Wachovia Bank mismanaged a trust fund set up for children in the Seminole Tribe of Florida for nearly a decade, costing the beneficiaries as much as $800 million, lawyers told a Broward jury Wednesday.
In opening statements for a trial expected to last several weeks, plaintiffs’ lawyer William Scherer accused the bank, now owned by Wells Fargo, of deliberately failing to make standard stock investments, opting instead for less volatile but less lucrative money market accounts that didn’t always keep pace with inflation. In the process, Scherer said, the bank illegally paid itself $7,138,320 in unauthorized fees.
The trust fund has since been transferred to another financial institution, Providence First Trust Company. Tribe members and Providence are suing Wells Fargo to recover what it calls the lost revenue.
“Wells Fargo engaged in intentional misconduct, breached its fiduciary duty, and unlawfully collected millions of dollars in fees, resulting in a devastating monetary loss to the value of the Seminole Tribe of Florida’s Minors’ Trust,” Scherer said. The alleged misconduct remained unnoticed from 2005 to 2015, Scherer said.
When Tribe members confronted bank officials, those officials recommended signing a new agreement to conceal the misconduct, Scherer said.
Lawyers for the bank were scheduled to respond with their opening statement Wednesday afternoon but requested a delay from Broward Circuit Judge William Haury. Their opening is now scheduled for Thursday morning.
The trust fund was set up to benefit the children of the Seminole Tribe, with money streaming in from the Tribe’s highly profitable casinos located throughout the state. At the time the lawsuit was filed in 2016, the trust’s assets were at $1.4 billion.
Tribe members receive significant payments when they reach adulthood, an age that has increased over the life of the trust fund from 17 to 24. Beneficiaries receive money management training and other services before they receive their payments.
Rafael Omeda can be reached at rolmeda@sunsentinel.com or 954-356-4457. Follow him on Threads.net/@rafael.olmeda.