By Jonathan Stempel
Documents filed last month in the U.S. District Court in Philadelphia, also reported in the February 6 edition of The New York Times, detail accusations the bank and its lawyers knew about the fraud allegations for years.
They also accused Wachovia of trying to win or retain business from companies that it knew were accused of telemarketing fraud, despite being alerted by other banks about the deceptive activity, the papers show.
Wachovia has sought to dismiss the complaint.
She also said the Charlotte, North Carolina bank has taken steps to implement new risk management for third-party payment processors and telemarketers. She said Wachovia "does not have customers who are strictly telemarketers, or who are third-party payment processors to telemarketers."
"To knowingly bank a customer who is perpetrating fraud places the bank at great exposure," Wachovia risk management official Tim Brady wrote a colleague in an April 8, 2003 e-mail concerning payment processor Amerinet, court papers show. Wachovia took on the account, according to court papers.
"YIKES!!!! Now, the crux of the problem (in case you haven't already guessed) is that ALL their deposits are THIRD PARTY DRAFTS!!! DOUBLE YIKES!!!!" according to the e-mail cited in court papers. "There is more, but nothing more that I want to put into a note."
The named plaintiffs include Mary Faloney, a disabled Pittsburgh resident living on Social Security, and Anitra and James Whitt of Virginia Beach, Virginia, who are married with four young children, court papers show.
