IN THE CIRCUIT COURT OF THE

17TH JUDICIAL CIRCUIT, IN AND

FOR BROWARD COUNTY, FLORIDA

CASE NO. ________________

DEAN KRETSCHMAR; DAVID VON

ALLMEN, as trustee of the DAVID VON

ALLMEN LIVING TRUST; ANN VON

ALLMEN, as trustee of the ANN VON

ALLMEN LIVING TRUST; LAURA

STRASSER; and CARL STRASSER;

DAVID VON ALLMEN; LINDA VON

ALLMEN, as trustee of the VON ALLMEN

DYNASTY TRUST; DOUGLAS J. VON

ALLMEN; D&L PARTNERS, LP;

Plaintiffs,

v.

BANK OF AMERICA, N.A.; FREDERICK

PERRY; MARK R. MALLER; BRIAN

MORMILE; and DOUGLAS DIVIRGILIO;

Defendants.

_______________________________________/

COMPLAINT

Plaintiffs DEAN KRETSCHMAR; DAVID VON ALLMEN, as trustee of the DAVID

VON ALLMEN LIVING TRUST; ANN VON ALLMEN, as trustee of the ANN VON

ALLMEN LIVING TRUST; LAURA STRASSER; CARL STRASSER; DAVID VON

ALLMEN; LINDA VON ALLMEN, as trustee of the VON ALLMEN DYNASTY TRUST;

DOUGLAS J. VON ALLMEN; and D&L PARTNERS, LP (collectively, the Von Allmens);

for their Complaint against Defendants BANK OF AMERICA, N.A.; FREDERICK PERRY;

MARK MALLER; BRIAN MORMILE; and DOUGLAS DIVIRGILIO, allege as follows.

Filing # 11952315 Electronically Filed 03/31/2014 04:56:50 PM

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I. OVERVIEW

1. Bank of America helped notorious Ponzi schemer Scott Rothstein defraud the

Von Allmens out of $85,700,000.00. Bank of America actively concealed its knowledge of the

Rothstein fraud scheme and helped maneuver the Von Allmens into investing in the Rothstein

scheme. Bank of Americas goal was to impress Rothstein enough to induce him to deposit his

ill-gotten billions at Bank of America and become the Rothstein schemes principal banker.

After the Rothstein scheme crashed, Bank of America had its Senior Vice-President lie

repeatedly under oath in deposition to try to cover up the Banks actions.

2. On January 27, 2010, Scott Rothstein pled guilty to five counts of fraud for

operating a billion-plus-dollar Ponzi scheme, the largest investment fraud in Florida history. On

June 9, 2010 Rothstein was sentenced to 50 years in federal prison.

3. Plaintiffs are some of the worst-injured victims of Rothsteins fraud.

4. By 2009 Plaintiffs, the Von Allmen family had been personal banking and

investment management and advisor clients of Bank of America in Fort Lauderdale (the Bank)

for over 14 years. Defendant Fred Perry (Perry), Bank of Americas U.S. Trust division

Senior Vice-President, was the Von Allmens personal banker and financial and investment

advisor.

5. In 2009 Bank of America became aware that the Von Allmens were interested in

investing in Rothsteins investment scheme.

6. The Bank through Perry and other senior Bank officers knew in 2009 that the

Rothstein scheme was fraudulent. Before the Von Allmens invested in the Rothstein investment

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program, the Bank performed due diligence reviews of the program in 2007, 2008, and 2009.

The reviews confirmed that it was a scheme to defraud.

7. When the Von Allmens expressed to Bank of America through Perry in April

2009 their interest in investing in the Rothstein investment program, the Bank including Perry

knew that Rothstein was dirty, a crook, a bad guy, of dubious provenance, that it was

never believed to be if but rather when [Rothstein] would be caught doing something illegal,

that Rothsteins law firm, RRA, was a known bad entity, that Rothsteins investment scheme

offered returns that were too good to be true and couldnt get past the sniff test, that the

Bank didnt believe the returns, and that the Bank should stay away from Rothstein.

8. The Bank knew it had a fiduciary duty to warn the Von Allmens and its other

clients that the Rothstein investment scheme was a fraud. Perry wrote that On numerous

occasions we have made our suspicions known to clients interested in doing business with him or

his firm.

9. Yet the Bank decided in 2009 not to make their suspicions (conclusions, actually)

known to the Von Allmens. The Bank including Perry singled out the Von Allmens and actively

concealed what they knew about the Rothstein fraud. They did so over the objections of another

Bank of America Senior Vice-President, who reminded them in clear terms that they had a

fiduciary duty to disclose to the Von Allmens what they knew about Rothstein. Shortly after

that, the Senior Vice-President who had objected was branded a squeaky wheel and pressured

to quit.

10. The Bank had financial statements from Doug Von Allmen in 2009 showing that

he had a very substantial net worth. The Bank through Perry helped maneuver the Von Allmens

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into investing $85.7 million of their money in the Rothstein scheme, at a time when the scheme

was desperate for money. In return, the Bank asked Rothstein to deposit his billions of Ponzi

scheme dollars into Bank of America accounts.

11. In other words, Bank of America (slogan: Higher Standards) willingly

sacrificed $85.7 million of its fourteen-year private-banking client and his familys money so

that the Bank could help keep the scheme going, do business with Scott Rothstein and,

ultimately, become the Rothstein Ponzi schemes principal banker. I told [Rothstein] I thought

he should be aligned with a national U.S. brand [Bank of America] versus some of the smaller

foreign owned brands [TD Bank and Gibraltar Bank]. (Perry deposition)

12. When Rothsteins Ponzi scheme collapsed on Halloween 2009, the Von Allmens

lost virtually all of the money that they had invested, i.e., $82.5 million. Thanks to the Banks

deliberate concealment of Rothsteins fraud, the Von Allmens and other victims unwittingly

invested an additional $565 million into the scheme from May to October 2009. Bank of

America helped turn the Rothstein saga from a disaster into a full-fledged catastrophe for South

Florida.

13. After the Ponzi scheme collapsed, Bank of America tried hard to cover up its

wrongdoing. The Bank had Perry lie repeatedly under oath in deposition about whether the Bank

was aware of Rothsteins fraud and about whether the Bank ever warned the Von Allmens about

it. After the deposition, Perry and other Bank of America senior executives got together and

refined the lies in so-called deposition correction pages (Errata Sheets) in order to try to make

the lies more saleable.

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II. PARTIES; JURISDICTION; VENUE

14. Plaintiff DEAN KRETSCHMAR (Linda Von Allmens son and Doug Von

Allmens stepson) (Dean) is an individual who resides in Broward County, Florida. On or about

June 3, 2009, Dean invested $8 million in the Rothstein scheme through Banyon Income Fund.

Deans net loss was $7,604,939.67. In addition, on October 8, 2009, Dean invested $400,000 in

the Rothstein investment program through Razorback, and participated in D3 as a Guarantor of a

$5 million loan to Mercata Justa Partners, LLC to invest in the Rothstein scheme. Dean first

discovered the facts giving rise to his causes of action against Defendants no earlier than

September, 2012.

15. Plaintiff DAVID VON ALLMEN, as trustee of the DAVID VON ALLMEN

LIVING TRUST (David as Trustee), a revocable trust with its principal place of administration in

Saint Louis County, Missouri, invested $275,000.00 into the Ponzi scheme on or about August 26,

2009, through Banyon Income Fund (BIF), and lost $271,037.55. On or about October 2, 2009,

David as Trustee also invested in Rothstein through Razorback and lost $250,000.00. David as

Trustee first discovered the facts giving rise to his causes of action against Defendants no earlier

than September, 2012.

16. Plaintiff ANN VON ALLMEN, as trustee of the ANN VON ALLMEN LIVING

TRUST (Ann), a revocable trust with its principal place of administration in Saint Louis County,

Missouri, invested $275,000.00, on or about August 28, 2009 into the Ponzi scheme through

Banyon Income Fund, and lost $271,266.37. Ann first discovered the facts giving rise to her

causes of action against Defendants no earlier than September, 2012.

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17. Plaintiffs LAURA STRASSER (Dougs step-daughter and Lindas daughter) and

CARL STRASSER (the Strassers), are individuals who reside in St. Louis, Missouri. On

October 1, 2009 and on October 6, 2009, the Strassers invested $1 million in the Rothstein

scheme through Razorback each time, for a total of $2 million. The Strassers lost their entire

investment. The Strassers first discovered the facts giving rise to their causes of action against

Defendants no earlier than September, 2012.

18. Plaintiff DAVID VON ALLMEN (David) resides in Saint Louis County,

Missouri. In October 2009 David invested and lost $1 million in the Rothstein investment

scheme through D3 Capital Club, a single-purpose entity formed for the purpose of purchasing a

Rothstein confidential settlement. David first discovered the facts giving rise to his causes of

action against Defendants no earlier than September, 2012.

19. Plaintiff LINDA VON ALLMEN, as trustee of the VON ALLMEN DYNASTY

TRUST (Linda), an irrevocable trust with its principal place of administration in Broward

County, Florida, at all times relevant was a client of Bank of America. Relying on Bank of America

including Fred Perry to have honored their fiduciary duties to the Von Allmens, Linda as trustee

invested and lost the following sums:

Date Investment Net Loss Entity through which

Linda invested

May 5, 2009 $2,000,000.00 $1,877,135.84 Banyon Income Fund

October 1, 2009 $5,000,000.00 $5,000,000.00 Razorback1

1 Razorback Funding, LLC (Razorback) was formed to raise $32 million, which,

in turn, would be loaned to Banyon USVI to purchase Rothstein settlements. Banyon USVI was

a Banyon entity formed for the purpose of purchasing two Rothstein purported class action settlements, one with a face value of $26.1 million, the other of $40.6 million.

