Lawsuit accuses Berkshire Bank of aiding multi-million dollar Ponzi scheme in Madison County

WAMPSVILLE — Attorneys representing the nearly 1,000 investors allegedly scammed in a decades-long Ponzi scheme in Madison County have filed a lawsuit against the bank that they claim allowed Miles B. Marshall to conduct his accused fraud.

The attorneys claim Berkshire Bank, especially the former branch in Oriskany Falls, was aware of Marshall’s activities, ignored frequent warnings about the ongoing scheme and took steps to help him continue, according to the complaint filed in the U.S. District Court for the Northern District of New York on Wednesday, Sept. 10.

“Banks have incredibly sophisticated fraud detection systems that alert them almost immediately to any suspected fraudulent behavior. Berkshire Bank had those systems in place, and we know that those systems work. We know that over a 6-year span, Marshall’s accounts generated dozens of alerts,” said attorney Daniel Centner of the law firm Peiffer Wolf Carr Kane Conway & Wise, headquartered in New Orleans.

Marshall, age 74, was charged in June with 49 counts of securities fraud and grand larceny by the New York Attorney General’s Office, accused of stealing more than $50 million from 988 investors over a multi-decade period, prosecutors said. His next court date is Sept. 15 in Madison County Court.

According to the prosecutors, Marshall solicited unsuspecting clients to invest millions of dollars into his so-called “Eight Percent Fund” over the course of three decades, claiming that their funds would be primarily used for real property investments. Instead, Marshall allegedly used funds to pay investment returns to prior investors, as well as to pay his personal expenses and the expenses of his other businesses.

[…]

‘We lost it all’

One such client was Darlene Stetson, of Waterville, who said she and her husband originally hired Marshall as their tax preparer. Stetson said she joined the Eight Percent Fund in August 2018 with deposits of $3,000 and $5,000, with the promise of 8% annual interest added to their fund.
Over the years, Stetson said they deposited $70,000.

“We lost it all,” Stetson said. “It was one of the biggest shocks of our lives when this all came crashing down. The money that was stolen has financially crippled many families and organizations within the community.” And the more they learn about Berkshire Bank’s involvement, “the more we all feel utterly outraged,” she said.

Stetson and her husband are the named clients in the lawsuit, representing hundreds of putative class investor-victims, all represented in the lawsuit by Centner’s firm and the Silver Law Group. A total of 369 specific clients are being represented by Fred Stevens, who was assigned as the plan administrator and assignee of bank litigation claims, who, in turn, is represented by the law firm of Fox Rothschild.

Scheme details

According to the lawsuit, Marshall maintained an account in his individual name at the Berkshire Bank branch in Oriskany Falls between 2015 and 2023, along with six other accounts titled in both his individual name and the name of a “doing business as” sole proprietorship. While Berkshire Bank required Marshall to open separate accounts for each “doing business as” account, the Bank allegedly, and continuously, allowed him to commingle the funds in such accounts by sweeping them from the “doing business as” accounts to the account titled in his individual name, the attorneys stated.

The lawsuit claims over $211 million in transactions passed through Marshall’s personal account between 2015 and 2023. The lawsuit claims that the bank knew that Marshall was not licensed to sell investments or provide investment advice, and that such activity was “wildly inconsistent” with his customer profile. The bank’s fraud detection software issued alert’s about Marshall’s activity every five to six weeks, the lawsuit claims.

“Marshall’s scheme was so apparent and so obvious that another bank — a bank that Marshall no longer had any relationship with whatsoever — reached out to Berkshire Bank to try to stop him,” Centner stated.

The attorneys said they have an email sent from NBT Bank, Marshall’s former bank, on Oct. 18, 2021 warning the assistant vice president of security and fraud investigations at Berkshire about the possible Ponzi scheme.

“Berkshire Bank didn’t care,” Centner said. “Berkshire Bank ignored that warning and then doubled down on its support for Marshall by giving him a personal check scanner.”

The Oriskany Falls branch was closed in October 2021 — the same month as the email from NBT Bank, noted the attorneys — and the lawsuit claims a private banker was tasked by Berkshire to retain Marshall as a client by giving him a check scanner, allowing him to remotely deposit up to $300,000 in checks per day.

As of Sept. 1, Berkshire Bank has become a division of Beacon Bank and Trust, following a merger with Brookline Bancorp.

Centner said it was “premature” to ask for a certain amount in damages, noting that the courts would hear those arguments at a later time.

“Every dollar that flowed through these accounts needs to get clawed back and paid out to the rightful owners: the investor victims who lost the money in the first place,” Centner stated. “These victims are hard-working, good people who are now dealing with significant life obstacles as a result of all of this.”

Source: Daily Sentinel September 11 2025