Background:
City National Bank (CNB), known as the “bank to the stars,” is facing a lawsuit alleging it helped facilitate a Ponzi scheme that defrauded hundreds of investors.
Allegations:
The lawsuit accuses CNB of providing millions of dollars in loans to Zachary Horwitz, the mastermind behind the scheme. Horwitz allegedly used the money to fund his lavish lifestyle and pay off earlier investors.
Red Flags Ignored:
The plaintiffs claim that CNB ignored “glaring red flags” and “bent the rules” for Horwitz, giving his scheme an air of legitimacy. They allege that the bank knew Horwitz bragged about his relationship with CNB in documents he shared with investors.
Loan Details:
Between 2013 and 2019, CNB reportedly processed $1 billion in transactions for Horwitz, issued $64.2 million in loans, and granted him 456 credit extensions.
Legal Action:
The plaintiffs are seeking $770 million in damages from CNB. The bank has declined to comment on the ongoing litigation.
Bank’s Profile:
CNB has over $93.72 billion in assets and 70 locations across eight states.
