SALT LAKE CITY — More than a quarter of the estimated 430 people who lost $200 million in an alleged silver investment scheme have now sued the Utah bank that they say helped perpetuate the fraud.
Another 95 people filed a federal lawsuit Tuesday against Zions Bank, claiming it "aided and abetted" an alleged Ponzi scheme involving Rust Rare Coin and its owner Gaylen Rust. Last week, 20 people sued the bank making the same allegations.
Rust is accused of tricking people into believing they were pooling their money to buy and sell silver, but the funds were used to pay other investors, according to a Securities and Exchange Commission complaint filed in November.
Zions Bank breached its duty to take action once it became aware Rust diverted the funds to himself, family members and "flailing" companies, the lawsuit says.Comment on this story
"Rust could not have perpetrated the silver pool scam on his own. Instead, he crucially depended on the knowing participation of his bank, Zions Bank, through which Rust committed his fraud," according to the lawsuit.
A federal judge froze assets of Rust Rare Coins in November and placed the company in receivership.
Zions Bank said in a statement last week it was reviewing the lawsuit. It also said subsequent to the SEC filing, it has been reviewing all of its interactions with Rust Rare Coin and is cooperating with the receiver and authorities.