A proposed class action lawsuit has been filed against Comerica Bank on behalf of a group of individuals who purchased investments from the Woodbridge group of companies owned and operated by non-party Robert H. Shapiro. The 30-page complaint states proposed class members were marketed promissory notes and other offerings by Shapiro as “low-risk, high-yield investments backed by high-interest real-estate loans to third-party commercial borrowers.” The suit’s four lead plaintiffs claim Woodbridge, in truth, had few real counterparties, and that almost all of the purported supporting loans touted by Shapiro, who the case says raised more than $1.22 billion from investors, were to his own shell companies, most of which in December 2017 declared Chapter 11 bankruptcy.
Defendant Comerica Bank fits into this scenario, the lawsuit explains, in that it allegedly had notice of Shapiro’s scheme by way of a “series of red flags” stemming from the accounts through which he embezzled more than $21 million.
“Each Woodbridge bank account was opened and maintained at Comerica, and Comerica continued to enable Shapiro’s fraud even after several state regulatory agencies ordered him to cease and desist operations,” the case charges.
Expanding further, the lawsuit alleges Shapiro comingled investors’ funds into a single operating account under his control that saw “nearly 11,000” Comerica account transactions totaling upward of $1.66 billion.
“Shapiro’s banking activities at Comerica were integral to his scheme to defraud investors,” the plaintiffs argue. “Comerica substantially assisted, and had knowledge of, the Woodbridge investor fraud. Comerica therefore is liable to [the plaintiffs] and the other defrauded investors for their losses.”