I hate writing these stories. Innocent victims who entrusted their hard earned money to a fraudster. The fraudster walks away with millions while the victims are left holding the bag. Often the SEC or bankruptcy court steps in and a receiver is appointed to find marshal assets but even those efforts are often fruitless. Case in point; the $30,000,000 Ponzi scheme allegedly run by lawyer Jay Korn. (I say “allegedly” because Korn committed suicide before being charged and convicted.)
Korn was a lawyer who apparently had no qualms stealing from investors or clients. After his death, a U.S. Bankruptcy Court trustee began the arduous task of trying to recover money for the many victims, clients and creditors.
The final tally? $30 million in claims and after several years of hard work by the court trustee, just $85,000 in recovery. That works out to less than a penny for every $3 of loss but the story gets worse. The trustee gets paid first. Unless there is a big future recovery, victims will get nothing.
While many victims just wait for a receiver or trustee to collect something, smart victims become proactive and try to find other avenues of recovery. We often can collect from stockbrokers or insurance agents who sold or recommended the phony investment deals (financial professionals have a duty to conduct due diligence before making recommendations), accountants or financial planners that fail to figure out that the investment is nothing more than an abusive tax shelter and even banks that sometimes facilitate these Ponzi schemes.
Can we get recovery for everyone? Obviously not. And its often very difficult if the victim purchased from the Ponzi scheme fraudster directly.
If you have lost money in any kind of Ponzi scheme, bogus 419 plan, abusive tax shelter, REIT, tenant in common scheme (TIC fraud) or other scam, speak with a knowledgeable asset recovery professional. In most instances the initial consultation is without charge and often recovery cases can be handled on a contingent fee basis meaning no legal fees unless there is a recovery.
Mahany & Ertl – Asset Recovery Lawyers