In the last year, there have been several Ponzi schemes unearthed in Florida. The chief architect of one such scheme that bilked Floridians out of $55 million is considering a plea deal, but whether victims of the fraud will be able to recover any of their losses depends on what assets the court and its appointed receiver(s) are able to find.
This is often the problem in Ponzi schemes and other types of fraud cases. Most of the headlines are devoted to the criminal aspects of the cases, but as parties are convicted or enter into plea arrangements, the work is just beginning on the civil side of things. Tracking down and clawing back assets that can be distributed to victims of such schemes can involve complex business litigation that may take years to complete. And even then, there’s no guarantee that victims will even come close to recovering what’s been lost.
In such cases, courts often appoint a receiver to hold assets as they are recovered. A receiver is a trusted neutral party – usually an attorney or law firm with considerable receivership experience. As the litigation associated with the fraud case unfolds, the receiver will collect monies, liquidate non-liquid assets, manage properties, and collect rents until the civil matter is resolved.
Once all assets have been located and liquidated, the receiver will hold them until the court makes the ultimate decision as to how to distribute the proceeds. The court’s order will direct how the proceeds are to be divided and to whom they will be distributed. This task also falls to the receiver. Because of the complexity of such matters and the amount of time such legal processes can take, it is critical that appointees are experienced. An experienced receiver can help ensure that fraud victims recover their losses to the fullest extent possible.
Source: Herald-Tribune, “Plea deal on table for executive in $55 million Ponzi case,” John Hielscher, Dec. 11, 2017