DOCSLIB.ORG

Includes: Petters Group

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Includes: Petters Group Case 08-45257 Doc 472 Filed 09/20/10 Entered 09/20/10 13:04:41 Desc Main Document Page 1 of 11 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re Jointly Administered under Case No. 08-45257 Petters Company, Inc., et al., Court File No. 08-45257 Debtors. Court File Nos.: (includes: Petters Group Worldwide, LLC; 08-45258 (GFK) PC Funding, LLC; 08-45326 (GFK) Thousand Lakes, LLC; 08-45327 (GFK) SPF Funding, LLC; 08-45328 (GFK) PL Ltd., Inc.; 08-45329 (GFK) Edge One LLC; 08-45330 (GFK) MGC Finance, Inc.; 08-45331 (GFK) PAC Funding, LLC; 08-45371 (GFK) Palm Beach Finance Holdings, Inc.) 08-45392 (GFK) Chapter 11 Cases Judge Gregory F. Kishel REPLY TO POLAROID ENTITIES’ OBJECTION TO MOTION TO APPROVE SETTLEMENT AGREEMENT AND MUTUAL RELEASE The Trustee, by and through his counsel, respectfully submits this reply to the Polaroid Entities’ Objection to Motion to Approve Settlement Agreement and Mutual Release. The Trustee respectfully requests this Court overrule such objection and grant the Trustee’s Motion. Capitalized terms not defined herein are the same as those used in the Trustee’s Motion, unless the context requires otherwise. BACKGROUND In June of 2008, as the fraudulent Ponzi Scheme was collapsing around him, Tom Petters submitted applications for the D&O Policies. As part of the PGW Policy application, Tom Petters, on behalf of Polaroid, obtained for coverage for Polaroid as an additional insured under Case 08-45257 Doc 472 Filed 09/20/10 Entered 09/20/10 13:04:41 Desc Main Document Page 2 of 11 the PGW Policy. The application submitted by Petters to induce the Insurers to issue the PGW Policy included a consolidated financial statement for PGW and its subsidiaries, including Polaroid and its subsidiaries. Since the Civil Fraud Case and the Criminal Fraud Case began, officers, directors and employees of PGW have incurred actual and substantial costs in excess of $3 million for which such individuals will assert claims against these Debtors’ estates. To date, the Insurers have reimbursed a substantial portion of such costs and expenses, with the District Court reviewing the professionals’ fees, approving reasonable and necessary costs and expenses, and directing the Receiver to seek reimbursement for such professional fees under the D&O Policies. Until Petters’ conviction, claims were provisionally paid by the Insurers under the D&O Policies. Now that Petters’ intentionally dishonest conduct has been determined by a final adjudication (a jury verdict), the Insurers demand the return of more than $2.3 million that they have already paid under the D&O Policies and will not pay for more than $1 million in additional fees and expenses approved by the District Court. The Trustee and his professionals have evaluated the risks in litigating whether there is coverage under the D&O Policies and believes the Settlement Agreement provides substantial benefit to these estates. The Settlement Agreement provides that more than $3.2 million of Petters’ defense costs incurred to date not reimbursed by the Debtors will be reimbursed by the Insurers, and the individuals other than Tom Petters will retain the ability to seek coverage for additional costs and expenses not reimbursed by the Debtors. In return, the Debtors are releasing claims for reimbursement of costs that the company may be obligated reimburse individual directors and officers in the future, as well as costs directly incurred by the Debtors for future claims against the companies. The Settlement Agreement is a practical and reasonable 2 Case 08-45257 Doc 472 Filed 09/20/10 Entered 09/20/10 13:04:41 Desc Main Document Page 3 of 11 compromise that provides for the payment of expenses actually incurred and potentially covered under the D&O Policies and allows additional claims to be submitted by Individual Insureds. The Receiver’s entry into the Settlement Agreement was recently approved by the District Court on September 17, 2010. Order Granting Motion for Approval of Settlement Agreement and Mutual Release, Civil Fraud Case, 08-cv-5348, Dkt. 1471, a true and correct copy of which is attached hereto as Exhibit 1. The District Court thanked the Parties for reaching a compromise that will provide coverage for, and the reimbursement of, certain professional fees incurred in these cases. ARGUMENT The Polaroid Trustee asks this Court to force the Trustee to ‘roll the dice’ and risk subjecting PGW creditors with more than $3.2 million dollars of costs if the Insurers prevail in coverage litigation in the event potential claims that may be asserted against the Polaroid Estates evolve at some point in the future into cognizable claims that could possibly be entitled to coverage under the D&O Policies. The Settlement Agreement is a reasonable