Defrauded Chinese investors accuse JPMorgan of failure to check transfers to binary options firms

Maria Nikolova

Numerous Chinese investors defrauded by Ponzi scheme Bar Works, say JPMorgan failed to spot the red flags around the activity of the scammers’ bank account with JPMorgan.

A group of 27 Chinese investors who were defrauded by Bar Works, a Ponzi scheme operated by Renwick Robert Haddow, are suing JPMorgan Chase & Co. (NYSE:JPM) and JPMorgan Chase Bank, N.A. over failure to react accordingly to the suspicious activity of the scammers’ bank account with JPMorgan.

Each of the plaintiffs invested in Bar Works entities, whose mastermind was Renwick Robert Haddow. He used the entities to perpetrate a massive Ponzi scheme upon the plaintiffs. Each of the plaintiffs was specifically advised to send his/her investment proceeds to Bar Works Inc’s bank account at JPMorgan Chase Bank, believing that to be a sign that Bar Works was a reputable business.

In their complaint, filed with the New York Southern District Court, the plaintiffs allege that JPMorgan knew that Bar Works was an elaborate Ponzi scheme.

In addition, the plaintiffs say that JPMorgan had actual notice that Haddow was laundering investors’ money, as a result of Bar Works Inc’s deposits being immediately transferred out of the business operating account to known overseas money laundering havens such as Mauritius, the Seychelles and Morocco.

The complaint mentions numerous suspicious transactions, which should have triggered investigations and reports to regulators, including:

  • Amounts being transferred to 27 countries identified as major money laundering countries by the United States Department of State.
  • International wire transfers worth $3.8 million to Portugal, Spain, Cyprus and Poland. Cyprus and Spain are identified as countries of primary concern by the Department of State. Poland and Portugal are identified as countries of concern by the Department of State.
  • About $6.3 million was transferred to Morocco, Isle of Man and Mauritius – major money laundering centres.

There were numerous “red flags” that JPMorgan should have noticed and should have reacted to, the plaintiffs say. The list of such “red flags” include suspicious wire activity with offshore entities.

“Through the bank account with JPMorgan, Haddow frequently engaged in transactions with high-risk, offshore entities, such as so-called “binary trading” operations”, the plaintiffs say.

The defendants are accused of participation in a breach of trust, aiding and abetting embezzlement, aiding and abetting breach of fiduciary duty, aiding and abetting conversion, unjust enrichment, commercial bad faith, and gross negligence. The plaintiffs claim combined $3,050,000 in damages.

The case is captioned ZHAO et al v. JPMorgan Chase & Co., et al (1:17-cv-08570).

Read this next

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

<