Charlotte-based Truist Bank has come to a multi-million dollar agreement with federal authorities to settle allegations of mismanaged trust accounts that were meant to protect individuals who had received personal injury settlement awards. According to a statement made by the U.S. Department of Justice, Truist will pay $9,125,000 to resolve claims related to its subsidiary, SunTrust Bank's, handling of these accounts between December 2011 and December 2015.
U.S. Attorney Ryan K. Buchanan emphasized the importance of the role financial institutions play in maintaining the community's trust. "This settlement demonstrates our office’s commitment to hold accountable any bank that violates its fiduciary duties to beneficiaries, especially in situations involving vulnerable clients," Buchanan stated in the DOJ's announcement. The issues at hand revolved around trust accounts associated with The Halpern Group, a structured settlement facilitator that directed personal injury litigants to SunTrust for the creation of trusts.
These "Doe Run Accounts," as they were known, originated from lead poisoning settlements near Herculaneum, Missouri, and were intended to safeguard the financial futures of the affected individuals. Despite this noble intent, the U.S. government claimed that SunTrust, in collusion with The Halpern Group, approved disbursements from these trusts that were neither prudent nor in the best interests of the beneficiaries—often benefiting third parties such as relatives instead.
Principal Deputy Assistant Attorney General Brian M. Boynton further emphasized the importance of financial entities adhering to the law. "Our federally insured financial institutions must act in accordance with the law, including meeting their obligations to beneficiaries when they serve as trustees," he said in the DOJ's announcement. According to Boynton, today's settlement is a clear indication that the Department will not hesitate to take action against banks that knowingly violate legal requirements. The settlement was achieved through the collective efforts of the Civil Division’s Commercial Litigation Branch (Fraud Section) and the United States Attorney’s Office for the Northern District of Georgia, with contributions from Senior Trial Counsel David W. Tyler and Assistant U.S. Attorney Austin M. Hall, among others.
It's important to note that while the settlement represents a resolution to the claims made by the U.S. government against Truist and SunTrust, it does not equate to an admission of liability. As the matter currently stands, these are allegations, and there has been no determination of legal fault.
