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Pension funds allege U.S. Bank negligent in $25 mln bond fraud

fraud

REUTERS-

Three municipal employee pension funds that invested $25 million in a now worthless bond offering have sued U.S. Bank for negligence, alleging that it released bond proceeds to a criminal enterprise that pocketed the money.

Filed on Wednesday in a South Dakota federal court, the lawsuit said U.S. Bank, trustee for the bond offering, missed numerous red flags, including inconsistent paperwork, that should have tipped it off to the investment fraud.

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