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Banks took little note of busy Ponzi suspect

NEW YORK — The United States requires banks to know their customers. But several big ones, including Citigroup, JPMorgan Chase & Co., and Wells Fargo, may have missed getting acquainted with Daniel Fernandes Rojo Filho.

Filho, a 48-year-old self-proclaimed Brazilian billionaire living in Orlando, came under US investigation in 2009 in connection with an alleged conspiracy involving drug trafficking, money laundering, and a Ponzi scheme. He and others forfeited tens of millions of dollars worth of Lamborghinis, gold bars, and other assets, according to court documents. In 2013, he agreed to forfeit another $25 million in accounts registered to his children and businesses.

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That was all a matter of public record in mid-2014, when Filho started opening new bank accounts. He set up at least 17 in the name of his company — DFRF Enterprises, derived from his initials — and signed his own name.

Filho’s banking flurry is detailed in several fresh cases against him, including an August criminal indictment alleging he used some accounts in a scheme that promised investors income from nonexistent gold-mining operations. He faces similar allegations in separate lawsuits filed this year by the Securities and Exchange Commission and by a group of investors.

“If the banks had just Googled this guy, they would have known enough to stay away,” said Evans Carter, a Framingham attorney who brought the investors’ class-action suit early this year.

Filho, arrested in July, was due to appear at a hearing Thursday in Boston connected to the criminal charges. He couldn’t be reached for comment on the recent charges and hasn’t responded through the courts to the civil actions. His public defender did not respond to requests for comment, and two attorneys who have previously represented him declined to comment.

The Justice Department didn’t bring charges against Filho or any others in the earlier probe that resulted in the asset forfeitures. In the current matter, neither the SEC nor US prosecutors have accused any banks of wrongdoing.

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Still, the latest allegations against Filho — including that he duped 1,400 people into signing up for a pyramid scheme — offer an anecdotal spot check of how some big banks are doing as a first line of defense against financial crime.

By the time Filho went to open his accounts, US authorities had already penalized global banks more than $10 billion since the financial crisis for providing services to suspected money launderers, sanctions violators, or other criminals. Six months earlier, JPMorgan had agreed to pay more than $2.5 billion, admitting lapses in handling accounts for Ponzi schemer Bernard Madoff.

The banks where Filho allegedly opened the new accounts included the North American units of JPMorgan and Wells Fargo & Co., as well as RBS Citizens of Massachusetts, according to the class-action suit. The suit named Filho and the banks among the codefendants. After the plaintiffs reached an undisclosed settlement with Filho in April, they voluntarily dismissed their complaint against JPMorgan, Wells Fargo, and Citizens, Carter said.

Those banks all declined to comment.

Filho also used an account at Citigroup’s Citibank as part of the scheme, according to the indictment. Citigroup has been cooperating with authorities, spokesman Mark Costiglio said.

Several global banks have bolstered their compliance departments in recent years, in part to ensure the banks don’t run afoul of so-called Know Your Customer laws.

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JPMorgan spent an extra $2 billion from 2012 through 2014 to improve its compliance and cybersecurity efforts, it said last year.

Citigroup, which has said it is cooperating with a US money-laundering investigation related to its Mexico unit, has spent about $1.5 billion to boost the number of staff with some form of compliance or control function to 30,000.

By October 2014, a few months after beginning to open bank accounts, Filho was promising investors his company would pay up to 15 percent interest monthly — “fully guaranteed” — the SEC alleged.

He talked up his company at an October 2014 promotional event for DFRF held aboard the Spirit of Boston party boat in Boston Harbor, the SEC says. A video of that event was posted on YouTube a few days later, among the first of several promotional clips posted in at least four languages. In one video, a promoter said DFRF had 80 gold mines, with more than $1 trillion in reserves, according to the SEC.

Filho and other promoters told investors the operation insured their funds and donated one-quarter of its profits to charity.

The mines were a fiction, as were the other claims, the SEC said in its June 30 suit.

In the year through May 2015, Filho brought in $15 million from investors and paid more than $6 million to himself, including for a Rolls-Royce, two Lamborghinis, and two Ferraris, the SEC suit says, which accused Filho of selling unregistered securities and mail fraud.

Also in May, Boston-based Eastern Bank Corp. was looking into suspicious activities in one of DFRF Enterprises’ accounts, according to the federal indictment. Before that account was closed, Filho allegedly wired $1.8 million to a DFRF account at Citibank.

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