TD Bank settles $7 billion Ponzi scheme lawsuits for $1.2B

TD Bank on Monday agreed to pay more than $1 billion to settle lawsuits over a notorious Ponzi scheme, one of the largest fraud cases in U.S. history.

The $1.205 billion will be paid to a court-appointed receiver, who will use it to reimburse victims of the mega-swindle by previously high-rolling Texas billionaire Allen Stanford. TD Bank was the third of three institutions that settled lawsuits brought by thousands of investors who lost life savings or retirement money.

Stanford, 72, is about 10 years into a 110-year prison sentence for masterminding the scheme, after his 2012 conviction for the fraud that came to light in February 2009, around the same time of the notorious Bernard Madoff scheme.

HSBC Holdings has agreed to pay $40 million and the former Bank of Houston, now named Independent Bank, will shell out $100 million. A judge must approve all three settlements.

TD Bank said it had acted legally and did not know it was being used for fraud.

“As has been the case throughout these proceedings, TD expressly denies any liability or wrongdoing with respect to the multi-year Ponzi scheme operated by Stanford and makes no admission in connection to any Stanford matter as part of the settlement,” the bank said in a statement.

“TD provided primarily correspondent banking services to Stanford International Bank Limited and maintains that it acted properly at all times. TD elected to settle the matter to avoid the distraction and uncertainty of continuing a long legal proceeding.”

The receivership called it a win.

“Given all the challenges faced by the receivership since 2009, this is nothing short of a monumental recovery,” the receiver’s lead counsel, Kevin Sadler, said in a statement obtained by CNN.