U.S. Citizens Just Filed A Lawsuit Of ‘Ponzi Scheme’ Against Lebanese Banks & BDL

Banque Du Liban | Law

Three Lebanese banks, in addition to the central bank, have been targeted by a lawsuit filed by two US citizens for refusing to transfer their US dollar deposits.

Lebanese-American couple Joseph A. Daou and Karen M. Daou recently filed the lawsuit in New York City against Al-Mawarid Bank, BLC Bank, Credit Libanais, and Banque du Liban.

The plaintiffs accused the central bank of running a Ponzi scheme by cooperating with the three banks to prey on their $18 million deposits, which they needed to transfer to satisfy funding obligations for highly valuable real estate acquisitions in the US.

In the document just released, The United States District Court for the Southern District of New York, which is where the lawsuit was filed, said:

“Plaintiffs Joseph A. Daou and Karen M. Daou are married United States citizens who deposited hard-earned United States dollars (“USD”) in three Lebanese banks, only to be preyed upon by the Ponzi scheme that is the Lebanese banking system.”

The lawsuit accused the banks of “entering into a conspiracy in which they agreed to make fraudulent misrepresentations to Plaintiffs, issue worthless checks to Plaintiffs in the United States that Defendants [the banks] had no intention of honoring, and, despite the fact that they were knowingly issuing worthless checks to Plaintiffs, reducing Plaintiffs’ balances as if Plaintiffs had actually received their USD.”

The banks allegedly did the latter after they refused to transfer the $18 million of the plaintiffs abroad.

In effect, the court ordered the three banks to pay $150 million in damages and lawyers’ fees to the couple. To date, neither bank has commented on the case.

Paul Morcos, a renowned legal consultant, told The Daily Star that this case “may pose a pressure on the banks although there is no guarantee that the plaintiffs will win the case against these banks.”

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