GALVESTON - A Harris County business accuses Bank of America and its subsidiaries of setting up a fraudulent account that siphoned more than $185,000 from its coffers, recent court documents say.
KTM Services Inc. alleges the defendants - among them employee Anthony "Tony" Makransky - solicited its funds to buy an unregistered security, which put a dent in the plaintiff's finances.
"Working together, the defendants made multiple misrepresentations to KTM designed to induce the purchase, including false claims about the history, performance, and track record of the investment," says the lawsuit filed Sept. 11 in Galveston County District Court.
According to the original petition, on Sept. 13, 2007, the plaintiff's unnamed president went to a Bank of America branch in Clear Lake and was told by a teller to see Makransky about opening an interest-bearing account.
The suit alleges that the teller "noticed that KTM had a lot of money" in its checking account, prompting the suggestion to see Makransky.
Makransky then introduced himself to the plaintiff as a vice-president of Bank of America and proceeded to go over a plethora of investment account options, according to the complaint.
The plaintiff admitted to being inexperienced in investment banking, but Makransky promised to take care of her, the suit claims.
Makransky later contacted the plaintiff to set up an account called the First Trust Active Dividend Income Fund.
According to the complaint, Makransky and the plaintiff discussed the mechanics of the account, and the plaintiff claims she had reservations about the investment.
"The plaintiff expressed concern that if it could fluctuate then it could lose money," the suit states.
"Tony (Makransky) responded that the account was so stable that Bank of America would have to fail in order to lose money and that Bank of America can only fail if the USA fails."
The plaintiff agreed to open the account, depositing close to $1.5 million.
The suit states that KTM would later learn of alleged falsehoods behind its major investment.
KTM alleges the First Trust Active Dividend Income Fund account did not exist prior to its investment, and claims Makransky failed to provide any disclosures, a prospectus or any information at all except for his verbal assurances.
The case ultimately claims that Makransky did not work for Bank of America, but was an investment insider, and that his actions enabled co-accused to profit at plaintiff's expense.
KTM believes the defendants broke many laws with the account.
The company, which is represented by Vascoe, Valdes & Markle LLP, seeks to recover its losses and demands a jury trial.
Galveston County 10th District Court Judge David Garner is presiding over the case.
Case No. 09CV1650