Sunday, October 15, 2017

If you are a victim in Ponzi scheme under receivership, you MUST file a claim BEFORE the deadline!

A lot of ponzi schemes were caught by authorities and assets seized so the victims can be repaid.

  • ZeekRewards Receivership has sent out hundreds of thousands of checks for hundreds of millions of dollars. All victims with allowable claims have received funds for at least 75% of their losses. 

This was a huge ponzi involving almost a billion dollars and a million victims. And this was one of the most successful repayments by the receivership.

But notice the term:  All victims with allowable claims

That means victims who filed all the proper paperwork proving the amount of their loss and other requirements.

Victims who did NOT file the paperwork will probably NOT get anything.  And one case that was adjudicated September 2017 illustrated this clearly.

To make a long story short and mostly free of legalese, a certain ponzi scheme ran for 23 years in Hawaii when it finally collapsed. A bankruptcy trustee managed to recover about 8 million dollars. However, creditors filed claims of about 10.6 million dollars, of which 8.1 million was filed before the deadline. Claims are for both the invested amount (principal) and investment returns. 

Before deadline: 5.8 million principal and 2.3 million returns

After deadline: 2.6 million for both principal and returns

So now comes a question... Should the principals be paid out first, even though some of the claims were after the deadline? Logically speaking, those who lost the principal should be paid out first, and any "returns" earned in ponzi schemes are bogus and claims should be unenforceable. Indeed, that was the position taken by the receiver.

However, the judge, sticking to a strict definition of bankruptcy law, ruled that only the claims filed before the deadline will be paid... which means any claims filed after the deadline, even those for principal, are simply out of luck.

Thus: if you are victims of a ponzi scheme, and there is a claim process to get back your money... FILE EARLY. Else, you may be out of luck.

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