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BMO Harris Bank, a unit of Bank of Montreal, must face billions of dollars in investor claims tied to a massive Ponzi scheme run by former client Tom Petters, a judge ruled, Bloomberg News reported. A request by BMO Harris to have the case thrown out before trial was rejected Friday by a federal judge in St. Paul, Minnesota. The claim was brought by a court-appointed trustee seeking to recover money for a group of hedge funds that were victimized in the fraud. Petters, a Minnesota businessman, convinced investors he and his associates were financing the purchase of consumer electronics for resale to big-box retailers, but he never bought any and used money from new investors to pay returns to older ones. Prosecutors pegged losses at $3.5 billion. Petters was convicted of fraud in 2009 and sentenced to 50 years in prison. Paul Gammal, a spokesman for the bank, said that the allegations relate to a period before BMO’s involvement. Petters originally used an account at National City Bank, which was acquired by M&I Marshall and Ilsley Bank in 2001. M&I was in turn bought by BMO in 2011. Friday’s ruling by U.S. District Court Judge Wilhelmina Wright upholds an earlier one by U.S. Bankruptcy Judge Kathleen Sanberg in favor of the trustee, who is seeking $3.5 billion. Judge Sanberg is overseeing the bankruptcy of Petters Company Inc.