LexisNexis® Legal Newsroom
Is the “Ponzi Scheme Presumption” Expanding into New Territory?

Most courts endorse and affirm the use of the "Ponzi scheme presumption" against recipients of transfers from the Ponzi debtor. These courts hold that, in an actual fraudulent transfer case, the transferor's fraudulent intent is presumed if the trustee establishes that the transferor...

The Ponzi Scheme Presumption: Equal Application to Investors, Employees and Charities?

The Ponzi scheme presumption can establish that a transferor made a transfer of property with the actual intent to hinder, delay, or defraud creditors of the debtor. See Phelps and Rhodes, The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes , § 2.03[1] (citing cases). Some courts have...

Expanded Scope of Ponzi Scheme Presumption Upheld on Appeal

Over the past few years, we’ve watched as courts have expanded and retracted the use of the Ponzi scheme presumption. One of the broader expansions of the presumption resulted from a decision in the Thomas Petters Ponzi scheme in Stoebner v. Ritchie Capital Management, L.L.C. ( In re Polaroid Corp...