resolution of complex, inter-twined claims that is in the best interest of creditors and victims of Petters Ponzi Scheme. The consequence of not approving the Settlement Agreement will be disastrous to these same creditors and victims. A. The Settlement Agreement must be approved as written. The Polaroid Trustee asks this court to re-write the agreement reached between the parties affected by the settlement. In exercising its discretion to approve a proposed settlement, the Court must either approve or refuse to approve the proposed settlement as written. In re Trism, Inc., 282 B.R. 662, 667 (B.A.P. 8th Cir. 2002). An abuse of discretion occurs when the 3 Case 08-45257 Doc 472 Filed 09/20/10 Entered 09/20/10 13:04:41 Desc Main Document Page 4 of 11 court does not determine and weigh these factors and either approve or reject the proposed settlement. Id. The Settlement Agreement is a reasonable compromise of substantial claims in these cases that is in the best interest of creditors and should be approved by this Court. Without this Settlement Agreement, the Insurers will proceed with litigation to determine whether there is coverage at all under the D&O Policies, at substantial cost to these estates and carrying a significant risk there may be no coverage at all for any insured, and $2.3 million of costs and expenses paid to date will be returned to the Insurers and an additional $1 million of costs that would be paid by the Insurers pursuant to the Settlement Agreement will become obligations of these estates. The Polaroid Entities provide no alternative to this Settlement Agreement that would provide any protection to these Estates. This Settlement Agreement is a reasonable compromise and should be approved. B. The Settlement Agreement Resolves a Current Dispute, Not Claims That May ‘Evolve.’ The Settlement Agreement resolves substantial claims against PCI and PGW that are real, are pending now, and are in excess of $3 million. The PCI and PGW estates have not incurred substantial liabilities for defense costs incurred by Covered Individuals under the Policies because such costs and expenses have been provisionally paid by the Insurers, with such costs being potential administrative claims in these cases. Absent the Settlement Agreement, there is substantial risk that the PCI and PGW estates may become obligated for more than $3 million in additional costs and claims. The Settlement Agreement resolves these real claims and disputes, involving known and present claims, for which real dollars have been paid under the D&O Policies. 4 Case 08-45257 Doc 472 Filed 09/20/10 Entered 09/20/10 13:04:41 Desc Main Document Page 5 of 11 The Polaroid Trustee does not assert a current claim for payment under the Policies; he is simply concerned about yet to be determined claims that may ‘evolve’ at some point in the future into a claim, which will be subject to the same policy defenses and exclusions asserted by the Insurers today. The Insurers have denied coverage for the claims the Polaroid Entities have asserted to date. The Settlement Agreement, however, does not eliminate coverage altogether, as the Individual Insureds retain the ability to seek coverage for unreimbursed defense costs under the D&O Policies, subject to all available defenses of the Insurers under the D&O Policies. C. Polaroid is not an Innocent Insured. Petters purchased Polaroid to “bury the debt” created by the Ponzi Scheme and give himself increased credibility to investors. Petters appointed himself chairman and sole board member of Polaroid and repeatedly used Polaroid assets to lure prospective investors to invest in the Ponzi Scheme. Petters used Polaroid as a personal piggy bank, taking cash from Polaroid to further the Ponzi Scheme and treated Polaroid as an extension of himself. As a result, Polaroid was integral to the ‘success’ of the Ponzi Scheme. Petters was Polaroid, and any statements made by Petters on behalf of Polaroid, including those made in providing financial information in applications to obtain coverage under the D&O Policies, are statements of Polaroid that may void the Policy with respect to Polaroid. D. Consequence to Non-Approval is Disastrous. The Settlement Agreement resolves current claims for which actual costs and expenses have been incurred. If not approved, the Insurers will proceed with their pending coverage action to declare the D&O Policies void and to recover the $2.3 million paid to date, as well as not reimbursing an additional $1 million in additional costs and expenses incurred that will be reimbursed if the Settlement Agreement is approved. If this more than $3 million in costs and 5 Case 08-45257 Doc 472 Filed 09/20/10 Entered 09/20/10 13:04:41 Desc Main Document Page 6 of 11 expenses is not reimbursed by the Insurers, the PCI and PGW estates, and their creditors, will bear the burden of these claims.