7

October 16, 2009 $890,000.00 $890,000.00 D3 Capital Club

2

Linda first discovered the facts giving rise to her causes of action against Defendants no earlier

than September, 2012.

20. Plaintiff DOUGLAS J. VON ALLMEN (Doug) is an individual who resides in

Broward County, Florida. Relying on Bank of America including Perry to have honored their

fiduciary duties to him and the Von Allmens, Doug invested through D&L Partners, LP. Doug first

discovered the facts giving rise to his causes of action against Defendants no earlier than

September, 2012.

21. Plaintiff D&L PARTNERS, LP, is a Missouri limited partnership with its principal

place of business in Broward County, Florida. The general partner is D&L Management Corp., a

Missouri corporation, of which Doug is the president. D&L Partners, acting through Doug, who in

turn relied upon Bank of America including Perry to honor their fiduciary duty to him, invested and

lost the following in the Rothstein scheme:

Date Investment Net Loss Entity through which

Doug invested

May 5, 2009 June 8, 2009 $45,000,000.00 $42,387,702.98 Banyon Income Fund

October 1, 2009 $13,000,000.00 $13,000,000.00 Razorback

October 16, 2009 $2,610,000.00 $2,610,000.00 D3 Capital Club

D&L PARTNERS, LP, first discovered the facts giving rise to its causes of action against

Defendants no earlier than September, 2012.

2 D3 Capital Club, LLC was formed to purchase a Rothstein settlement.

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22. Defendant BANK OF AMERICA, N.A. (Bank of America or the Bank) is a

national association with its principal place of business in Charlotte, North Carolina. Bank of

America has locations in Broward County, Florida and conducts business here. U.S. Trust is a

private wealth management platform and a division of Bank of America.

23. Defendant Bank of America Senior Vice President Frederick Perry resides in

Broward County, Florida, and at all relevant times was acting within the scope of his

employment with Bank of America.

24. Defendant Mark R. Maller during the relevant period was Bank of America

President of Broward County. Mark R. Maller resides in Broward County, Florida, and at all

relevant times was acting within the scope of his employment with Bank of America.

25. Defendant Bank of America Private Wealth Manager Brian Mormile resides in

Dade County, Florida, and at all relevant times was acting within the scope of his employment

with Bank of America.

26. Defendant Bank of America Southeast Regional President of Private Banking

Douglas DiVirgilio resides in Sarasota County, Florida, and at all relevant times was acting

within the scope of his employment with Bank of America.

27. This Court has jurisdiction over the claims as the amount in controversy exceeds

$15,000.

28. Venue is proper in Broward County as Bank of America conducts business here

and the underlying events alleged in the Complaint occurred here.

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III. BANK OF AMERICA, INCLUDING PERRY AND OTHERS, BREACHED FIDUCIARY DUTIES TO THE VON ALLMENS.

A. Bank of America owes and has owed fiduciary duties to the Von Allmens.

29. Bank of America, including Perry and the other Defendants, owe and have owed

fiduciary duties to the Von Allmens for eighteen years.

30. Bank of America and its Senior Vice President Fred Perry are and during the

relevant period were personal bankers and investment advisers to the Von Allmens.

31. Perry is Dougs personal banker at Bank of Americas U.S. Trust private banking

and wealth-management division. By 2009, Dougs relationship with Perry and the Bank had

spanned 14 years.

32. Perry was Dougs financial confidant. They talked regularly about Dougs

investments. Doug and I would talk fairly routinely about the different things he was investing

in. Deposition of Frederick Perry (Dec. 22, 2011) (Perry Dep.) at 14:25-15:10, Razorback v.

Rothstein and TD Bank, et al., Case No. CACE09062943 (Fla. 17th

Cir. Ct.).

33. Perry was Dougs advisor with respect to his and the other Von Allmens

investments.

34. Pursuant to Dougs advisor-client relationship with the Bank through Perry, Doug

made major investments with Bank of America.

35. In March 2008, for example, Doug emailed Perry about municipal bond funds.

Do[] your investment people know of any good open end mutual funds of muni bonds? Doug

asked. Are there muni ETFs? With the yields they are paying now it looks interesting, but I

would want t [sic] diversified basket. I could be interest in around $20 million.

10

36. Upon receiving Dougs email, Perry emailed his Bank of America investment

team, We finally have an opportunity with Doug Von Allmen on the investment side. They

discussed a custom portfolio for Doug, including various Bank of America / Columbia funds.

37. Doug, through D&L Partners, LP (D&L), invested substantial amounts in Bank

of America in 2008, in Bank of Americas Columbia Funds Series Trust Cash Reserves Capital

Class mutual fund.

38. In 2008 and 2009, Doug through D&L invested further substantial amounts in

Bank of America, in the Banks Columbia Municipal Reserves mutual fund.

39. In August 2009, Perry exchanged emails with Bank of America Senior Vice-

President Hugh Shannon, copying Bank of America Credit Risk Approval Executive Doug Bose;

Bank Credit Risk Manager Amanda Burton; Bank Vice President, Marine Divison, Lisa Verbit;

and Bank of America East Central Florida Market President Samuel Willett. In the emails the

Bank recognized its role as Dougs advisor and its fiduciary responsibility to protect Dougs

interests:

I think as financial advisors we need to be strongly advising him [Doug Von

Allmen] to keep a minimal level of liquidity to help protect him (not even taking

into account our credit risk).

(August 12, 2009 email exchange) (emphasis added).

40. Dougs substantial mutual fund investments with Bank of America in 2008 and

2009, as well as the above-quoted email exchange, illustrate the significant fiduciary role as

investment advisor that the Bank through Perry and others played for Doug. The Bank through

Perry consulted with Doug regularly and routinely regarding his investments and investment

plans and ideas.

11

41. As the Von Allmens personal banker and investment advisor, Perry knew that the

Von Allmens (particularly Doug and Dean) were always interested in new investment

opportunities, and that they made investments through various family entities, including Plaintiff

D&L Partners.

42. Perrys role in Doug and his familys financial and investment life was pervasive

enough that, as Perry gave Rothstein to understand, Perry was Dougs investment spokesperson

and financial confidant. If Perry said yes on an investment, Doug would invest; if Perry said

no, Doug would not invest.

43. Between 2006 and 2009, Perry and his Bank of America investment team held at

least twenty-six meetings concerning Dougs investments and his relationship with Bank of

America.

44. Bank of America through Perry and other Bank senior officers provided

investment management and advisory services to the other members of the Von Allmen family

as well as to Doug. The Bank regularly pitched them investment opportunities and provided

them with investment advice and strategies.

45. The Bank through Perry acknowledged that their fiduciary duties and obligations

as an investment advisor extended to Dougs children, who are also Plaintiffs:

Perry: We have provided investment management services to certain

family members.

Q: Who is that?

A: David Von Allmen, Julia and other Von Allmen children.

Perry depo at 13:17-21.

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46. Dougs stepson Dean first met Perry in 1998 through Doug. Dean opened his first

accounts with Bank of America in 1999, and made his first investments in 2007 through Perry.

47. As a result of the foregoing, the Bank including Perry assumed and owed to the

Von Allmens fiduciary duties of honesty, candor, and good faith, which included the obligation

to disclose material information regarding investment opportunities about which the Bank and

the Von Allmens communicated.

48. The fiduciary duties that Bank of America including Perry owed to the Von

Allmens also arose from and were confirmed in various Bank documents.

49. The website of Bank of Americas U.S. Trust division confirms that it has a

fiduciary relationship with its investor clients:

WELCOME TO U.S. TRUST. At U.S. Trust, we apply our intellectual

resources and financial acumen toward helping manage, preserve and

enhance you and your familys wealth. From wealth structuring to investment management, we believe youll find that our global perspective, unique team approach, fiduciary platform and more than 200

years of experience not only distinguish us from other private banks, they

provide for the kind of insights, solutions and expertise that have a worth

all their own.

U.S. Trust Home Page, www.ustrust.com/ust/pages/index.aspx (last visited Jan. 4, 2013)

(emphasis added).

50. The Von Allmens were clients of the Bank through its U.S. Trust division.

51. Bank of Americas U.S. Trust division website also states:

Your trust and investment management relationship is supported by the

strongest standard of integrity, trust and accountability: the fiduciary

standard. Our commitment is to serve your best interests and place them

ahead of our own. Of course, in doing so, we often seek to leverage the

vast capabilities of Bank of America, including calling upon our partners

and affiliates to assist us in providing you with the level of service you

13

have come to expect from us. And, we do this with transparency and

disclosure of conflicts.

U.S. Trust, About Us, www.ustrust.com/ust/pages/about-us.aspx (last visited Jan. 4, 2013)

(emphasis added).

52. The Bank of America / U.S. Trust division website further states:

You can expect a thoughtful, thorough approach delivered by your advisor

and a team of specialists assembled specifically for you who make your concerns their own. These professionals help ensure that your trust

and investment management relationship is supported by the strongest

standard of integrity and accountability: the fiduciary standard.

