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Madoff Trustee Scores Major Victory At Second Circuit: Inquiry Notice, Red Flags And What It All Means To The Recovery Effort For Victims Of Madoff’s Ponzi Scheme – Insolvency/Bankruptcy/Re-structuring

AU.S. Appeals Court has provided renewed hope for the Trustee
tasked with recovering billions of dollars for victims of Bernie
Madoff’s massive Ponzi Scheme, ruling that a district court
applied an incorrect (and more difficult) standard in preventing
the Trustee from recovering subsequent recipients of transfers from
the now-defunct investment company. In Picard v. Citibank
N.A.,
 20-01333, Second U.S. Circuit Court of Appeals
(Manhattan), published on August 30, 2021, the Second Circuit
revived two lawsuits filed by Trustee Irving
Picard1 against various recipients of allegedly
fraudulent transfers from Madoff’s firm after concluding that
the district court erred in applying a stricter pleading standard.
The decision promises to have sweeping ramifications going forward
and further increases the possibility that Madoff’s victims
could recover 100% of their losses through the Trustee’s
efforts. 

Following Madoff’s arrest, the Securities Investor
Protection Corporation moved under its authority pursuant to the
Securities Investor Protection Act (SIPA) to appoint Picard as a
trustee to liquidate Madoff’s investment firm. Since his
appointment, Picard has filed hundreds of “recovery
actions” against dozens of defendants, who are
“subsequent transferee” defendants under Section 550 of
the Bankruptcy Code. The Picard decision is critical, resulting in
over seven dozen such cases, totaling many billions of dollars that
previously would have been…

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Court Denies Appeal of Founder Involved in Alleged $1,500,000,000 Bitcoin Ponzi Scheme

A court in Russia’s Tatarstan region has denied the appeal of the founder involved in the alleged $1.5 billion Bitcoin Ponzi scheme.

According to Russian publication Inkazan, the Supreme Court of Tatarstan upheld the arrest in absentia of Marat Sabirov, the co-founder of Finiko, a company which the Bank of Russia put on its list as having signs of a pyramid scheme. The ruling proceeded without the physical presence of Sabirov in court.

 

According to blockchain analytics firm Chainalysis, deposits of more than $1.5 billion were allegedly made into Finiko between December 2019 and August 2021. Finiko operated mostly in Eastern Europe and predominantly in Russia and Ukraine.

A report indicates that deposits to the Ponzi scheme ranged between a minimum of 100,000 rubles ($1,360) and a maximum of 81 million rubles ($1.1 million). Participants were required to deposit either Bitcoin (BTC) or Tether (USDT) into the alleged Ponzi scheme that promised returns of up to 30% per month.

The Supreme Court of Tatarstan also upheld the arrest in absentia of other Finiko founders: Edward Sabirov and Zygmunt Zygmuntovich.

The three, who are currently placed on an international wanted list, are alleged to be close associates of another Fininko co-founder, Kirill Doronin. Doronin, who is currently in custody ahead of his trial, sought to be released on house arrest on grounds that he could pay Finiko investors.

Doronin’s personal assistant and the vice-president of Finiko,…

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Inside one of Hollywood’s most audacious Ponzi schemes

The promise of easy money brought Jim Russell to a bar at the Four Seasons Hotel in Beverly Hills.

Russell, a steel company executive from Las Vegas, had come to meet Zachary Horwitz, a low-level actor seeking investors for his film company.

Horwitz made it sound simple: He would use Russell’s money to buy the rights to cheap movies — “Slasher Party,” “Satanic Panic” and the like — and then resell them to HBO for distribution in Latin America. He’d pay Russell back in six months with a 15% profit.

Russell had already wired Horwitz more than half a million dollars after a friend vouched for the 30-year-old actor.

Now, Horwitz was offering a chance to invest much more.

At dinner that night in 2017, Russell was intrigued but nervous. What would happen if HBO declined to buy the rights to a film, he asked.

“HBO has never backed out,” Horwitz replied, according to Russell.

Over the next two years, Russell and his partners made $80 million in loans to the actor’s company. They thought they were financing scores of deals to buy and sell film rights.

In reality, they’d been lured into what federal investigators describe as one of the most audacious Ponzi schemes in Hollywood history.

Horwitz collected $690 million from investors for movie deals authorities say were fictitious. The HBO and Netflix contracts he used to convince Russell and others that his business was legitimate were forgeries, the government says.

