ING Bank contends it lost hundreds of millions of dollars as a result of a “massive Ponzi scheme” at now-defunct National Century Financial Enterprises Inc., and filed a lawsuit accusing the company's former banker, auditor and officers of fraud.
ING contends J.P. Morgan Chase & Co. (JPM) and Deloitte & Touche LLP assisted National Century, once one of the nation's largest health-service financing providers, with running a financial shell game.
The suit, filed Monday in Manhattan federal court, also names National Century's former chief executive, Lance Poulsen, and three former directors.
National Century, a closely held Dublin, Ohio, company, collapsed in 2002. The company sold as much as $3.25 billion of notes in private placements between 1999 and 2002 to purchase and securitize accounts receivables from health care companies.
Federal authorities in Ohio have said the company provided false offering documents, monthly reports and accounting records to investors, and sought to trick its trustees and auditors.
In its suit, ING claims the alleged fraud would not have been possible without the “knowledge and critical participation” of J.P. Morgan, which acted as trustee for National Century-related bonds, and Deloitte, which audited the company's financial statement. ING Bank is a subsidiary of the Dutch financial services company ING Group NV.
J.P. Morgan spokeswoman Kristin Lemkau declined to comment. Deloitte spokeswoman Deborah Harrington said the company hadn't yet seen the suit and couldn't comment. Albert Lucas, attorney for National Century's former chief executive Poulsen, couldn't be reached.