U.S. Trust, Our Capabilities, www.ustrust.com/ust/pages/capabilities.aspx (last visited Jan. 4,

2013) (emphasis added).

53. Finally, the Banks fiduciary duties to the Von Allmens also were rooted in the

trust and confidence that the Von Allmens reposed in the Bank and which the Bank accepted

regarding their investments discussed with the Bank.

54. Bank of America senior officers such as Perry received extensive internal training

and education to ensure that they understood the fiduciary duties that the Bank through Perry and

his fellow officers owed to clients such as the Von Allmens.

55. Senior Vice President John Abbuhl (Abbuhl), Perrys colleague in the Banks

U.S. Trust Fort Lauderdale office in the relevant period and a relationship manager at Bank of

America from 2007 to 2009, explained in a sworn statement that adhering to fiduciary

responsibilities was bank policy and part of his training and education at Bank of Americas U.S.

Trust division:

[I]n a fiduciary capacity . . . [if] you know more than someone else does . .

. and . . . the customer . . . does not have that knowledge . . . you have a

higher degree of responsibility to act ethically to disclose things.

14

Sworn Statement of John Abbuhl (Mar. 1, 2013) (Abbuhl Sworn Statement) at 23:18-23:24.

56. Based on the foregoing, when Doug told the Bank through Perry of his interest in

investing in the Rothstein settlement investment program in April 2009, the Bank, including

Perry and his colleagues, owed Doug and the Von Allmens fiduciary duties to disclose the

knowledge that they had and assessments they made regarding Rothstein and his investment

scheme.

B. When Doug discussed the Rothstein investment program with Bank of America in 2009, the Bank knew that it was scheme to defraud and should be

avoided.

i. The Rothstein Ponzi scheme.

57. When Scott Rothstein pled guilty in federal court in 2010, he admitted that he ran

a fraud scheme in which he falsely represented that his firm had multiple client-plaintiffs who

had reached confidential settlements of sexual harassment and whistleblower claims for large

sums of money that would be paid out over varying periods of time.

58. Rothstein misled investor-victims into believing that the settlement proceeds were

placed in pre-funded Rothstein trust accounts to be paid out over time to the settling RRA

client.

59. Rothstein claimed that the RRA client would agree to assign to an investor(s) the

clients rights to the full settlement amount in exchange for an immediate, discounted lump sum

payment.

60. In reality, there were no settlements. Rothstein fabricated them. There were few

real RRA clients and no settlement agreements. Returns to Rothstein-scheme investors were not

15

paid from the settlements as Rothstein had represented, but rather were paid with money

obtained from later investors. It was a classic Ponzi scheme.

ii. Bank of America knew that Rothsteins investment scheme was fraudulent in 2007.

61. When Doug told the Bank through Perry in April 2009 that he and his family

wanted to invest in the Rothstein settlement investment program, the Bank including Perry knew

and had known since 2007 that the program constituted a scheme to defraud and should be

avoided.

62. In 2007, John Abbuhl, a Bank of America/U.S. Trust Senior Vice-President and

Perrys colleague, had a client named George Levin.

63. Levin had been Abbuhls client since 2004 when Abbuhl worked for Wachovia

Bank. Abbuhl knew Levin as an early investor in PetMeds, an online pet pharmacy offering

medications and other health products for animals. At the time, Levin reported that he had a net

worth in excess of $100 million. Levin had an existing multi-million-dollar banking-client

relationship with Bank of America through his company, Auto Resolutions, LLC.

64. Around the time of Abbuhls transition from Wachovia to Bank of America in

2007, Levin told Abbuhl about an attorney friend who was involved in a sexual-harassment-

lawsuit-settlement investment business. Levin did not mention Rothstein by name.

65. In August 2007, another Levin company, Banyon 1030-32, LLC (Banyon),

approached Abbuhl about Bank of America providing credit financing that would enable Banyon

to invest in Rothsteins investment scheme. Banyon was a single-purpose investment fund

established to invest solely in Rothsteins settlement investment scheme.

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66. At that time in 2007, Bank of America and Rothstein were officed in the same

building in downtown Fort Lauderdale. Fred Perry and his colleagues at Bank of America knew

Rothstein.

67. Frank Preve (Preve) was the person handling day-to-day transactions for Levin

and his Banyon company in 2007.

68. On August 29, 2007, Preve emailed Abbuhl and asked if the Bank would consider

providing Banyon $6.5 million in credit financing collateralized by a $27 million Interest on

Trust Account (IOTA) that Rothsteins law firm had:

Hi John, We have an opportunity to do some financing for a Broward law firm . . .

it involves a IOTA trust account for $27,000,000. Does your department handle

such accounts? I am going to need a $6.5M loan with an assignment of proceeds

from the trust account. . . . Any interest??? Frank Preve.

69. The IOTA account was purportedly used to hold sexual-harassment settlement

proceeds for the benefit of investors in Rothsteins investment scheme. The IOTA account was

promoted by Rothstein as an essential element in the scheme.

70. In response to Preves August 29, 2007 e-mail about a line of credit to invest in

the Rothstein opportunity, Abbuhl responded on August 30, 2007 advising that Bank of America

was absolutely interested. Abbuhl wrote to Preve, Let me know what your schedule looks

like and we can discuss. Preve responded, [W]hy dont you stop by our offices . . . it shouldnt

take more than a few minutes to give you the gist of things. Preve concluded the e-mail, How

does BofA feel about signing NDAs???

71. By NDA Preve meant a non-disclosure agreement. Because Rothsteins lawsuit

settlement business was a Ponzi scheme, he did not want it scrutinized too closely. Thus

Rothstein made a show of being paranoid about the confidentiality issues surrounding the

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settlement-related investment transactions, in order to avoid having to disclose much information

or disclose it too widely.

72. On August 31, 2007, Bank of Americas Abbuhl accepted Preves invitation and

met with him met with him regarding the proposal.

73. Preve explained Rothsteins business to Abbuhl and showed him a spreadsheet

that reported very large account balances and very high rates of return on investments.

74. However, Abbuhl doubted that Bank of America would provide credit to Banyon

based on the IOTA account, given the unrestricted nature of the account as Preve had described

it. In addition, using law-firm IOTA accounts as Rothstein intended was obviously illegal.

Though the amounts at issue and rates of return were impressive, Abbuhl did not believe Bank of

America would agree to lend money to Levin using Rothsteins trust accounts as collateral.

75. The accounts, as described by Preve, were not true trust accounts, but depository

bank accounts. Lending money against a bank account required a hold restricting the removal

of money from the account. This was to ensure that the account retained the money serving as

security for the credit being extended to Banyon. Without that hold, an account could be

emptied at any time, wiping out the Banks security.

76. In addition, as stated, using an IOTA account as the Rothstein scheme was using

it was illegal. Illegal use of the Rothstein IOTA account that was later opened at TD Bank

formed a principal basis for the court in the aforementioned Razorback v. Rothstein and TD

Bank, et al., case to deny Gibraltar Banks motion to dismiss the plaintiffs claim for aiding and

abetting fraud in that case:

THE COURT: All right. You cannot, if you're a responsible lending

institution with even the most fundamental knowledge of banking laws,

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permit a law firm to take trust account money and put it in your own

operating account, and then in your own personal accounts, much less

suggest that that be done. And that's what you've alleged. And that's

aiding and abetting with knowledge of wrongful conduct but not the

specific wrongful conduct.

Hearing Tr., Razorback v. Rothstein and TD Bank, et al., p. 30 (November 18, 2010).

77. In spite of his initial concern, Abbuhl took Banyons lending request back to the

Bank. He had no discretion to deny it himself. Under Bank of America policy, all financing

opportunities no matter how unlikely to be approved had to be presented to the Bank so that

it could conduct due diligence and make an informed decision.

78. In September 2007, Preve tried to get Abbuhl comfortable with the credit request

by highlighting Levins personal commitment to the Rothstein settlement investments. Preve e-

mailed Abbuhl a rough cut cash flow chart for Levin for 2007 and 2008.

79. The Bank performed detailed due diligence on the Banyon credit requests in

September 2007. The Bank explored the legal aspects of Rothsteins settlement investment

business, and the Banks in-house lawyer reviewed Banyons credit application.

80. On September 6, 2007, Abbuhl advised Preve that Bank of America had concerns

and needed to conduct further due diligence into Rothsteins business model:

I had a lengthy call with the head of the lending for the southeast and the head of

risk management for Private Banking for BofA. They are trying to get their arms

around this concept. Before they commit (yes or no) they want to explore the

legal aspects of this.

81. As stated, Bank of Americas due diligence included having Banyons credit

application reviewed by an in-house lawyer for the Bank: I overnighted copies of the

documentation you sent to me to Charlotte for them to review in the morning. Because this is an

19

unusual type of lending request, they also are going to discuss this with our internal legal

advisor.

82. Abbuhl also reviewed an exemplar Rothstein settlement (names redacted), the

cornerstone of the Rothstein investment scheme.

83. Bank of Americas due diligence ultimately revealed that Rothsteins investment

scheme raised was likely a fraud and certainly illegal.

84. Abbuhl told Preve that the very high returns shown on the spreadsheets regarding

the Rothstein investments seem too good to be true. (Abbuhl Sworn Stmt at 58)

85. The Rothstein investments couldn't get past the sniff test, Abbuhl stated.

(Abbuhl Sworn Stmt at 67)

86. Bank of America denied the Banyon credit application following its due diligence

assessment.

