Bar Works victims sue JPMorgan for allegedly helping Ponzi scheme

Suit claims bank knew Renwick Haddow’s firm was a scam but did nothing

Nov.November 06, 2017 05:00 PM

Renwick Haddow and Bar Works

A group of Bar Works victims is suing JPMorgan Chase for $3 million over its role in the alleged Ponzi scheme.

The plaintiffs, a group of 27 Chinese investors, allege that the bank knew Bar Works was a Ponzi scheme but still allowed its mastermind Renwick Haddow to keep an account, which he used to collect millions from his victims.

“(JPMorgan Chase) had everything it needed to unmask and stop the fraud — it had unique information from which it could have reached only one plausible conclusion: Haddow was a thief,” according to the complaint, filed in Manhattan Federal Court Monday.

The bank could not immediately be reached for comment.

Bar Works was a co-working company that operated several locations in New York City and other cities. It also raised money from investors around the globe to fund its expansion, selling desks in its spaces along with any revenues they would make. In January, The Real Deal first reported that Renwick Haddow, a British accused fraudster, was the mastermind behind the company and raised questions over the identity of the supposed CEO, Jonathan Black.

In late June, the Securities and Exchange Commission and the Justice Department unveiled fraud charges against Haddow, accusing him of stealing $37 million from investors and hiding the money in offshore accounts. In July Moroccan authorities arrested him in Tangier.

Meanwhile, investors filed five different civil lawsuits against Haddow in the U.S. to recoup some of their money, which can be difficult if the funds were moved overseas. Going after U.S. firms that did business with Haddow, such as JPMorgan Chase, offers an alternative.

The suit, filed by attorney Michael Kapin, alleges JPMorgan Chase knew the company’s CEO “Jonathan Black” was fictitious, that Bar Works sold more desks than it owned and that Haddow used investors’ money for personal expenses and wired large sums abroad.

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