Bank of America Corp. is facing a shareholder lawsuit that claims the company played a major role in a suspected case of investor fraud involving a client.
The lawsuit, filed Thursday in U.S. District Court for the Southern District of New York on behalf of Agape World Inc. investment clients, alleges that the $2.5 trillion-asset Charlotte company "failed to respond to the illegitimacy and unlawful nature" of Agape's business activities. The lawsuit, which was filed by the New York law firm Zamansky & Associates, asserts that B of A had an employee working in Agape's headquarters building and that it allowed the client to commingle funds it received from investors.
Nicholas Cosmo, the owner of Agape World in Hauppauge, N.Y., was arrested in January after being charged with mail fraud for allegedly cheating investors out of $140 million.
Agape has claimed that it provides private bridge loans to commercial real estate companies and builders.
"As outlined in the class action … we filed today, we allege that Bank of America, the nation's largest bank, … substantially assisted Cosmo's fraud and played a major role in the loss of investor funds," said Zamansky & Associates founder Jacob Zamansky in a blog posting about the suit.
The lawsuit seeks damages of more than $400 million.
A Bank of America spokesman declined to comment on the shareholder suit.