87. From 2007 on, the Bank believed that Rothstein was running a fraud. As Perry

later confirmed, it was never believed to be if but rather when he would be caught doing

something illegal. (Perry email to Bank colleagues, Nov. 15, 2009) (emphasis added).

Rothstein was dirty (Perry depo at 33:7), a crook (Abbuhl Sworn Stmt at 80:10 [quoting

Perry]), a bad guy (Abbuhl Sworn Stmt at 91) and of dubious provenance (Perry Nov. 15,

2009 email). Rothsteins law firm, RRA, was a known bad entity (Abbuhl Sworn Stmt at

102:1-8 [quoting Bank Sr. Vice President Charles Pulselli]), Rothsteins scheme offered returns

that were too good to be true (Abbuhl Sworn Stmt at 58:15-16) and couldnt get past the sniff

test (Abbuhl Sworn Stmt at 67:15), the Bank didnt believe the returns (Perry depo at 36:8-9),

20

and Perry told his colleagues, Stay away from these guys (Rothstein and his associates) (Perry

Dec. 10, 2008 email to Abbuhl, and others).

iii. The Banks denial of the 2007 Banyon credit request because of Rothstein was logged in the Banks internal pipeline report and became Bank institutional knowledge.

88. When a lending request is made to Bank of America, it is as a matter of bank

procedure logged into a weekly internal pipeline report.

89. The Banyon request for credit to invest with Rothstein was logged into the

pipeline report, as was the Banks denial of the request.

90. The pipeline report thereafter was available to all relevant Bank personnel,

including Perry.

91. Consequently, Bank of Americas decision to decline the Banyon opportunity in

2007, based on the Rothstein investment schemes failure of the sniff test, the too good to be

true verdict, as well as other indicia of fraud, became institutional knowledge at the Bank / U.S.

Trust.

iv. In 2008, Bank of America confirmed that Rothsteins scheme was fraudulent.

92. In December 2008, the Bank did further due diligence on the Rothstein settlement

investment scheme and confirmed that the scheme was fraudulent.

93. In October 2008, George Levin approached the Banks Abbuhl again, this time

for a personal loan to buy a Gulfstream G550 business jet. Levin planned to buy the jet and

flip it for a $5 million profit. He had a buyer and felt the transaction was all but certain.

21

94. Levin intended to rely on the financial health of his Banyon investments, which

were fully invested in the Rothstein scheme, for collateral to support the loan application. Thus

in 2008 as in 2007, the Rothstein settlement investment scheme was scrutinized by the Bank.

95. By then, there were a number of Banyon funds purchasing Rothstein

settlements. Because Levin was relying on his interests in Banyon to support the loan, Bank of

America conducted due diligence on both Levins and Banyons financials.

96. Bank of America obtained a variety of financial statements and tax forms from

Levin and the Banyon funds relating to their investments in Rothsteins scheme.

97. On November 18, 2008, Banyons Preve provided financial documents to Tim

Wakeland (Wakeland), Senior Vice President and Aircraft Sales Executive with Bank of

America Leasing and Corporate Aircraft Financing, including:

Levins Personal Financial Statement dated October 31, 2008, which included Levins historic cash flow numbers and biography;

CPA statements dated June 30, 2008 for the Banyon entities;

October 31, 2008 interim statements for the Banyon entities;

Copies of trust account balances as of October 29, 2008, which accounts secured the Banyon receivables;

Levins tax planning schedule and K-1s;

Levins tax filings for all IRS Schedule C and E entities (the Banyon entities were Schedule C entities); and

Know Your Customer data. Know Your Customer (KYC) is a program to prevent banks from being used, intentionally or unintentionally, for money-

laundering activities.

98. In an e-mail to Abbuhl, Wakeland expressed concern over an unexplained delay

by Banyons Preve in providing the last three years of Levins personal tax returns: The delays

22

[sic] on the tax returns are causing some heartburn. By the end of November, 2008, Preve

provided (or agreed to provide) Matthew Geremia (Geremia), Credit Products Officer with

Bank of America Leasing, additional information the Bank needed to process Levins

application, including:

Levins prior three years personal tax returns;

A copy of Banyons corporate structure and ownership;

Organization documents for Banyon 1030-32;

Banyons audited financial statements;

Bank/brokerage statements demonstrating Levins liquidity;

An explanation of Banyons contingent liabilities;

A description of Levins major holdings and future business plans;

An explanation of Levins non-Banyon related cash flow;

An explanation of Levins annual commitments and contributions;

An explanation of the nature of the settlement escrows;

Whether Banyon expected any industry or legal challenges in the near future; and

Levins growth projections for Banyon.

99. On December 10, 2008, Banyons Preve also sent an e-mail to Bank of Americas

Geremia enclosing a typical [Rothstein/RRA sexual harassment claim] settlement package,

October bank deposit verifications from Banyons third-party verifier, maturity schedules, and a

master summary of each schedule.

100. Also on December 10, Bank of Americas Wakeland sent an e-mail to a number

of Bank executives, including Perry and his superior, Mark R. Maller (Maller), Bank of

23

America Southeast Florida Managing Director and U.S. Trust Division President for Broward

County, in connection with Levins application, asking, Is anyone familiar with the law firm

Rothstein[] Rosenfeldt?

101. Perry responded unequivocally:

102. Maller added in an e-mail later the same day, I am very familiar.

103. Maller sent another e-mail to Perry and Abbuhl instructing them not to create an

e-mail paper trail regarding any discussion of Rothstein: Please discuss face to face rather than

via email on this. Bank of America officials did not want to put their views about Rothstein in

writing.

104. Shortly thereafter, Perry told his superior, Maller, in words or substance, I dont

think you can do that loan [to Levin] because this guy [Levin] is doing business with Scott

Rothstein. (Abbuhl Sworn Stmt at 90) (emphasis added)

105. Perry had always distrusted Rothstein. He told Abbuhl that Rothstein was a bad

guy. (Abbuhl Sworn Stmt at 91)

106. Charles Pulselli, Senior Vice President and Senior Credit Products Manager with

Bank of America Leasing and Corporate Aircraft Finance, scheduled a conference call for

24

December 15, 2008 to discuss Levins aircraft loan application. Two items were on the agenda:

1) reputation risk; and 2) need to discuss BOAs global view in developing and expanding

relationship:

107. Reputation risk meant the risk of damage to the Banks reputation if the Bank

went through with the transaction. (Abbuhl Sworn Stmt. at 98)

108. The December 15, 2008 call included bank executives Maller, Abbuhl, Matt

Jeremiah, Tim Wakeland, Brian Joyner, and probably Mike Bonner. At the end of the call, the

decision was made to deny the loan. The decision was based on a concern that Bank of

Americas reputation could be damaged by being associated even indirectly with Rothstein and

his investment scheme.

109. The next day, December 16, 2008, Wakeland e-mailed Levin advising him that

the Bank denied his jet loan.

110. The Bank denied Levins $30 million loan application even though Levins loan

would have brought new, much-needed business to Bank of America during the global economic

crisis. Banyons financials on their face justified the loan. The only explanation for the denial

was Bank reputation risk and the Banks obvious conclusion that the financials were not as

represented, i.e., fraudulent.

25

111. During this period, Maller was pressuring Perry, Abbuhl, and their colleagues to

get more business, and had been since at least since August 2008. In August 2008, before Levin

had applied for the loan, Perry and Abbuhls superior, Maller, had sent an e-mail to his team,

including Abbuhl and Perry, pushing them to get more business:

112. As he had become involved in the discussion over Rothstein in connection with

the Levin loan application, Perry knew that the loan was turned down due to Bank reputation risk

and Banks assessment that Rothstein and his scheme were fraudulent.

113. Like the 2007 Banyon financing opportunity, the 2008 Levin jet loan application

was logged into Bank of Americas internal pipeline report and became part of Bank of America

/ U.S. Trust institutional knowledge.

C. In 2009 the Bank actively concealed its knowledge of Rothsteins fraud and maneuvered the Von Allmens into investing with Rothstein in order to win

Rothsteins favor, get a billion dollars in depository business from Rothstein, and ultimately replace TD Bank as the Rothstein schemes principal banker.

i. What Bank of America knew in 2009.

26

114. By 2009, Bank of America / U.S. Trust had had a long-standing commitment to

the Von Allmens to adhere to the strongest standard of integrity, trust and accountability: the

fiduciary standard, and to serve your best interests and place them ahead of our own.

115. As Bank of Americas then Senior Vice-President John Abbuhl said in his sworn

statement, there was a higher standard of duty and responsibility towards the customers of the

U.S. Trust Division [of Bank of America], and a duty of making sure the customers were not

taking unnecessary financial risks. (Abbuhl Sworn Stmt. at 27)

116. The Banks U.S. Trust division had a higher degree of responsibility to act

ethically to disclose things to its clients such as the Von Allmens. (Abbuhl Sworn Stmt at 23-

24)

117. Perry confirmed in 2009 that the Bank, including Perry himself, had a fiduciary

duty from and after 2007 to warn its clients to stay away from Rothstein. In accordance with that

duty, Perry stated that he warned clients often between 2007 and 2009 to stay away from

Rothstein and his investment scheme. Shortly after the Ponzi scheme imploded, Perry wrote:

On numerous occasions we have made our suspicions known to clients

interested in doing business with him [Rothstein] or his firm [RRA].

(emphasis added).

