Twenty-six banks-including several in Minnesota-will reportedly benefit from a recent jury decision, which found that a South Carolina-based bank helped a "boy-band" creator defraud his creditors.
A federal jury in Minneapolis on Thursday found that Mercantile Bank helped Lou Pearlman-a businessman behind famous "boy bands" including the Backstreet Boys and 'N Sync-defraud creditors, and awarded $16 million to 26 banks that lost money in the process, the Star Tribune reported.
Pearlman is currently serving a 25-year federal prison sentence for his role in a $300 million Ponzi scheme, according to media reports.
St. Paul-based American Bank was among a group of small banks, including some others in Minnesota, that agreed to lend Pearlman $28.5 million. According to the Star Tribune, the money was presumably meant to finance a television show. American Bank reportedly put $5 million into the loan and was the lead bank in the loan package.
American Bank argued in court that Mercantile knew of Pearlman's fraud, including the fact that the two accountants who prepared Pearlman's financial records were fictitious, the Minneapolis newspaper reported. Mercantile has since been bought by TD Bank Financial Group in Canada.
To learn more about the case and the jury's decision, read the full Star Tribune story here.
Minneapolis-based Lindquist & Vennum PLLP, represented American Bank in the case, and it touted the victory in a Friday news release.
"TD Bank conspired with a convicted felon to deceive their business peers for their own personal gain," Lindquist & Vennum Litigation Partner Eric Nystrom said in a statement. "The large size of today's award sends a strong message about business ethics and the importance of doing the right thing."