Bank of America Sued for Fraud by Philadelphia Flyers Head Coach
We’ve written about the shenanigans big banks try to pull on people all the time. Often these cases involve average home owners who are looking for a way to decrease their home payments, get out from underneath a bad investment, are underwater in their homes or other issues.
But apparently, the fast moves and back door tricks the big banks lay on the average home owner are pretty similar to what they do to famous people too. That seems to be what is happening to the hockey coach of the Philadelphia Flyers, Peter Laviolette, according to a recently filed lawsuit.
Stanley Cup and Real Estate
Shortly after Laviolette won the Stanley Cup in 2006, an investment subsidiary of Bank of America name Banc of America Securities approached the coach and his wife. They owned a house in Raleigh North Carolina and two additional properties in Florida.
The agents from the investment company advised the couple to leverage all of the equity they could from their current properties and then to invest that in high risk investments. The proposal they created estimated that the Laviolette’s wealth would grow from $8.1 million to $22.0 million in 30 years.
Not only did the growth and payoff occur, but the whole deal collapsed and there was a significant loss of principal as well. The lawsuit is requesting $3 million dollars in damages as well as rescission of all three loans made through the failed investment plan.
The lawsuit goes further to state that the projections in the proposal were based on artificially inflated values and that there was little to no hope that the projections would become reality.
Not Just the Little Guys
It seems as though people have less sympathy for the rich and famous when they lose money, this lawsuit shows that the big banks don’t care. Their job is to milk as much money as they can, any way they can.
If they cross the line and get sued, an army of lawyers are there to clean up the mess and moderate the damages. They have made so much money on all of their other shady actions that getting called to the carpet on a couple isn’t going to break the bank, literally.
But fraud and misleading bank practices can happen to anyone. People who feel as though they have been victimized by fraudulent bank practices might feel as though they were tricked because they were not intelligent enough or too naïve. But as we can see, this type of thing can happen to anyone.
The Take Away
What we can all learn from this and the millions of other cases of bank maleficence? Well, first and foremost, don’t believe the hype and the sales pitch.
Just because someone in a suit gives you a fancy proposal, really take a look at the numbers. If it sounds too good to be true or there seems to be no risk, run the other direction. There is no such thing as a free meal and if the numbers they are pimping are astronomical, chances are it’s not legit.