Synovus Bank to retain $2 million of MOBE victim’s funds

A proposed settlement between Synovus Financial institution and the MOBE Receivership was filed on September seventeenth.

If permitted, the settlement will successfully finish Synovus’ marketing campaign to retain $6.3 million in MOBE sufferer’s funds.

The funds in query the place fraudulently obtained by way of MOBE, a $318 million greenback pyramid scheme.

MOBE processed sufferer funds by way of QualPay, who in flip used Synovus Financial institution.

The roughly $6.3 million steadiness has been frozen by way of injunction since 2018.

Each QualPay and Synovus Financial institution have argued they’re entitled to maintain the $6.3 million.

QualPay was knocked out of the proceedings following decision of parallel proceedings initiated by the FTC.

Fraud allegations towards QualPay concluded in a suspended $46.7 million greenback judgment again in June.

As per the phrases of the Synovus settlement, $2 million can be launched to Synovus.

The remaining ~$4.4 million, plus curiosity accrued since March 2020, can be retained by the MOBE Receivership.

Each Synovus and the Receivership have agreed to drop any excellent claims towards one another.

The Receivership asserts

the settlement is honest and in the very best curiosity of the Receivership property as a result of it not solely gives substantial funds accessible for distribution to defrauded customers and different claimants within the claims course of, but it surely additionally ends expensive litigation with Synovus over entitlement to the reserve funds at challenge, in addition to unsure advantages that may end result from any litigation efforts by the Particular Receiver towards Synovus.

The Particular Receiver additionally expressed uncertainty relating to

  • the price of continued litigation towards Synovus;
  • the potential for having handy over greater than the disputed quantity of Synovus prevailed; and
  • challenges related to asserting claims towards Synovus to show they “had the flexibility to detect and/or take motion with respect to the fraud dedicated by MOBE”.

The price of appointing the Particular Receiver to resolve the Synovus litigation totals $95,316.

Pending approval of the proposed settlement, keep tuned…


Replace thirteenth November 2020 – The Synovus Financial institution settlement was permitted on November twelfth.