Load more

Recommended publications
  • H:\News Releases\Sept. 2010\091510.White Sentenced2.Wpd
    United States Department of Justice United States Attorney’s Office District of Minnesota B. Todd Jones, United States Attorney News Release Jeanne F. Cooney Director of Community Relations (612) 664-5611 email: [email protected] FOR IMMEDIATE RELEASE Wednesday, September 15, 2010 WWW.USDOJ.GOV/USAO/MN Robert White Sentenced for Role in Petters’ $3.7 Billion Ponzi Scheme The 69-year-old Excelsior man who assisted Wayzata businessman Tom Petters in orchestrating a $3.7 billion Ponzi scheme was sentenced today in federal court in St. Paul. United States District Court Judge Richard H. Kyle sentenced Robert Dean White to 60 months in prison on one count of mail fraud and one count of money laundering. White was charged on September 30, 2008, and pleaded guilty on October 8, 2008. Petters, age 53, was sentenced in April of this year to 50 years in prison for operating the Ponzi scheme for more than ten years. He presently is incarcerated in the federal penitentiary in Leavenworth, Kansas. In his plea agreement, Robert White admitted that, at the direction of Petters, he fabricated documents to make it appear to Petters Company, Inc. (“PCI”), investors that the company was purchasing merchandise from two suppliers, when, in fact, that was not the case. White also admitted creating documents to make it appear that PCI then sold that merchandise to big-box retail stores. In reality, however, no merchandise was purchased or sold. Instead, most of the funds were wired back to PCI for use in furthering the fraud scheme and supporting the lavish lifestyle of Tom Petters.
    [Show full text]
  • Joint Appendix (Volume 2 of 2) -- Ritchie Capital Management, LLC V. Costco (Second Circuit).Pdf
    Case 15-3294, Document 40, 01/29/2016, 1694672, Page1 of 154 15-3294-cv United States Court of Appeals for the Second Circuit RITCHIE CAPITAL MANAGEMENT, L.L.C., RITCHIE CAPITAL MANAGEMENT, LTD., RITCHIE SPECIAL CREDIT INVESTMENTS, LTD., Plaintiffs-Appellants, – v. – COSTCO WHOLESALE CORPORATION, Defendant-Appellee. –––––––––––––––––––––––––––––– ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK JOINT APPENDIX Volume 2 of 2 (Pages A-166 to A-314) GREGG L. WEINER ALEXANDRA A.E. SHAPIRO ADAM M. HARRIS CYNTHIA S. ARATO ROPES & GRAY LLP FABIEN THAYAMBALLI 1211 Avenue of the Americas SHAPIRO ARATO LLP New York, New York 10036 500 Fifth Avenue, 40th Floor (212) 596-9000 New York, New York 10110 (212) 257-4880 Attorneys for Defendant-Appellee – and – LEO V. LEYVA JAMES T. KIM COLE SCHOTZ P.C. 1325 Avenue of the Americas, 19th Floor New York, New York 10019 (212) 752-8000 Attorneys for Plaintiffs-Appellants Case 15-3294, Document 40, 01/29/2016, 1694672, Page2 of 154 i TABLE OF CONTENTS Page District Court Docket Entries .................................... A-1 Transcript of Proceedings of the Honorable Vernon S. Broderick, dated October 10, 2014 .................... A-9 First Amended Complaint, dated October 17, 2014 .. A-20 Exhibit A to Complaint - Letter from GECC to Costco, dated October 23, 2000 ................................................... A-56 Exhibit B to Complaint - Letter from Petters to Costco, dated October 24, 2000 ................................................... A-58 Exhibit C to Complaint - E-mail from David Baer, dated February 14, 2007 .................................................. A-60 Declaration of Adam M. Harris, in Support of Costco Wholesale Corporation’s Motion to Dismiss the First Amended Complaint, dated November 13, 2014 ..............................................