118. But Perry never made his suspicions (conclusions, actually) known to the Von

Allmens. The Bank including Perry never warned the Von Allmens of what they knew about

Rothstein or his firm.

119. In April 2009 or earlier, when Doug told Perry, his long-time Bank of America /

U.S. Trust personal banker and investment advisor, of his interest in investing in Rothsteins

settlement investment scheme, Perry and the Bank, instead of warning Doug, told him nothing.

27

120. At no point did Perry or any other officer of Bank of America warn Doug or any

of the Plaintiffs that the Bank, including Perry, had a concern about Rothstein or that the

investment that Plaintiffs contemplated making with Rothstein was fraudulent or suspicious.

121. The Bank was free to warn the Von Allmens of what it knew about Rothstein

scheme. Neither Rothstein nor his firm was a client of the Bank.

122. Because the Bank owed fiduciary duties to the Von Allmens, the Bank including

Perry had a duty to warn the Von Allmens of what it knew regarding investing in the Rothstein

scheme (through Banyon).

123. But when Doug told Perry about his desire to invest millions in the Rothstein

investment program (through Banyon), Perry and the Bank actively concealed their damning

assessment of Rothstein, and instead helped Banyon and Rothstein discreetly maneuver Doug

and his family into investing in the Rothstein scheme.

124. The Banks purpose in helping to maneuver the Von Allmens to invest with

Rothstein was to infuse the Rothstein Ponzi scheme with millions of Von Allmen dollars to keep

the scheme going, so that Bank of America could attract large Rothstein bank deposits and,

ultimately, replace TD Bank as the Rothstein Ponzi schemes principal banker.

ii. Bank of Americas active, deliberate concealment in 2009 of its knowledge of Rothsteins fraud.

125. Doug first learned about the Banyon Income Fund from Barry Bekkedam

(Bekkedam) in March of 2009.

126. Bekkedam, a Banyon promoter, came to South Florida from Pennsylvania to meet

with Doug to discuss a possible investment in the Rothstein sexual-harassment and

28

whistleblower settlement investment program through Banyon. As stated, Banyon was solely

invested in Rothsteins program.

127. Bekkedam was the principal of Ballamor Capital Investment (Ballamor), a

Pennsylvania-based registered investment advisory firm. Bekkedam had contact with Perry

because they both were involved, along with Doug, with the Broward County Boys and Girls

Club. Perry and Doug were on the Clubs board of directors.

128. On April 21, 2009, Bekkedam sent Doug an e-mail answering questions about

Banyon Income Fund:

Doug: Good morning. Attached are some answers to your questions. The

PPM should be completed shortly. My people in NYC [are] with

Banyons people working on it today. If you need me to brief the bank [Bank of America] in anticipation of the PPM I am very used to that

process. Thanks Barry.

129. Doug forwarded Bekkedams e-mail to Perry, who in turn forwarded it to several

of his Bank of America colleagues. Attached to the forwarded Bekkedam e-mail was a

spreadsheet entitled Von Allmen Questions Spreadsheet.

130. The Bank including Perry concluded that Bekkedam and his Firm, Ballamor, were

frauds. He told colleagues after the Rothstein Ponzis collapse that Bekkedam was a POS

(piece of shit), and that Balamor capital will go down.

131. However, the Bank including Perry never disclosed any of this to the Von

Allmens in April or May 2009 before they invested in the Rothstein scheme.

132. Instead, the Bank saw an opportunity. Perry had knowledge that Banyon had

placed billions of dollars with Rothstein. Banyons financials showed $1.9 billion flowing

29

through the Banyon accounts and into the Rothstein scheme. Bank of America, including Perry,

wanted that money to be deposited at Bank of America.

133. The Bank, including Perry, devised a plan: Help maneuver the Von Allmens into

investing in the Rothstein scheme by carefully concealing the Banks knowledge of Rothsteins

fraud, tell Rothstein about Dougs investment in the scheme, take credit for it, and use it as a

springboard to get Rothstein to deposit Rothstein scheme proceeds at Bank of America.

134. Perry started by telling Rothstein before April 21 that the Bank was going to get

Von Allmen to invest in the Rothstein scheme.

135. Perry then confirmed with Rothstein and Bekkedam that he (Perry) was Dougs

financial spokesman and advisor. Perry played up his spokesman role in part by obtaining and

reviewing Ballamors materials regarding Banyon and the Rothstein investment program,

purportedly for Doug.

136. Perry assured Ballamors managing director and general counsel, Larry Rovin

(Rovin), that Perry would treat the information that he received from Bekkedam and Ballamor

as strictly confidential. That is, Perry would treat as confidential the information that helped

confirm his and the Banks negative impression of Bekkedam, Ballamor, and Rothstein.

137. In other words, the Bank through Perry made a deal with Ballamor to conceal

from the Von Allmens and others the Banks negative conclusions about the Rothstein scheme.

(Perry Deposition Errata Sheets at 51:12; addressed in more detail below).

138. Perry knew about Banyons relationship with Rothstein from Bank of

Americas denial of a line of credit to Banyon in 2007 and from the Banks 2008 refusal to make

an aircraft loan to Levin.

30

139. After a conversation with Ballamors Rovin, Perry received a letter to sign

confirming that he was Dougs investment advisor:

140. Perry also received an advance draft of the Banyon Income Fund Confidential

Offering Memorandum dated April 30, 2009 (Banyon COM or PPM), which was provided

to potential investors and discussed the Rothstein investment opportunity.

141. Perry e-mailed Ballamors Rovin on May 4, 2009, I received the PPM today

and am in the process of reviewing it with legal counsel. Rovin passed Perrys email on to

Rothstein a half-hour later, and Rothstein okayed the review by the Bank and Bank counsel

within a half-hour after that.

31

142. The Bank through Perry made sure Rothstein was informed of his receipt of the

PPM and NDA, reinforcing Rothsteins understanding that the Bank through Perry was Von

Allmens spokesman/advisor.

143. As portrayed to Rothstein, the Banks advisory role through Perry with respect to

Dougs investing in Rothsteins investment scheme was pivotal. As stated, with respect to the

Rothstein scheme, Perry indicated to Rothstein that if Perry said yes, Doug would invest, and

that if Perry said no, Doug would not invest.

144. Doug disclosed the details of the Rothstein investment opportunity with members

of his family, including his wife Linda, his son and daughter-in-law, David and Ann Von

Allmen, his stepson, Dean Kretschmar, and his stepdaughter and her husband, Laura and Carl

Strasser.

145. Doug informed the Bank through Perry of his desire to invest tens of millions in

the Rothstein settlements (through Banyon).

146. Rothstein emailed Banyons Preve and Levin on May 2, 2009 that he needed to

get[] Dougs money in right away .... Banyons Preve responded, I dont think we can get

this by [Von] Allm[e]n without Perrys approval.

147. Perry e-mailed Doug on May 4, 2009, and told him that the Banyon documents he

had received would be subject to a three-tier review: I would like to have banks outside counsel

review the documents simultaneously to my review and my credit teams. (emphasis added)

148. The Bank including Perry purposely concealed from Doug that the Bank had

already concluded in 2007 that Rothstein and his scheme were fraudulent and had confirmed that

assessment in 2008.

32

149. The Banks three-tier due diligence review in May 2009 reaffirmed the Banks

damning assessment of Rothsteins scheme that the Bank had previously made.

150. Perry informed Bank of America colleague John Abbuhl of the Von Allmens

intention to invest in the Rothstein investments in May 2009.

151. Abbuhl was surprised that Perry would go along with Dougs desire to invest in

the Rothstein scheme and conceal what the Bank knew about the scheme, particularly when, a

few months earlier, Perry had torpedoed the aircraft loan to Levin because Levin was invested

with Rothstein.

152. The long-standing fiduciary duties owed to the Von Allmens by the Bank

through Perry did not slip Perrys mind when Doug approached Perry about investing in the

Rothstein settlement investments. Abbuhl made sure of that.

153. When Abbuhl learned of Dougs intentions to invest with Rothstein, Abbuhl

reminded Perry of Bank of Americas fiduciary duties to Doug, which compelled Perry and the

Bank to disclose what he knew before Doug invested. Abbuhl reminded Perry of his and the

Banks responsibility to disclose to the Von Allmens information material to their investment,

and that the Bank had recently rejected a credit-business opportunity because of its assessment of

Rothstein and his investment scheme.

154. On March 1, 2013, Abbuhl provided a sworn statement in which he confirmed the

details of his conversation with Perry:

Q. Did you say anything to Fred Perry about what he should say, if

anything to Von Allmen about what happened?

A. I did. I said, Fred does Mr. Von Allmen know that we declined a loan

four months ago because we couldnt get comfortable with RRA and Scott Rothstein?

33

Q. What did Fred say in response to that?

A. No. And I said, you have a fiduciary responsibility to disclose that to

your client. He needs to know that because thats a decision point and he needs to know about that.

Q. What did Fred say in response?

A. He shrugged it off. He didnt say anything that I remember.

Q. Youre absolutely sure that you told Fred that he had a fiduciary duty to disclose that to Doug Von Allmen?

A. I absolutely told him that.

...

Q. How many times did you talk to Mark Maller [Perry and Abbuhls superior] in person about it?

A. Multiple times. I dont know a specific number, but multiple times.

Q. What did Mark Maller say in response?

A. He said he would talk to Fred. I dont know that he ever did.

(Abbuhl Sworn Stmt at 111-114) (emphasis added).