For years, Horwitz kept the con going by using…

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Stanford Ponzi Scheme Recovery Tops $1 Billion With Help From Insurers

A court-appointed receiver has recouped more than $1 billion for victims of Texas financier Allen Stanford’s Ponzi scheme, the largest by dollar amount other than Bernard Madoff’s fraud, the receiver’s lawyers said on Monday.

The threshold was crossed when Ralph Janvey, the receiver for Stanford Financial Group, received $65 million from a June 2016 settlement with insurers including Lloyd’s of London, which won final court approval in January after years of litigation.

Janvey expects to distribute money from the settlement in the first quarter of 2022. As of April 29, he had received court approval to distribute about $550 million, and had distributed $443 million.

Once considered a billionaire but later declared indigent, Stanford, 71, is serving a 110-year prison sentence following his 2012 conviction for running a $7.2 billion Ponzi scheme affecting approximately 18,000 former investors.

Prosecutors said Stanford sold fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank, and used investor money to make risky investments and fund a lavish lifestyle.

The fraud lasted about two decades, and was uncovered in February 2009.

“When the receivership started, the receiver found only $63 million in a bank that was supposed to be holding more than $7 billion,” Kevin Sadler, a Baker Botts partner representing Janvey, said in an interview. “It has taken more than 12 years, but getting to $1 billion is a…

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Cebu cosmetic firm flagged for engaging in ‘Ponzi’ scheme

PONZI SCHEME. The Securities and Exchange Commission Cebu extension office releases to the public the purported secondary license as claimed by the beauty and cosmetic firm, SCET Colleens Corporation based in Cebu City. SEC-Cebu officer-in-charge lawyer Alma Marie Estrada-Dalen on Tuesday (Sept. 21, 2021) said the company was flagged for allegedly engaging in an investment scheme without secondary license from the government. (Photo courtesy of Vanessa Almeda)

CEBU CITY – The Securities and Exchange Commission (SEC) has flagged a company based here offering beauty, cosmetics, home and personal care to the public for allegedly engaging in a Ponzi scheme by soliciting investments without a government license and permit.

 

In a statement on Tuesday, SEC Cebu extension office officer-in-charge, lawyer Alma Marie Estrada-Dalena, identified the company as SCET Colleens Corporation holding office at Unit 2004 Grand Residences on Apitong Street.

 

Citing SEC Enforcement and Investor Protection Department (EIPD) report, Dalena said the company claimed to have a secondary license but later found in an investigation that the document it was using was allegedly fake.

 

She said the firm offers a number of investment packages…

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Why Did ‘LHHATL’ Star Karlie Redd and Maurice “Mo” Fayne Divorce?

Many fans of Love & Hip Hop: Atlanta were utterly shocked when castmate Karlie Redd gushed about her new fiancé Maurice Arkansas “Mo” Fayne and showed off her engagement ring in Season 8. Not too long after the reality star broke up with fellow cast member Yung Joc, Karlie had moved on with Mo, and fans thought she had jumped into a new relationship too soon. Mo briefly appeared on LHHATL, and his storyline was primarily about his and Karlie’s relationship.

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The pair bought a house together and even had their engagement party on the series. One of the obstacles in their relationship revealed on the show was that Mo had cheated on Karlie and had a child with another woman. Karlie also accused her fiancé of being possessive on the reality series. The two did attend counseling to try and work out their problems, but unfortunately, things did not improve.

Source: GETTY IMAGES

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Their romance quickly turned sour, and Karlie called it quits with Mo in 2019, ending their secret marriage. In the Season 9 premiere of Love & Hip Hop: Atlanta, Karlie mourned the death of her relationship with Mo with a dramatic funeral that signified the end of their marriage. Fast forward over a year, Karlie’s ex-husband is making headlines for being sentenced to 17 and a half years in prison. Keep reading to find out why Karlie and Mo divorced and why he was given such a hefty prison stint.

Why did Karlie Redd divorce Mo…

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Bristol Realtor Sentenced To 10 Years For Ponzi Scheme | USAO-EDTN

GREENEVILLE, Tenn. – On April 23, 2021, Tammy Lynn Hawk, 47, of Bristol, was sentenced by the Honorable Clifton L. Corker, in the United States District Court for the Eastern District of Tennessee at Greeneville.

 As part of a negotiated plea agreement, Hawk pled guilty to an information in January 2021. The information charged Hawk with one count each of wire fraud, aggravated identity theft, money laundering, and making a false tax return. Hawk was sentenced to 10 years in prison, followed by three years’ supervised release. Hawk will be required to make restitution of $658,838 to her unpaid victims and $71,062 in unpaid taxes to the United States.

