Former PNC employees aided $85 million South Florida fraud scheme, lawsuit alleges

A Miami-based court-appointed receiver is suing Pittsburgh-based PNC Bank, claiming two former employees helped three South Florida residents engage in a massive fraud scheme.

Jonathan E. Perlman is seeking a jury trial and unspecified damages.

In April 2018, the Federal Trade Commission entered into settlements with South Florida residents Jeremy Marcus, Craig Smith and Yisbet Segrea, after charging them with bilking some 15,000 people out of a total of more than $85 million. The trio allegedly offered to resolve debt issues and improve the credit ratings of the victims for monthly fees, which were instead diverted for the group’s personal use.

In a suit filed this week, Perlman, the court-appointed receiver, alleges that Denton Douglas, a former PNC banker, formed a business relationship with Marcus during the period Marcus and his associates were committing the alleged scheme. Douglas received referral fees for directing clients to Marcus’ fraudulent companies, Perlman alleges. Douglas also referred Marcus to Edward Piazza, another former PNC employee for business.

In a statement, PNC said it does not comment on legal matters. It is not clear when Douglas and Piazza left PNC.

A representative for the U.S. Treasury Department said it does not confirm or deny the existence of investigations. Douglas and Piazza have not been charged.

Reached by phone, Douglas declined to comment. Piazza, in a phone call, said he was working with the receiver.

According to the suit, Douglas met Marcus in early 2014, just after PNC had first opened accounts for a few of his fraudulent corporations. In July 2014, PNC’s fraud detection system was triggered, and Marcus’ accounts were frozen. Through the U.S. banking network’s Early Warning Services system, other banks were also alerted.

Despite knowing this, Perlman alleges, Douglas said he would work to get Marcus’ money out of the frozen accounts. He continued to do business with Marcus and proposed a joint-venture agreement for developing real estate in Port St. Lucie.

Once it became clear that he could not get banking services elsewhere, Marcus called on Douglas to get him through PNC firewalls and reopen the accounts linked to the fraud. Douglas successfully did so nine months after PNC initially froze Marcus’ accounts, when the pair named Craig Smith as the companies’ primary manager. In fact, Perlman alleges, Marcus remained in control of the companies.

The second period at PNC lasted from May to December of 2015. During that time, Perlman alleges that the bank held or processed more than $32 million in funds from defrauded customers.

Meanwhile, in August 2015, Marcus, through one of his companies, lent Douglas $185,000 to be used to purchase property in West Palm Beach. After his accounts were closed again in December of 2015, Marcus made repeated attempts to collect on the loan, including threatening Douglas with warning his supervisor of his role in the scheme.

In May 2017, two days after a federal Court entered its initial asset freeze order against the Marcus group, Piazza, the former PNC employee, withdrew $350,000 from an account that was subject to the asset freeze order, according to the suit.

“Piazza made this withdrawal immediately after receiving two phone calls: one from Marcus, who called Piazza’s partner to warn him that the Receivership Entities were being taken over by a federal agency; and the other from [Douglas],” the suit alleges.

Perlman is a shareholder at the Miami-based firm Genovese Joblove & Battista

“We will continue to file lawsuits and diligently seek recoveries for the benefit of victims against those who are legally responsible as the Court has charged us with doing,” he said in a statement.