Bank of America whistleblower at heart of new Rothstein Ponzi suit

Lawsuit alleges bank VP advised Ponzi feeder to make investment in scheme

(John Coughlin/CNNMoney)

FORT LAUDERDALE, Fla. – Fort Lauderdale attorney Bill Scherer is suing yet another big bank -- this time Bank of America, and on behalf of Scott Rothstein Ponzi scheme victims, to the tune of $300 million.

Scherer's lawsuit alleges Bank of America Vice President Frederick Perry advised mega-wealthy Ponzi feeder Doug Von Allmen to make an investment in the scheme, totaling $85 million, even though he had suspicions that Rothstein was a crook.

"They (Bank of America) didn't tell [Von Allmen] that they knew it was a fraud," said Scherer. "[Perry] told numerous clients to stay away from [Rothstein] because he is dirty."

The lawsuit includes an email purportedly from Perry to his colleagues in 2008, a year before the Ponzi scheme imploded, in which he advises them to "stay away" from Rothstein.

Scherer said that in 2007 the bank rejected business with Rothstein after it learned he was attempting to collateralize a loan with his law firm's trust funds, something Scherer said was illegal.

Despite that, Perry approved Von Allmen's massive investment in Rothstein's scheme, the lawsuit alleges, because the bank was trying to convince Rothstein to do his banking -- with hundreds of millions of dollars in deposits -- at Bank of America.

"They just couldn't resist that money going into the bank," said Scherer.

Instead, the Ponzi scheme imploded. The star witness in Scherer's suit is another former Bank of America Pice President John Abbuhl, whom Scherer describes as a whistleblower.

"Senior Vice President John Abbuhl went to [other bank officials] while they were considering the Von Allmen business and said, 'You have to tell him that we are suspicious what is going on is illegal,'" Scherer said. "They told him to mind his own business."

A bank spokesman didn't respond to a phone call for comment but the bank said in a media statement that it would "vigorously" fight the lawsuit.

Scherer said he has recovered a total of nearly $300 million for the victims he represents so far, most of it from TD Bank, which held Rothstein's Ponzi accounts.