According to court records, Hawk was a well-established real estate agent in the Bristol, Tennessee area. Despite the success she enjoyed as a realtor, she ultimately used her knowledge, skills, and clientele to devise and operate a Ponzi-type scheme. Under her scheme, she would notify victim clients of large profits to be made with quick-flip properties, take cash from the victims, and ultimately repay earlier victims with funds she swindled from newer victims. Hawk defrauded at least 24 victims and, by the time her scheme was discovered, 12 victims remained unpaid and had lost over $500,000.

Hawk took extensive steps to hide and conceal her scheme as well, including false statements, sham real estate contracts, the use of electronic signing services, and forgery. Hawk also failed to disclose any of these matters…

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Bitcoin a ‘gimmick’ and resembles a Ponzi scheme: ‘Black Swan’ author

“Black Swan” author Nassim Nicholas Taleb on Friday criticized bitcoin as a “gimmick,” telling CNBC he believes it’s too volatile to be an effective currency and it’s not a safe hedge against inflation.

“Basically, there’s no connection between inflation and bitcoin. None. I mean, you can have hyperinflation and bitcoin going to zero. There’s no link between them,” Taleb said in a “Squawk Box” interview.

“It’s a beautifully set up cryptographic system. It’s well made but there’s absolutely no reason it should be linked to anything economic,” added Taleb, whose bestselling 2007 book examined highly improbable events and their potential to cause severe consequences. He said bitcoin has characteristics of what he calls a Ponzi scheme that’s right out in the open.

A Ponzi scheme is a type of fraud whereby crooks steal money from investors and mask the theft by funneling returns to clients from funds contributed by newer investors.

Taleb had once held favorable views toward bitcoin, which was created in 2009 and is the world’s largest cryptocurrency by market value. However, he told CNBC he was “fooled by it initially” because he thought it could develop into a currency used in transactions.

“Something that moves 5% a day, 20% in a month — up or down — cannot be a currency. It’s something else,” said Taleb, a former derivatives trader who serves as scientific advisor to hedge fund Universa Investments.

“I bought into it … not willing to have capital appreciation, so…

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Madoff Scheme Victims Get New $568M Distribution

Madoff, who pleaded guilty to 11 felonies in 2009, died in prison earlier this year at the age of 82 while serving a 150-year sentence.

A federal judge had refused Madoff’s request for compassionate release last June, saying that the sentence was meant to reflect the “extraordinarily evil” nature of Madoff’s offense.

“Although this was a financial crime, as I observed at sentencing, it was not ‘bloodless.’ Rather, it has taken and continues to take ‘a staggering human toll,’ causing heartache, despair, and even suicide,” the judge wrote at the time.

The Madoff Victim Fund, headed by former U.S. Securities and Exchange Commission chair Richard Breedan, is tasked with distributing money forfeited to the federal government. To date, the fund has distributed more than 170,500 total payments to 39,500 victims, according to its website.

In a statement, Breedan said that the latest distribution included newly approved claims, as well as thousands of victims who were previously subject to payment holds relating to collateral recovery issues.

“Measured by the number of victims paid, this is our largest distribution yet. By dollars, this is our third largest distribution,” he said. “However, by any measure, this is a big step toward completing MVF’s mission of helping renew the lives of Madoff’s victims and delivering the broadest and largest recovery for crime victims ever achieved.”

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Allen Stanford’s Ponzi scheme recovery tops $1 billion

Allen Stanford smiles as he waits to enter the Federal Courthouse in Houston March 6, 2012. REUTERS/Richard Carson/File Photo

Sept 20 (Reuters) – A court-appointed receiver has recouped more than $1 billion for victims of Texas financier Allen Stanford’s Ponzi scheme, the largest by dollar amount other than Bernard Madoff’s fraud, the receiver’s lawyers said on Monday.

The threshold was crossed when Ralph Janvey, the receiver for Stanford Financial Group, received $65 million from a June 2016 settlement with insurers including Lloyd’s of London, which won final court approval in January after years of litigation.

Janvey expects to distribute money from the settlement in the first quarter of 2022. As of April 29, he had received court approval to distribute about $550 million, and had distributed $443 million.

Once considered a billionaire but later declared indigent, Stanford, 71, is serving a 110-year prison sentence following his 2012 conviction for running a $7.2 billion Ponzi scheme affecting approximately 18,000 former investors.

Prosecutors said Stanford sold fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank, and used investor money to make risky investments and fund a lavish lifestyle.

The fraud lasted about two decades, and was uncovered in February 2009.

“When the receivership started, the receiver found only $63 million in a bank that was supposed to be holding more than $7 billion,” Kevin Sadler, a Baker Botts…

Read more…

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