155. Perry did not forget his and the Banks fiduciary obligations to the Von Allmens.

The Bank, including Perry, his superior, Mark Maller, and other Bank officers, just decided to

ignore them. Perry decided to conceal the truth from the Von Allmens, lie to Abbuhl, and

discreetly maneuver the Von Allmens into investing over $85 million in the Rothstein scheme.

Perry said to Abbuhl, I was wrong about Scott. I was wrong about RRA...Weve [Perry and the

Bank] done a full background on Scott and hes super clean, squeaky clean. (Abbuhl Sworn

Stmt at 111)

156. There was no background check done on Rothstein showing he was clean. Perry

lied. Perry conceded in writing after the Ponzi collapse that he and the Bank always knew that

34

Rothstein was dirty. But Perry did not want to admit that to Abbuhl, his fellow Senior Vice-

President, in April/May 2009. Perry did not want to have to try to convince Abbuhl that even if

the Bank believed that Rothstein was a fraud the Bank had no obligation to warn Doug of that

fact. Perrys solution was simply to lie to Abbuhl and tell him that Rothstein was clean.

157. In his December 22, 2011, deposition in Razorback v. TD Bank, another

Rothstein-related lawsuit, Perry told a different lie than the one he told Abbuhl. In Perrys

deposition, instead of lying that Rothstein was squeaky clean, he falsely testified that he

thought he warned Doug about Rothsteins scheme:

Q. You did convey [to Doug] that you didnt understand [the Rothstein settlement investment scheme]?

A. I think so.

Perry dep at 83:16-17.

158. But later in his deposition, Perry backtracked to cover himself and the Bank,

testifying that although he thinks he conveyed his misgivings about Rothstein to Doug, the

bottom line was that Doug knew more about the Rothstein investment opportunity than Perry

did, so it was not Perrys or the Banks place to warn Doug away from Rothstein. (In other

words, just in case my false testimony that I warned Doug about Rothstein does not carry the

day, let me hedge by adding that the Bank and I never had an obligation to warn him). Perry dep

at 83:19-84:3.

159. The Bank knew that Rothsteins scheme was a fraud. The Bank had a fiduciary

duty to apprise Doug of that. Instead the Bank actively concealed it from the Von Allmens.

160. Perry also lied in his deposition when he testified that in April/May 2009 the

Bank hasn't done any of this homework [on the Rothstein/Banyon investment] and isnt

35

interested in doing any of this homework, its not in [the Banks] realm to do so ...." The Bank

did detailed due diligence homework on Rothstein in August 2007, December 2008, and April-

May 2009, judged Rothstein and his investment scheme crooked (fraudulent), and concluded that

the Banks clients should stay away from him and his scheme. (On numerous occasions we

have made our suspicions known to clients interested in doing business with him or his firm

(Perry November 15, 2009 email).) The Bank actively concealed from Doug the homework that

it did on the Rothstein investments, however, and took steps to make Doug believe that the Bank

had no problem with Rothstein or his settlement investment program.

161. While Perry was advising Doug before Dougs initial investment in Rothsteins

scheme in May 2009, Perry said to Bank Senior Vice-President Abbuhl:

[T]hese guys [Rothstein and RRA] arent so bad after all. I'm actually going to be doing something with them, with RRA with one of my clients,

Mr. Von Allmen.

Abbuhl Sworn Stmt at 110. The not so bad after all assertion was another lie. The Bank

learned nothing in April-May 2009 that contradicted its longstanding assessment that Rothstein

was a fraud. Rothstein and his firm were as bad as they had ever been in May 2009.

162. Bank of America including Perry wanted Rothstein to deposit his Ponzi billions in

the Bank and wanted to become the schemes banker, and saw an opportunity to do so on the

backs of the Von Allmens. So they actively concealed material facts from Doug, and Perry lied

to Abbuhl to back him off.

iii. Disappearance of the desk file

36

163. Perry and Abbuhls department maintained a desk file that contained the full

financials of Levin and copies of emails regarding the 2008 proposed jet aircraft loan that had

been rejected because of Levins association with Rothstein.

164. The desk file contained a conclusively negative assessment of Rothstein and his

scheme.

165. From the time that Abbuhl started working at the Bank up to May 2009, no desk

file had ever turned up missing. The Bank normally retained such files for years. However, the

aforementioned desk file inexplicably turned up missing in May 2009.

166. Perry asked Abbuhl for the desk file in May 2009. When Abbuhl went to get it,

however, it was gone. It had disappeared. It was never found.

167. It was in Perry, Maller, and the Banks interest to have the desk file disappear,

because it contained a negative assessment of Rothstein, with whom the Bank now wanted to do

business.

168. Abbuhl of course did not want the desk file to disappear. It appears that before

asking for the desk file, Perry may have destroyed or hidden it. Then Perry asked Abbuhl for it.

This way the blame for the desk files loss would not fall as readily on Perry.

169. The Banks possible goal was to remove a file that could be cited later as

containing information that should have been shared with the Von Allmens before they invested

in the Rothstein scheme.

170. Even without the desk file, the Bank still had in digital form the basic information

about Rothstein and Banyon that the Bank had obtained in 2008. Perry emailed that information

to a colleague on May 8, 2009.

37

iv. Because of Bank of Americas active concealment of its knowledge of the Rothstein fraud, the Von Allmens invested $22 million in the scheme

between May 5 and 8, 2009.

171. Perry reported no problems with the Rothstein investment scheme after the

Banks three-tier review of the scheme, either in Perrys communications with Doug in May

2009 or any time thereafter.

172. On May 5, 2009, based on the Banyon COM and representations by

Ballamor/Bekkedam, based on Dougs understanding that Bank of America would comply with

its fiduciary duties, based on the Banks statements and omissions to Doug through Perry, and

because of the Banks active concealment of its knowledge that the Rothstein scheme was

fraudulent, the Von Allmens decided in early May 2009 to invest in the Rothstein settlements.

173. On May 5, 2009, D&L Partners, LP invested $15,000,000 in Rothstein through

Banyon Income Fund.

174. On May 5, 2009, Linda Von Allmen as trustee of the Von Allmen Dynasty Trust

invested $2,000,000 through Banyon Income Fund.

175. On May 8, 2009, D&L Partners, LP invested $5,000,000 in Rothstein through

Banyon Income Fund.

176. The Von Allmens initial investments in the Rothstein investment scheme in

early May 2009 saved the Ponzi scheme from collapsing and gave it a new lease on life which

helped keep it going through October 2009.

177. The Von Allmens continued to invest until October 2009.

v. Abbuhls insistence that Bank of America disclose its knowledge of the Rothstein scheme destroyed his Bank of America career.

38

178. After Dougs initial investments in the Rothstein scheme, Abbuhl paid the price

for his insistence that Bank of America honor its fiduciary duties to the Von Allmens.

179. Abbuhl saw the handwriting on the wall when Douglas DiVirgilio, Bank of

America Southeast Regional President of Private Banking, called out Abbuhl in a June 2009

Bank of America leadership meeting. In front of many others, DiVirgilio accused Abbuhl of

being a "squeaky wheel" in the Banks U.S. Trust division -- i.e., a disloyal whistleblower.

180. The Bank branded Abbuhl an outcast, and finally pressured him to quit in July

2009.

vi. Bank of America deliberately concealed its knowledge about

Rothstein from Dougs stepson Dean Kretschmar before Dean invested $8 million in Rothsteins scheme via Banyon.

181. By 2009, Dougs stepson Dean Kretschmar (Dean) had accounts at Bank of

America for ten years.

182. Bank of America through its U.S. Trust division and Fred Perry also provided

investment advice to Dean.

183. Dean made his first investments through Perry and U.S. Trust in 2007. As part

of Deans first investment, he invested $6 million and lost $2.5 million in high-risk stocks

recommended by Bank of America / U.S. Trust.

184. Dean also discussed with Perry a potential investment in the bottled-water

industry. Bank of America through provided Dean advice and provided him research on the

subject.

39

185. In or around May 2009, Dean met with Perry at YOLO, a Fort Lauderdale

restaurant, during which they, like Perry and Doug before that, discussed investing in Rothstein

(through Banyon).

186. As with Doug, the Bank through Perry actively concealed from Dean the Banks

assessment that Rothstein and his investment scheme were frauds, and concealed the Banks

detailed due diligence analysis underlying that assessment. In discussing the Rothstein

investment, the Bank through Perry only advised Dean that he not put all his eggs in one

basket. Vanilla investment advice. Perry said nothing about the Rothstein fraud.

187. Thus Bank of America, through Perry, successfully influenced Dean to invest

with Rothstein.

188. On or about June 3, 2009, Dean, principally as a result of his discussions with

Perry, invested $8 million in Rothsteins scheme (through Banyon).

189. On August 26, 2009, Perry took the trouble to fly to New York to have a lunch

meeting with Dean and Doug in New York which included confidential discussions regarding

Rothstein and Banyon and plans to invest additional amounts in the Rothstein investment

scheme. Again the Bank, through Perry, purposely concealed from Dean and Doug the Banks

knowledge that Rothstein was operating a fraud. As a result, Dean thereafter invested an

addition $5.4 million in the Rothstein scheme, and all told the Von Allmens invested an

additional $30 million.

190. Perry played dumb in his deposition regarding the New York lunch meeting, and

falsely testified that he was essentially mum in the meeting:

Q. Do you recall being involved in a lunch meeting with [Doug] Von Allmen

in New York . . . in August of 2009 when [Banyon Income Fund] was discussed?

