Confidential Banyon Letter Points Finger at TD Bank

This is one for the documents file. I just received this email that was sent yesterday from the Banyon hedge fund to investors. Its authenticity is confirmed.

In it, Banyon owner George Levin, the leviathan Scott Rothstein feeder who believed he and his investors had nearly $1 billion in RRA's trust accounts, rebuts allegations made by lawyer Bill Scherer in his amended complaint. The letter claims that Levin personally guaranteed investments made by others and that he "blew the whistle" on Rothstein with a call to the U.S. Attorney's Office on November 1, after a meeting of investors at Banyon's.

I've already mentioned Banyon's "independent verifier," Michael Szafranski. Understand that Szafranski was supposed to have not only verified bank account information but also met the defendants and plaintiffs in the fake settlements, right down to inspecting their driver's licenses. Point is that the level of fraud is massive and may involve Rothstein cronies playing those roles with fake I.D.s. Considering several other Rothstein stunts, this is very possible. Finally, Levin points the finger firmly at the remaining deep pockets in all this, TD Bank. From the letter:

Yes, George Levin trusted Scott Rothstein. However, he trusted TD Bank even more. Banyon conducted multiple layers of due diligence on these investments; due diligence that included the work our independent verifier did on our behalf (which we detailed in our last message to you), our direct interactions with senior officials at TD Bank regarding our trust accounts, and independent verification of these accounts and their balances at TD Bank branches in states other than Florida. Despite all of this, Scott Rothstein was able to commit this fraud. He did so with the cooperation of certain senior TD Bank officials.

That's a pretty raw accusation. Here's the letter:

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CONFIDENTIAL

November 30, 2009

Re: RRA Matter

To our colleagues,

In our continuing effort to keep you current, we wanted to provide you with an update on the Rothstein Rosenfeldt Adler PA matter.

On Wednesday evening, the same attorney from last week's letter filed an amended lawsuit that includes George Levin as a defendant. That complaint makes several unsubstantiated claims about George that we want to directly address.

First and foremost, George Levin did not know that Scott Rothstein was operating a ponzi scheme. On the contrary, he trusted Rothstein, as did so many others. Rothstein is a gifted liar who

deceived many, including George.

One fact that has been lost in the current media scrutiny is that George is the biggest loser in Rothstein's scheme. He not only personally invested much of his own money with Rothstein, he also invested millions from his family and friends. More than that, George personally guaranteed this investment. The idea that he was somehow in on this scheme not only runs contrary to all the facts at hand, it is ludicrous on its face.

We want to be clear that the allegations in this current suit - regarding both George Levin and Frank Preve - are outrageous and false. It is telling that the lawyer who filed this new and amended complaint has already changed the very facts we disputed in our last communication with you. What other facts has he misunderstood and/or mistakenly misconstrued?

The complaint alleges that George made comments at an emergency meeting of victims on Sunday, November 1, that caused suspicion among some. First, George never made those statements - they are outright false. Second, the list of attendees at that meeting is not even correct - some of the people who were alleged to be there simply were not. And third, and most important, is this: On the same day that this lawsuit alleges George made suspicious comments in an effort to prolong Rothstein's ponzi scheme, he also instructed his counsel to contact the U.S. Attorney's office to report his concerns. That outreach spurred the current investigation. The idea that the very person who blew the whistle on Rothstein was his accomplice is, again, ludicrous on its face.

As we have told you many times before, our first and only priority is recovering our investment. Yes, George Levin trusted Scott Rothstein. However, he trusted TD Bank even more. Banyon conducted multiple layers of due diligence on these investments; due diligence that included the work our independent verifier did on our behalf (which we detailed in our last message to you), our direct interactions with senior officials at TD Bank regarding our trust accounts, and independent verification of these accounts and their balances at TD Bank branches in states other than Florida. Despite all of this, Scott Rothstein was able to commit this fraud. He did so with the cooperation of certain senior TD Bank officials. We are moving aggressively to recover the funds that were stolen, and will continue to commit all of our efforts to recovering both your money and our own.

Thank you for your continued support.

Banyon Group


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