out of one of the biggest Ponzi schemes in U.S. history involving former Wayzata fraudster Tom Petters. He was convicted and sentenced to 50 years in prison for fraud using accounts held at M&I Bank, which was acquired in 2011 by BMO Harris Bank. The jury found that BMO aided and abetted breaches of fiduciary duty by Petters and his cohorts in using an M&I checking account to launder nearly $74 billion in Ponzi scheme proceeds between 2002 and 2008. The jury awarded $484 million in compensatory damages and $80 million in punitive damages. The trustee also plans to pursue prejudgment interest, which would bring the bank’s total liability to nearly $1 billion.
The case is Kelley v. BMO Harris Bank, N.A., No. 19-cv-01756-WMW in the United States District Court for the District of Minnesota (originally filed as Adversary Proceeding No. 12-04288 as part of the Petters bankruptcy (No. 08-045257) in the United States Bankruptcy Court for the District of Minnesota).