Class Action Claims Royal Bengal Logistics Stole $112M From Investors in ‘Classic Ponzi Scheme’

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A proposed class action lawsuit claims more than 1,500 investors were defrauded in a $112 million Ponzi scheme allegedly orchestrated by Florida trucking company Royal Bengal Logistics, Inc.

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The 31-page lawsuit claims that the Royal Bengal scheme ran from at least August 2019 through June 2023 and mainly targeted South Florida's Haitian-American community, promising victims high-yield investment opportunities that would purportedly be used to grow the company’s operations and its fleet of semi-trucks and trailers.

According to the case, Royal Bengal lured proposed class members with the promise of safe investments and generous, guaranteed returns from the rapid growth and success of its trucking business. In reality, the case contends, the defendant had been operating at a loss of more than $18 million and, in “classic Ponzi scheme fashion,” used approximately $70 million in new investor funds to repay existing investors.

The suit alleges Royal Bengal executives also misappropriated at least $13.9 million of investors’ funds for themselves and diverted around $19.3 million to use for unauthorized, highly speculative securities trading.

Named as a co-defendant is Citibank, which the filing claims aided and abetted Royal Bengal’s massive fraud scheme. Per the complaint, Citibank monitored, reviewed, and flagged but nevertheless approved fraudulent activity in the business deposit account it managed for Royal Bengal.

“…[N]o one knew more about the schemes or was in a better position to put an end to the schemes than Citi,” the filing contends. “Yet, driven by Citi's desire to gain more business from and make money on RBL [Royal Bengal Logistics], Citi engaged in a pattern of behavior that demonstrated its knowledge or willful ignorance of the schemes.”

The complaint specifies that Royal Bengal offered at least two investment programs, assuring investors returns ranging from 12.5 to 325 percent. The first program involved the purchase of a semi-truck, a trailer or both in the investor’s name, and the second offered individuals the opportunity to invest in the company’s general business operations, the Royal Bengal lawsuit says.

“Unbeknownst to the investors, RBL's representations about the success of RBL's trucking company, the safety and security of investor funds, the size of RBL's fleet, and RBL's ability to pay investor returns from the profitability of RBL's trucking enterprise were all false,” the case contests.

As the complaint tells it, most of the trucks Royal Bengal claimed to have bought on behalf of investors really belonged to independent contractors who drove their own trucks for the company. The semi-trucks Royal Bengal actually purchased as part of the program were decades old and in poor condition, the filing alleges.

On June 20, 2023, the U.S. Securities and Exchange Commission filed a complaint in the U.S. District Court for the Southern District of Florida, charging Royal Bengal and its president, Sanjay Singh, with operating an alleged Ponzi scheme in violation of federal securities laws. The court granted the SEC’s request to appoint a receiver for Royal Bengal.

The lawsuit looks to represent person or entity in the United States, including all states, territories, protectorates, and federal districts, who entered into an agreement with Royal Bengal Logistics, Inc. of the same form or substantially similar form as exhibit 1 or exhibit 2, and whose investment was deposited into the Citibank account between August 2019 and June 21, 2023.

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