BMO Harris handed setback in multibillion dollar court battle

BMO Harris Bank, which could be on the hook for billions of dollars in a lawsuit involving its liability for a large Ponzi scheme, has lost a key ruling ahead of an upcoming trial.

The Chicago-based bank faces the possibility of an astronomical payout after a federal judge found that BMO Harris intentionally destroyed evidence that it knew was harmful to its defense.

Assuming the case goes to trial, the jury will be instructed that it can draw an adverse inference about the evidence destruction, according to the judges ruling. The case is scheduled to go to trial on Oct. 7 in Minneapolis.

BMO Harris Bank said through a spokesperson that it respectfully disagrees with the decision by U.S. District Judge Wilhelmina Wright.

Bloomberg

BMO Harris undisputedly destroyed dozens of email backup tapes containing multiple years worth of unique digital information, wrote U.S. District Judge Wilhelmina Wright, upholding a bankruptcy judges 2019 decision.

The record reflects that BMO Harriss personnel knew that the backup tapes likely contained unique and relevant information from pre-March 2005 that was not preserved elsewhere.

The case involves a Ponzi scheme that Thomas J. Petters ran between 1994 and 2008. In 2010, Petters was sentenced to 50 years in prison in connection with what the Department of Justice described as a $3.7 billion scheme.