David Voreacos and Susannah Nesmith, Bloomberg
Toronto-Dominion Bank (TD), after losing a $67 million verdict over claims it aided a $1.2 billion Ponzi scheme, should be sanctioned for “altering” a document used at trial, an investor said in court papers.
Coquina Investments, which won the verdict on Jan. 18 in federal court in Miami, seeks sanctions after a trial over whether TD Bank should have detected money laundering that supported a Ponzi scheme that disbarred attorney Scott Rothstein ran out of his law firm.
The unaltered document shows TD Bank designated Rothstein, Rosenfeldt & Adler as “HIGH RISK” in letters on a bright red band at the top of the page, according to a March 26 filing by Coquina. The document, which Coquina introduced into evidence after getting it before trial from TD Bank, has a black bar that obscures the words, according to the filing.
“TD Bank’s purposeful withholding of the true original RRA Customer Due Diligence Form constitutes evidence of willful bad faith,” according to the motion. Failure by the bank and its lawyers to say anything about the document being admitted into evidence “demonstrates both intentional malfeasance and a flagrant lack of candor to the court.”
Coquina, based in Corpus Christi, Texas, seeks “just and appropriate” sanctions and a referral to federal prosecutors for investigation of possible obstruction of justice charges.
TD Bank, Canada’s second-largest lender, doesn’t comment on litigation, spokeswoman Rebecca Acevedo said yesterday in an e- mail.
Copying Problems
In a court filing on April 12, the bank denied Coquina’s claims of “altering a key document and working a fraud on the court and the jury.” Rather, it blamed problems in the copying process during the pretrial exchange of evidence known as discovery. That process inadvertently blackened all colored headers, including the words “high risk,” on the documents.
“We sincerely regret this copying error,” said TD Bank in a motion filed by its law firm Greenberg Traurig LLP. “But it was that (i.e., an error), and not an effort to hide the ‘high risk’ designation.”
The filing also disputed Coquina’s claim that its case was harmed by the document, noting that other sections of the “customer due diligence” form showed that Rothstein’s firm was designated as high risk.
