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Bank to the Stars is being sued for $770,000,000 for allegedly facilitating a Ponzi scheme and ignoring glaring warning signs.

A lender known as the "bank of the stars" is being sued for $770 million for allegedly aiding and abetting a Ponzi scheme in Hollywood.

Plaintiffs in the lawsuit accuse Los Angeles lender City National Bank (CNB) of running a fraudulent scheme that defrauded hundreds of investors, reports the Los Angeles Times.

The lawsuit alleges that CNB provided millions of dollars in loans to Zachary Horwitz, the mastermind of a film licensing scheme that stole more than $690 million from friends, family and other investors.

In February, the Securities and Exchange Commission (SEC) announced that Horwitz was found guilty of violating multiple securities laws for defrauding victims by claiming that investors would receive more than 35% of the profits from his business selling movie rights to Netflix and HBO. But Horwitz never actually sold any movie rights to streaming services and used the money to fund his lavish lifestyle and satisfy previous investors.

The lawsuit alleges that between 2013 and 2019, the lender processed $1 billion in transactions for Hortwitz, originated $64.2 million in loans and granted him 456 loan extensions.

The bank also allegedly ignored "glaring red flags" and "violated the rules" of Horwitz for years, while substantially helping him by "adding an air of legitimacy" to his Ponzi scheme. According to the lawsuit, City National Bank knew Horwitz had bragged about his relationship with the lender in documents he shared with investors.

The plaintiffs are asking the court to order CNB to pay $770 million to victims of Horwitz's scheme.

A spokesman for the lender said the bank would not comment on ongoing litigation.

City National Bank has more than $93.72 billion in assets and 70 branches in eight states.

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