40

A [Perry] I recall a lunch meeting in New York with Von Allmen.

. . . .

Q. When you had lunch with Von Allmen in New York did you meet other

individuals at the same time who were going to be involved with him in these

Rothstein investments?

A. Yes . . . a gentleman joined our table, and I was introduced to him, and

yes, I had an understanding that he was related to the Banyon Funds.

. . . .

Q. Was [Dean] Kretschmar there?

A. Yes.

. . . .

Q. Do you recall any . . . conversation with [Dean] Kretschmar and Von

Allmen about the structure [of Banyon Income Fund]?

A. I think there were conversations that related to the investment from time to

time, and parts of it were described to me.

Perry Dep. pp. 66-74.

191. Perry also had arranged to have Doug meet Bank of Americas hedge fund

experts in New York, for the purpose of constructing a hedge fund portfolio for Doug to invest

in.

192. Dean, like Doug, lost his entire investment in Rothstein.

vii. Bank of America concealed its knowledge of Rothsteins fraud from David Von Allmen.

193. David was a Bank of America / U.S. Trust customer to whom the Bank owed

fiduciary duties.

41

194. Bank of America through Perry also actively concealed the Banks knowledge of

Rothsteins fraud from Dougs son, David, who likewise invested in the Rothstein scheme

through Banyon. David learned about Banyon and Rothstein from his father and Bekkedam in

early 2009.

195. On August 26, 2009, David Von Allmen as trustee of the David Von Allmen Living

Trust invested $275,000.00 into the Rothstein Ponzi scheme through Banyon Income Fund. On

August 28, 2009, Ann Von Allmen as trustee of the Ann Von Allmen Living Trust invested

$275,000.00 into the Rothstein Ponzi scheme through Banyon Income Fund.

196. On October 2, 2009, David Von Allmen as trustee of the David Von Allmen Living

Trust invested another $250,000.00 in Razorback.

197. On October 20, 2009, David invested $1 million more in Rothstein, through D3

Capital Club, a single-purpose entity formed for the purpose of purchasing a Rothstein settlement

investment.

198. David lost all the money he invested.

199. The Bank of Americas goal in maneuvering David and Ann into investing with

Rothstein, as with the Von Allmens generally, was to keep the Rothstein scheme going and

ultimately to take over as the Rothstein fraud schemes principal banker.

200. In response to David sending over wiring instructions for his $1 million investment

in October 2009, Perry was sufficiently excited to be able to further the Banks joint agenda with

Rothstein that he half-jokingly offered to David to ride down the private elevator that Perry and

Rothstein shared and deliver Davids check to Rothstein personally:

If worse came to worse, I could ride elevator down to the 16th

floor and

hand deliver the [$1 million] check. :-) [smiley face]

42

201. Perrys communications with Doug in 2009 about Rothstein / Banyon were

intended for the Von Allmens generally. Perry knew that Doug was promoting to his family that

investing in Rothstein (through Banyon) was a good investment.

202. In reliance the active concealment by the Bank through Perry of the

condemnatory information they had about Rothstein, all of the Von Allmens including David

invested in the Rothstein investment program through Banyon in 2009.

203. Laura & Carl Strasser. Doug Von Allmen and Dean Kretschmar promoted

Rothsteins settlements to Dougs stepdaughter and Deans sister, Laura Strasser, and her

husband, Carl, in May 2009. Relying on discussions with Perry in which nothing was mentioned

to raise any doubt as to the bona fides of the Rothstein investment scheme, Dean and Doug told

the Strassers about the Rothstein investment. On October 1, 2009 and on October 6, 2009, the

Strassers invested $1 million in Rothstein through Razorback, i.e., $2 million total. The

Strassers lost their entire investment.

viii. As a result of Bank of Americas active concealment of its knowledge of Rothsteins fraud, the Von Allmens invested $85.7 million in the

Rothstein scheme, losing virtually all of it.

204. All told, the Von Allmens invested $85.7 million in the Rothstein investment

program in reliance on the Banks due diligence and on the Banks compliance with its long-

standing fiduciaries duties to disclose any material information it had about Rothstein and his

scheme. They lost $82,565,816.04, as follows:

43

DATE OF

INVESTMENT

PLAINTIFF INVESTMENT

VEHICLE

AMOUNTS

INVESTED

NET LOSS

May 5, 2009 Linda Von

Allmen, as trustee

of the Von Allmen

Dynasty Trust

Banyon Income Fund $2,000,000 $1,877,135.84

May 5, 2009 D&L Partners, LP Banyon Income Fund $15,000,000

May 8, 2009 D&L Partners, LP Banyon Income Fund $5,000,000

May 14, 2009 D&L Partners, LP Banyon Income Fund $20,000,000

June 8, 2009 D&L Partners, LP Banyon Income Fund $5,000,000

May 5-June 8, 2009 D & L Partners,

LP

Banyon Income Fund $45,000,000 $42,387,702.98

June 3, 2009 Dean Kretschmar Banyon Income Fund $8,000,000 $7,604,939.67

Aug. 26, 2009 David Von

Allmen, as trustee

of the David Von

Allmen Living

Trust

Banyon Income Fund $275,000 $271,037.55

Aug. 28, 2009 Ann Von Allmen,

as trustee of the

Ann Von Allmen

Living Trust

Banyon Income Fund $275,000 $271,266.37

Oct. 1, 2009 D&L Partners, LP Razorback $13,000,000 $13,000,000

Oct. 1, 2009 Linda Von

Allmen, as trustee

of the Von Allmen

Dynasty Trust

Razorback $5,000,000 $5,000,000

Oct. 1, 2009 Laura and Carl

Strasser

Razorback $1,000,000 $1,000,000

Oct. 2, 2009 David Von

Allmen, as trustee

of the David Von

Allmen Living

Trust

Razorback $250,000 $250,000

Oct. 8, 2009 Dean Kretschmar Razorback $400,000 $400,000

Oct. 8, 2009 Dean Kretschmar D3 Capital Club

(guarantor of loan to

Mercata Justa Partners,

$5,000,000 $5,000,000

44

LLC)

Oct. 16, 2009 Linda Von

Allmen, as trustee

of the Von Allmen

Dynasty Trust

D3 Capital Club $890,000 $890,000

Oct. 16, 2009 D&L Partners, LP D3 Capital Club $2,610,000 $2,610,000

Oct. 16, 2009 Laura and Carl

Strasser

Razorback $1,000,000 $1,000,000

Oct. 20, 2009 David Von

Allmen

D3 Capital Club $1,000,000 $1,000,000

Total $85,700,000 $82,565,816.04

205. At no time did Bank of America, through Perry or anyone else, in their

communications with Doug or any other member of the Von Allmen family, disclose their

knowledge that the Rothstein scheme was a fraud or raise any suspicion about it. Instead, the

Bank through Perry and others carefully, deliberately concealed what they knew, even though

they knew that the Von Allmens would lose all of their money as a result.

206. Had Bank of America cautioned Doug or his family at any time before they

invested between May to October 2009, the Von Allmens would not have invested dollar one

with Rothstein. But the Bank actively concealed all it knew.

207. Except for Abbuhl who was ignored and then pressured to quit, no one with

Bank of America, in any of the twenty-six internal meetings that the Bank convened to talk about

the Von Allmens finances from 2006 to 2009, said, Come on, we need to tell the Von Allmens

what we know about Rothstein.

208. Doug had always treated Perry and the Bank with respect, even generosity, in

their long fiduciary relationship. [Doug] was generous in inviting me to parties and introducing

45

me to prospective clients .... [Doug] was trying to be ... helpful in generating some potential

business for us. Perry depo at 38:13-16; 92:4-5.

209. Yet in 2009, the Bank willingly sacrificed $85.7 million of its fourteen-year

personal banking and investment client and familys money so that the Bank could bootstrap the

Von Allmens Rothstein investments into a chance to get a foot in the door with Rothstein and

ultimately replace TD Bank as the principal banker for the Rothstein Ponzi scheme.

210. Bank of Americas maneuvering the Von Allmens into investing $85.7 million

invaluably assisted Rothstein. It saved the scheme when it was in deep trouble in May 2009.

211. Rothstein was able to take the Von Allmen money invested on May 5, 2009 and

May 8, 2009 and make some of the large payouts he owed to certain New York hedge funds that

had invested in his Ponzi scheme and were closing in on him. Rothstein emailed Platinum

Partners Value Arbitrage Fund CEO Mark Nordlicht on May 6, 2009, the day after the Von

Allmens first investments: I am wiring [$]7.5mm in about 20 min to Banyon

Investments/Platinum accountI expect to wire the remainder in the next few days.

212. Thanks to the Banks active concealment of Rothsteins fraud from the Von

Allmens, the Von Allmens and other victims unwittingly invested approximately 565 million

more dollars into the scheme from May to October 2009. Most of it was lost.

213. Bank of America through its misconduct in 2009 helped turn the Rothstein saga

from a disaster into a full-fledged catastrophe for South Florida.

ix. Bank Senior Vice-President Abbuhl's reaction to the Banks concealment of its Rothstein knowledge from the Von Allmens.

214. When Bank of America / U.S. Trust Senior Vice-President John Abbuhl learned

that the Bank never warned Doug about Rothstein, Abbuhl wrote to Maller in May 2009:

46

Words cannot express how disappointing this is to me from an ethical

perspective .

x. Bank of America confirmed after the Rothstein scheme imploded that

the Bank knew all along it was a fraud.

