Recent Posts

New Florida Law May Protect Charities Against Ponzi Scheme Clawback Claims
Posted on 18 Jun 2013 by Kathy Bazoian Phelps

Last Friday, Florida Governor Rick Scott signed HB 95. This bill amends § 726.109 of the Florida Statutes by adding this broad defense to a claim to avoid a charitable contribution as a fraudulent transfer: "The transfer of a charitable... Read More

No More Ugly American: Judge Refuses to Allow Madoff Trustee to Pursue Foreign Indirect Investors
Posted on 23 Jul 2014 by Kelley Drye & Warren LLP

by Ben Feder Judge Jed S. Rakoff of the Southern District of New York last week ruled that the U.S. Bankruptcy Code does not permit a bankruptcy trustee to recover foreign transfers [ an enhanced version of this opinion is available to subscribers... Read More

The Ponzi Perpetrator’s Art Dealer? The Endless Scope of Clawback Claims
Posted on 9 Jul 2012 by Kathy Bazoian Phelps

Sheila Gowan, the trustee of Dreier, LLP ("DLLP"), has filed a fraudulent transfer action against Marc Dreier's personal art advisor, Heidi Lee, and her business, Heidi Lee Art Advisory. Gowan asserts that Marc Dreier caused DLLP to make... Read More

Couple Files Bankruptcy To Avoid Ponzi "Clawback" Lawsuit
Posted on 27 Aug 2013 by Jordan D. Maglich

A New Mexico couple facing the possible "clawback" of nearly $1 million from the largest Ponzi scheme in New Mexico history has filed for bankruptcy in a bid to avoid dodge the lawsuit. Mark and Maura Dahrling, of Albuquerque, New Mexico, were... Read More

Legislative Protection for Charities Caught by Ponzi Clawbacks
Posted on 16 Apr 2012 by Kathy Bazoian Phelps

On April 3, 2012, Minnesota Governor Mark Dayton signed a new law, Chapter 151, House File 1384, designed to protect nonprofits from having to pay back donations made by Ponzi perpetrators and other fraudulent sources. The new law actually restricts... Read More

Rothstein Trustee Files Clawbacks Seeking Funds Spent on Jewelry and Cars
Posted on 20 Oct 2011 by Jordan D. Maglich

Herbert Stettin, the bankruptcy trustee appointed to recover assets for the benefit of victims defrauded by Scott Rothstein's $1.4 billion Ponzi scheme, filed several more clawback suits seeking the return of funds spent by Rothstein on expensive... Read More

Taking Advantage of Stern v. Marshall in a Ponzi Scheme Case
Posted on 7 Jan 2013 by Kathy Bazoian Phelps

Clawback actions in Ponzi scheme cases may be a dime a dozen these days, but the issues now raised by the Supreme Court decision in Stern v. Marshall , __ U.S. __, 131 S. Ct. 2594 (2011), can become quite costly for those involved. In Stern v. Marshall... Read More

The Problem with Multiple Accounts in Ponzi Scheme Clawback Actions
Posted on 11 Aug 2014 by Kathy Bazoian Phelps

Can different but related account holders offset losses in one account against gains in another account? Can a husband and wife with separate accounts offset losses in one account against gains in the other? When there is a family trust, can the trustee... Read More

Update From Zeek Receiver Provides Insights Into Recovery, Clawbacks
Posted on 1 Aug 2013 by Jordan D. Maglich

The court-appointed receiver overseeing the recovery of funds for the $600 million ZeekRewards Ponzi scheme has filed his quarterly update (the "Update") with the court, providing interesting insight into asset recovery, litigation against so... Read More

New IRS Guidance for Ponzi Scheme Clawback Victims
Posted on 25 Oct 2012 by Kathy Bazoian Phelps

For investors who need help from the IRS on how to treat clawback payments made to trustees, the IRS has published a new webpage . So far the IRS has posted answers to two questions: 1. How does a taxpayer treat the repayment of a clawback... Read More

Charities: Proper Clawback Targets in Ponzi Scheme Cases?
Posted on 26 Mar 2012 by Kathy Bazoian Phelps

To gain valuable recognition, Ponzi perpetrators often make handsome contributions to charities. But those contributions create political difficulties for the trustees and receivers in evaluating whether to seek the return of those contributions on... Read More

Ponzi Scheme Trustee’s Claws Do Not Always Reach Overseas
Posted on 22 Jul 2014 by Kathy Bazoian Phelps

Bankruptcy trustees often sue to avoid and recover fraudulent transfers pursuant to the provisions of the Bankruptcy Code. These are often referred to as “clawback” actions. Transfers of property of a debtor may be avoided pursuant to section... Read More

Tiger Woods Foundation Faces $500,000 Clawback Suit From Stanford Receiver
Posted on 1 May 2014 by Jordan D. Maglich

The court-appointed receiver overseeing recovery of assets for Allen Stanford's massive $7 billion Ponzi scheme has filed a lawsuit seeking the return of more than $500,000 donated by Stanford to charitable organizations headed by golfer Tiger Woods... Read More

Eleventh Circuit Decides Important Ponzi Scheme Issues
Posted on 10 Jun 2014 by Kathy Bazoian Phelps

The Eleventh Circuit issued an opinion this week that has to make receivers happy. See Wiand v. Lee , 2014 U.S. App. LEXIS 10154 (11th Cir. Jun. 2, 2014) [ an enhanced version of this opinion is available to subscribers ]. Fraudulent transfer... Read More