Civil Suit Alleges Wachovia Conspired With Payment Processor in Scheme to Defraud Elderly

Apr 12, 2007, 01:00 ET from Langer & Grogan, P.C.

    PHILADELPHIA, April 12 /PRNewswire/ -- Langer & Grogan, P.C. announced
 today that it had filed a RICO class action alleging that Wachovia Bank,
 N.A. had conspired with a payment processor, Payment Processing Center
 ("PPC"), in a scheme that facilitated fraudulent telemarketing directed
 primarily at the elderly involving tens of millions of dollars. The suit
 was filed in Federal Court in Philadelphia.
     The complaint describes the use of "demand drafts" by deceptive
 telemarketers based on banking information they obtained over the phone
 from victims. The complaint alleges that PPC prepared the demand drafts and
 deposited them in a series of accounts opened at Wachovia. The complaint
 alleges that Wachovia, aware that demand drafts were commonly used by
 deceptive telemarketers, continued to open and to maintain the accounts,
 even though (1) the accounts had a return rate of approximately 60% of the
 total sums of the drafts deposited, and (2) even after a second
 Philadelphia bank had warned Wachovia that it was being flooded by
 unauthorized bank drafts originated by PPC and had solicited Wachovia's
 assistance "in trying to shut down the scam." The complaint states that,
 "Wachovia responded that 'overzealous' telemarketers were responsible for
 the problems with the PPC bank drafts, but nonetheless continued to accept
 such drafts from PPC." The complaint also alleges that other banks
 complained to Wachovia of PPC's activities. The complaint alleges that
 Wachovia had a special agreement with PPC which granted Wachovia expanded
 refund and charge back rights. The complaint alleges that Wachovia knew
 that the banking services it provided were an essential element in PPC's

SOURCE Langer & Grogan, P.C.