PROVIDENCE – Berkshire Bank, a Boston-based bank with five locations throughout Rhode Island, is facing a federal class action lawsuit alleging it helped facilitate a $100 million Ponzi scheme operated by Miles Burton Marshall, a longtime tax preparer and insurance agent in upstate New York, according to WKTV NewsChannel 2, an NBC affiliate in Utica, N.Y.
The lawsuit was filed on Sept. 10 in U.S. District Court for the Northern District of New York by a class of defrauded investors and Fred Stevens, a court-appointed administrator representing 369 victims.
Facing the Holidays with a Cancer Diagnosis
The holidays are often painted as a time of joy, tradition, and togetherness. But for…
Learn More
Marshall allegedly promised 8% annual returns through promissory notes but instead used funds from new investors to pay earlier ones, according to the lawsuit. It further claims those investor funds were funneled through a Berkshire Bank checking account used to carry out the scheme.
One of the lead attorneys representing the investors, Daniel Centner of Peiffer Wolf Carr Kane Conway and Wise LLP, said the bank ignored multiple red flags over a six-year period – including a 2021 email from NBT Bank, Marshall’s former bank, warning that Marshall may be running a Ponzi scheme.
Despite that warning, Centner said, Berkshire continued handling Marshall’s accounts and provided him with a remote check scanner capable of depositing up to $300,000 per day, WKTV reported.
“An investment scheme of this scale and magnitude simply cannot be undertaken by one person alone,” said Robert Elgidely, a partner at Fox Rothschild representing Stevens. “In this case, we allege that Berkshire Bank was not only turning a blind eye to obvious criminal activity – they were enabling it and profiting from it at every step of the way.”
The scheme allegedly affected 1,000 investors across the region, according to WKTV.
Berkshire Bank operates 83 branches throughout New York and New England, including Massachusetts, Rhode Island, Connecticut and Vermont, and is the third-largest regional bank headquartered in Massachusetts.
There are five Berkshire Bank locations in Rhode Island: one each in Providence, South Kingstown, Middletown, Newport and Westerly.
On Aug. 25, Berkshire Hills Bancorp Inc., the parent company of Berkshire Bank, and Brookline Bancorp Inc., the parent company of Brookline Bank, Bank Rhode Island and PCSB Bank, announced they have received all required regulatory approvals to complete their proposed merger of equals, clearing the way for the launch of a new combined entity that will be known as Beacon Financial Corp.
Upon closing, Beacon Financial will become a $24 billion regional banking franchise serving the Northeast with more than 145 branch offices.
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
