TD Bank expert says bank looked at Rothstein alerts

TD Bank conducted “reasonable due diligence” regarding dozens of alerts generated by computer systems regarding Ponzi schemer Scott Rothstein’s fraud, an expert testified at trial on Tuesday.

Accountant Ivan Garces, an expert witness hired by TD Bank, testified in a trial where a Texas-based company, Coquina Investments, is suing TD Bank for $27 million over its losses in the Rothstein fraud.

Garces said Rothstein’s accounts generated many internal computer alerts, including 50 alerts for overdraft warnings, 47 alerts for anti-money laundering and 21 alerts for check fraud.

He testified that he looked at how staff had handled the alerts and arrived at conclusions that there was “nothing suspicious” about the handling of the alerts.

Garces repeatedly said the bank “conducted reasonable due diligence” by examining the alerts.

Garces was also asked about a chain of emails from April 2009 where TD Bank considered opening escrow accounts for a client who was investing in Rothstein’s scheme.

Jane Pope, TD vice president in Jacksonville, raised a laundry list of suspicions in the emails about the investments and asked for more information. It did not appear that Pope knew that the potential client was investing with Rothstein, however, and TD Bank denied the application for escrow accounts.

Garces, a partner at Kaufman Rossin., said he had not reviewed the Pope email trail for his testimony. When asked about it on the stand, he said he didn’t believe it said anything about TD Bank’s knowledge of Rothstein’s accounts.

Pope’s email could be considered by the jury, which has to decide what TD Bank knew about Rothstein and his investments, which were the source of millions of dollars on deposit with the bank. Coquina alleges that TD Bank aided and abetted Rothstein’s fraud.

TD Bank maintains that Coquina should have known Rothstein’s investments were fishy, and all TD did was provide banking services.

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