A federal appeals court has breathed new life into negligence claims against three banks that allegedly allowed a lawyer to steal $82 million by abusing what he claimed were escrow accounts. The 2nd Circuit reversed a lower court that had dismissed claims in connection with the activities of David Schick, who ultimately pleaded guilty to criminal charges and was disbarred. Investors charged that the banks abetted the fraud partly by not reporting overdrafts on attorney fiduciary accounts to the State Bar.
August 11, 2006 at 12:00 AM
1 minute read
The original version of this story was published on Law.com
A federal appeals court has breathed new life into negligence claims against banks that allegedly allowed a lawyer to abuse what he claimed were escrow accounts and steal $82 million.
The 2nd U.S. Circuit Court of Appeals reversed a lower court judge who had dismissed individual investor claims against three banks in connection with the activities of convicted Ponzi schemer David Schick in the early 1990s.
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