Berkshire Hathaway sued for reverse Ponzi scheme
Breakaway Courier Systems, which employs about 300 people, in a lawsuit said Berkshire and its Applied Underwriters company have engaged in what was “essentially a reverse Ponzi scheme.”
Breakaway said it was led to believe that funds for discounted workers’ compensation insurance were being put into “protected cells” which would eventually be returned.
“Instead, Berkshire Hathaway illegally siphons off premiums through an unlicensed, unregistered and undercollateralized Hawaiian entity, leaving New York employers and injured workers without the funds that New York State requires to be available to cover losses due to worker injuries,” according to the complaint.
Breakaway is seeking repayment of the $863,048 it shelled out during the policy period, plus no less than $18 million in damages. Breakaway is being represented by Dunnington Bartholow & Miller. ■