Bank’s Case Against Cash-Advance Companies Partially Revived

An Ohio appeals court on Tuesday partially revived a Pennsylvania-based bank’s lawsuit against dozens of companies that provided money to a fraudster who caused the bank to lose nearly $60 million.

S&T Bank Inc. adequately alleged civil conspiracy and fraud claims against many of the merchant cash-advance companies it sued in the wake of a check-kiting scheme carried out by Cincinnati businessman Harold Sosna, the Ohio Court of Appeals, First District said.

If the companies continued to advance “substantial” amounts of money to Sosna and his companies, only with less favorable terms, despite knowing he was kiting checks for insolvent ...