Victims of Ponzi scammer Renwick Haddow suffer another defeat in case against JPMorgan

Maria Nikolova

More than 200 victims of the scammer had filed a notice of appeal from an earlier Court judgment vindicating the bank, but then failed to submit the necessary documents.

JPMorgan Chase

Several months after a group of more than 200 victims of Ponzi scammer Renwick Haddow challenged a ruling by the New York Southern District Court that dismissed their claims that JPMorgan aided the fraudster, the United States Court of Appeals for the Second Circuit nixed their appeal.

The plaintiffs – Hongying Zhao and 244 other individuals, have brought this action against JPMorgan Chase Bank, N.A. (JPMC) and its holding company JP Morgan Chase & Co. The First Amended Complaint asserts the following claims against both defendants: (1) knowing participation in a breach of trust, (2) aiding and abetting embezzlement, (3) aiding and abetting breach of fiduciary duty, (4) aiding and abetting conversion, (5) aiding and abetting fraud, (6) unjust enrichment, (7) commercial bad faith, and (8) gross negligence. Put briefly, the plaintiffs alleged that JPMorgan had aided Haddow.

The Complaint’s primary allegation is that defendants were willfully blind to the fact that non-party Renwick Haddow and his company “Bar Works” were perpetrating a fraud on their investors. On or about February 4, 2016, Haddow opened depository bank accounts for two Bar Works entities at JPMC (the “622 account” or the “379 account”). The plaintiffs mention several examples of account activity that they allege alerted or should have alerted JPMC to the fraudulent nature of the Bar Works enterprise. According to the Complaint, transaction activity from Haddow’s accounts at JPMC generated tens of thousands of dollars in transaction fees for the bank. The plaintiffs further allege that fees associated with the transactions constituted a “large percentage of the wired amount.” As a result of JPMC’s actions, plaintiffs allege that they lost nearly $17 million in capital that they had invested in Bar Works.

In March this year, JPMorgan Chase & Co. (NYSE:JPM) and JPMorgan Chase Bank managed to secure dismissal of the case at the New York Southern District Court.

A notice of appeal was filed on April 12, 2019. However, a raft of procedural failures appear to have happened ever since. Appellant’s brief and any required appendix, due June 26, 2019, has not been filed. The case is deemed in default.

In an order made public on July 30, 2019, the United States Court of Appeals for the Second Circuit orders that the appeal is dismissed. No extension of time to file will be granted.

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