While the unwinding of the late Ken Casey’s large Ponzi scheme, covering dozens of North Bay income real estate properties and over 1,200 investors, continues in bankruptcy court, a separate legal battle is heating up between some of those investors and the bank hosting Casey’s business accounts.
An audit after Casey’s death in May 2020 and a subsequent Securities & Exchange Commission investigation found that the scheme left the Marin County resident’s investment firms,Professional Investors Security Fund and Professional Financial Investors, underfunded since at least 2015.
Rather than going to paying returns, some of the $350 million raised from investors was used to pay for lavish living, auditors concluded. The inquiries resulted in bankruptcy filings in mid-2020 by the two firms, sales of most of the properties in late 2021 for $436 million, and the sentencing of Lewis Wallach, the top surviving executive, in September 2021 to 12 years in prison for embezzlement of $26.7 million.
The separate legal battles come from four investors — Shela Camenisch, Dale Dean, Luna Baron and Eva King — who sued Umpqua Bank in federal court in August 2020, two months after the ruse was discovered. They are accusing the Oregon-based institution, whose Novato branch was where Casey’s firms did their banking, of “aiding and abetting” in the plot to shift funds from new investors to pay existing investors.
Named after 1920s postage-stamp speculator Charles…