215. On November 2, 2009, two days after the Ponzis Halloween 2009 collapse, Perry

confirmed in an email to Bank of America Senior Vice President Tim Wakeland that he knew all

along that Rothsteins scheme was a fraud. We have done everything possible to stay away

from this guy.

216. On numerous occasions we have made our suspicions known to clients

interested in doing business with him or his firm, Perry wrote on November 15, 2009.

217. In the days and weeks in November 2009 after his schemes Halloween collapse,

Perry and Bank of America / U.S. Trust Broward president Mark Maller frequently joked about

Rothstein's demise and patted each other on the back over the Bank's avoiding getting burned by

the Rothstein scheme.

218. After circulating a Miami Herald article about Rothstein's downfall, Maller

emailed Perry:

We clearly made the right call on him.

Perry responded:

Notice there is no mention [in the article] of Fred Perry / US Trust? :-)

[smiley face]

In other words, we got away with maneuvering the Von Allmens into putting millions in the

Rothstein scheme, and got away with reeling in Rothstein as a Bank client, without the press

ever catching wind of it.

47

219. Nowhere in Perry and Mallers back-patting emails (note the smiley face) do they

mention the Von Allmens loss of virtually all of their $85.7 investment million due to the

Banks willful concealment of its knowledge that Rothsteins scheme was fraudulent.

D. Though Bank of America knew all along that the Rothstein scheme was a

fraud, the Bank threw in with Rothstein in 2009 and aggressively pursued

business from him.

i. The Merrill Lynch effect.

220. In 2007, the Bank turned down a Banyon credit proposal because of Rothstein. In

2008, the Bank rejected a loan for Levin because of Rothstein. The Bank said Rothstein was a

crook, a fraud, somebody to stay away from. Yet in 2009 the Bank eagerly embraced him. The

Bank doggedly pursued depository business from Rothstein in 2009 though it knew he was a

fraud.

221. On information and belief, Bank of Americas change of attitude in 2009 at least

in part stemmed from the Banks having become a different place in 2009.

222. The Bank acquired Merrill Lynch brokerage on January 1, 2009.

223. Several of the officers in the U.S. Trust division of Bank of America in Fort

Lauderdale were from Merrill Lynch, including the following officers who dealt with Von

Allmen and/or Rothstein-related matters: Douglas DiVirgilio, Doug Bose, Samuel A. Willet,

Patricia Kowalski, Justin Courtenay, and Brian Mormile.

224. John Abbuhl told his fellow officers that the Bank had to disclose to Doug the

Banks knowledge about Rothstein. In addition to Perry, Abbuhl made his appeal to Defendant

Mark Maller, then Bank of America President of Broward County, Defendant Brian Mormile,

Managing Director, U.S. Trust / Bank of America Private Wealth Management, Defendant Doug

48

DiVirgilio, Bank of America Southeast Regional President of Private Banking, and Samuel

Willet, Bank of America East Central Florida Market President. They all ignored him, and, on

the Banks behalf, concealed what they knew from the Von Allmens. The Bank through them

and through Perry helped maneuver the Von Allmens into investing $85.7 million into the

Rothstein Ponzi scheme.

225. The Banks U.S. Trust division absorbed many of the Merrill Lynch stock-broker

salespeople. To a large degree, the Bank in the private banking / wealth management area

ceased operating like a traditional bank trust department and became more interested in selling to

clients and making money from them in whatever way possible, like a Merrill Lynch brokerage

operation.

226. More so than in the past, in 2009 the objective became bring in business rather

than serve clients needs.

227. The Bank through Perry and the new U.S. Trust stockbrokers from Merrill Lynch

took this way too far. In their mind the client became the target, an object to be used for their

own ends regardless of the consequences to the client.

228. This appears to have been the mindset that helped drive Perry, who knew that the

Rothstein scheme was at least a billion-dollar proposition, in April/May 2009 to go after the

Rothstein business, when five months earlier he had nixed a loan to Levin because Levin was

invested in the Rothstein scheme.

229. Beginning in 2009, the Bank became less worried about its getting its hands dirty

in a particular transaction and more worried about bringing business in the door, from whatever

source, and now.

49

230. In April 2009, when Perry first heard from Doug that he and his family wanted to

invest millions in the Rothstein investment program through Banyon, and then reviewed

materials that confirmed for him that it Banyon had a half-billion or more dollars invested in the

Rothstein scheme already, Perry and the Bank saw an opportunity.

231. The Bank, including through Perry, conceived a plan to maneuver the Von

Allmens into investing millions with Rothstein to help fuel the scheme going forward, and then

to persuade Rothstein to take the Von Allmen money and hundreds of millions invested from

other sources and deposit the money in accounts at Bank of America.

232. In 2009 Bank of America / U.S. Trust had no compunction about casting its lot

with a major fraud schemer. The Banks Fort Lauderdale office had already shown a willingness

in the past to do Rothsteins bidding.

233. In 2006, Rothstein was involved in a criminal scheme with a Steve Caputi,

manager of Caf Iguana on the beach. Caf Iguanas corporate entity was Kendall Sports Bar,

which had an account at Bank of America. There was an internal investigation at the Bank

regarding a check-kiting scheme that Rothstein and Caputi were involved in through Kendall

Sports Bar. With the help of his friend Ted Morse, Rothstein got Bank of America to quash its

investigation regarding the Rothstein-Caputi check-kiting scheme.

234. The prospect of Bank of America becoming the Rothstein schemes banker

was initially floated in September 2007. On September 18, 2007, Banyons Preve raised the

possibility and discussed it with Rothstein. Preve told Bank of Americas Abbuhl on that date:

I had a long discussion with Scott on your meeting with him and the

possibility of utilizing BofA for this trust account funding. As I think I

intimated, Scott is absolutely paranoid about the confidentiality issues

surrounding these kind of transactions so he has asked that we give him a

50

couple of days to digest the possibility of working with BofA. Quite

frankly I think his reluctance in part is based on taking the candy away

from his current bank so he has to come to terms with that decision.

(emphasis added).

235. In spring 2009 Perry, as he testified in his deposition, was very motivated to find

ways to do the depository and trust business [with Rothstein/RRA] . In the spring Perry

started working in earnest to ingratiate himself with Rothstein, by telling Rothstein that he

(Perry) was going to get Doug Von Allmen to invest in Rothsteins scheme.

236. Perry told Rothstein that Doug was going to invest with Rothstein and that he

(Perry) had given the thumbs up on the Rothstein investment.

237. The Bank through Perry made it clear to Rothstein that in return for giving the

thumbs up on Doug investing with Rothstein, Perry wanted Rothstein to open accounts at the

Bank.

238. After Doug invested the first twenty-two of the many millions that Doug and his

family invested with Rothstein starting in May 2009, an elated Perry reported back to Rothstein,

with Perry Bank colleague John Abbuhl present, that Bank of America was getting Doug to

invest millions in the Rothstein investment program, and that it was now time for Bank of

America and Scott Rothstein to do business together. As Abbuhl reported in his sworn

statement:

It was Fred was bragging to Scott about, Hey, we're going to get

something done for you [i.e., for Scott Rothstein], blah, blah, blah.

Meaning he was going to get the money for Mr. Von Allmen and that they

should start doing business together.

Abbuhl Sworn Stmt at 121-122. (emphasis added)

51

239. Perrys colleagues perceived that I was very motivated to find ways to do the

depository and trust business with Rothstein. Perry depo Errata Sheets at 33 (emphasis added).

240. In May 2009 Rothstein desperately needed cash to keep his fraud scheme going.

He was late on massive payments owed to the above-mentioned New York hedge funds that had

invested in the scheme. The Ponzi was in crisis.

241. After the $22 million initial wave of Von Allmen investments in the Rothstein

scheme (through Banyon) on May 5 and 8, 2009, which saved the Ponzi scheme, Perry invited

Rothstein to lunch:

242. Abbuhl rode down the elevator one day in May 2009 with Perry after the Von

Allmens had made their initial investments in the Rothstein scheme. On the elevator Perry told

Abbuhl he was going to meet with Rothstein. Abbuhl said in words or substance, What are you

doing going to meet with him? Hes the guy who youve said is a crook. Perry gave Abbuhl a

big grin and said, Just going to spend some time with Scott.

243. Perry continued to work on Rothstein and his inner-circle through 2009. On

multiple occasions Perry visited with Rothstein and close Rothstein confidant Ted Morse while

they were smoking cigars on the outdoor patio at Bova Prime, the restaurant that Rothstein

owned in the downtown office building that RRA and Bank of America shared.

52

244. Perry also took advantage of the private elevator that he and Rothstein used to get

to their respective offices in the building, on the 16th floor (Rothstein) and 21st floor (Perry) of

the building. On multiple occasions Perry made pitches to Rothstein on the elevator to open

accounts at Bank of America, saying also that he could refer business to Rothstein.

245. The Bank through Perry went so far as to enlist Doug Von Allmen -- whom the

Bank had just maneuvered into dropping millions in the Rothstein Ponzi scheme -- to assist

the Bank in its efforts to land the Rothstein depository and trust business.

246. In 2009 the Bank through Perry asked Doug on several occasions to try to

convince Rothstein to move his depository and trust business to Bank of America. An example:

53

247. Perry confirmed with Ro