A Ross couple frustrated with a poorly performing trust administered by a subsidiary of the massive Deutsche Bank has sued Germany’s largest bank over alleged concealment of its ties to the Third Reich.
Regina and Lamonte Lawrence — the founder of Lawrence Semiconductor — filed the suit in Marin County Superior Court after asking lawyer Ted Hannig to investigate Deutsche Bank and seek legal redress for the alleged loss of $4.2 million of a $19 million trust set up to benefit the S.F.-based Jewish Community Federation.
Hannig uncovered the 136-year-old bank’s ties to Hitler’s Third Reich. Among other offenses, Deutsche Bank helped to fund the construction of Auschwitz and allegedly profited from the material goods stripped from concentration camp inmates.
Hannig’s discovery, however, was not altogether surprising: Deutsche Bank has participated in a number of Holocaust restitution efforts, including a multi-billion dollar fund largely sponsored by the heads of Deutsche Bank, DaimlerChrystler and Allianz formalized in 1999.
A Google search for “Deutsche Bank” and “Holocaust” turns up nearly 87,000 hits.
Hannig, however, argues that the bank’s efforts at restitution and well-publicized negotiations with the World Jewish Congress while purchasing American subsidiaries are immaterial. In failing to inform the Lawrences of the bank’s Nazi ties, he claims the fiduciary agent handling the trust was at fault.
“Much like if you’re selling your home, if there’s been a murder in your home, you have to make sure that’s disclosed to the buyer,” said Hannig, who filed the suit on July 18.
Regina Lawrence, who declined to be interviewed by j., is of Jewish descent and lost relatives in the Holocaust. The suit asks for a return of more than $4.2 million lost from the trust and $376,000 in management fees.
Hannig said the Lawrences will not benefit financially from any money gained from the suit and plan on forwarding it to a new trust opened up on behalf of the JCF. He also hopes Deutsche Bank alters its policy on disclosing its past to clients.
Deutsche Bank does not comment on pending litigation.
The Lawrences had a longstanding financial relationship with corporate bank Alex. Brown, which was obtained by Bankers Trust in 1997, which was in turn obtained by Deutsche Bank in 1999. Hannig acknowledged that his clients knew they were dealing with Deutsche Bank at that time as its name began appearing on financial statements. Yet it was only after the trust underperformed that they began investigating its past.
Hannig acknowledged that the Lawrences would have no idea about Deutsche Bank’s Nazi ties if the trust had performed adequately. When asked if the couple would have severed their ties with the bank and/or sued if the trust had performed well, he said he could not speculate.
The lawyer bristled when asked how the Lawrence’s scenario differed from a Jewish buyer purchasing a Volkswagen and then discovering the company’s Holocaust-era ties after the car underperformed.
“When one undertakes the position of a fiduciary, it’s not the same as manufacturing a car or coffee pot. There are completely different rules and obligations,” he said.
On the other hand, Mark Rothman, the Holocaust services advocate for Los Angeles-based legal provider Bet Tzedik, thought the Volkswagen analogy was “strong.”
Rothman added that the suit was unlike any he had ever seen.
In most cases he’s seen, Rothman said, “people are dealing with historical acts where they realize their family was victimized in some way — their homes were taken or their business were seized.
“It’s pretty extraordinary to see a connection to something that has occurred in the modern era. It is novel.”
A hearing is scheduled for Oct. 27.