TORONTO - TD Bank Group (TSX:TD) will take a $255-million provision related to litigation against the bank for its role in a $1.2-billion Ponzi scheme.

The bank said Monday the provision will result in an after-tax charge of $153 million or about 17 cents per share.

A U.S. federal jury ruled earlier this month that TD Bank owes Coquina Investments $67 million for its role in the scheme that was operated by a now disbarred lawyer, Scott Rothstein.

The lawsuit was the first to go to trial of several pending cases filed by wronged investors against TD and others.

TD said it will consider all options including an appeal and intends to defend itself vigorously in the other cases, but the litigation provision was the prudent move.

"Based on the current environment and information, the bank believes this provision is appropriate and while additional exposure is possible, it will be manageable," TD said in a statement.

Once a prominent South Florida lawyer, Rothstein is serving a 50-year prison sentence after pleading guilty to running a massive scam involving investments in phoney legal settlements that imploded in 2009.

The 49-year-old lawyer has been co-operating extensively with federal prosecutors, and more people are expected to face criminal charges; seven besides Rothstein have already been charged.

The scheme was one of the largest frauds in South Florida history and triggered the failure of the once high-flying Fort Lauderdale law firm Rothstein Rosenfeldt Adler. Rothstein has boasted about paying bribes to unnamed politicians, judges and law enforcement officials, and he raised thousands of dollars for the campaigns of many state and national politicians.

Testimony and court documents show that Rothstein used an account at a TD Bank branch as an integral part of the scheme. Conspirators in his scheme allegedly posed as TD Bank employees, and one of Rothstein's associates devised a fake TD Bank website on which fake account balances were posted for investors.

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