    [Show full text]
  • United States Bankruptcy Court District of Minnesota
    UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA ************************************************************************************************************ In re: JOINTLY ADMINISTERED UNDER CASE NO. 08-45257 PETTERS COMPANY, INC., ET AL, Court File No. 08-45257 Debtors. Court File Nos: (includes: Petters Group Worldwide, LLC; 08-45258 (GFK) PC Funding, LLC; 08-45326 (GFK) Thousand Lakes, LLC; 08-45327 (GFK) SPF Funding, LLC; 08-45328 (GFK) PL Ltd., Inc. 08-45329 (GFK) Edge One LLC; 08-45330 (GFK) MGC Finance, Inc.; 08-45331 (GFK) PAC Funding, LLC; 08-45371 (GFK) Palm Beach Finance Holdings, Inc.) 08-45392 (GFK) Chapter 11 Cases Judge Gregory F. Kishel ************************************************************************************************************ THIRD MEMORANDUM ON “CONSOLIDATED ISSUES” TREATMENT OF MOTIONS FOR DISMISSAL IN TRUSTEE’S LITIGATION FOR AVOIDANCE AND RECOVERY: AVOIDABILITY AND ACTIONABILITY UNDER LAW AND IN EQUITY; ONE LAST ISSUE OF PLEADING. ************************************************************************************************************ At St. Paul, Minnesota September 30, 2013. PREFACE This is the third (and last) memorandum of general rulings to be entered, as the basis for the disposition of pending motions for dismissal in a docket of adversary proceedings in these cases. This litigation was commenced to redress the failure of a massive Ponzi scheme conducted by one Thomas J. Petters--the largest case of investor fraud in Minnesota history and one of the largest in United States history. NOTICE OF ELECTRONIC ENTRY AND FILING ORDER OR JUDGMENT Filed and Docket Entry made on 09/30/2013 Lori Vosejpka, Clerk, By JRB, Deputy Clerk The Debtors in these cases were all entities in Tom Petters’s enterprise structure. The plaintiff is the Trustee for the Debtors’ bankruptcy estates. He commenced the litigation to avoid a large number of pre-petition transfers of funds by the Debtors, and to recover money judgments to effectuate the avoidance.
    [Show full text]
  • Appellees Brief
    Appellate Case: 10-1843 Page: 1 Date Filed: 11/02/2010 Entry ID: 3720024 No. 10-1843 Criminal In the UNITED STATES COURT OF APPEALS For the Eighth Circuit UNITED STATES OF AMERICA, APPELLEE, v. THOMAS JOSEPH PETTERS, APPELLANT. Appeal from the United States District Court for the District of Minnesota BRIEF OF APPELLEE B. TODD JONES United States Attorney JOSEPH T. DIXON, III JOHN R. MARTI TIMOTHY C. RANK Assistant U.S. Attorneys District of Minnesota 600 U.S. Courthouse 300 South Fourth Street Minneapolis, MN 55415 (612) 664-5600 Attorneys for Appellee Appellate Case: 10-1843 Page: 2 Date Filed: 11/02/2010 Entry ID: 3720024 SUMMARY OF THE CASE Defendant Thomas Joseph Petters was the sole owner and chief executive officer of a small company Petters Company, Inc. (“PCI”). PCI was used to perpetrate a multi-billion dollar Ponzi scheme. Petters acknowledged that he furthered the scheme, but claimed he did so unknowingly. His defense: there was a 15-year conspiracy to enrich Tom Petters with hundreds of millions of dollars without Tom Petters knowing. The defense was as brash and unsubstantiated as the Ponzi scheme itself. The evidence against him was overwhelming. On appeal, defendant argues the district court erred (i) by denying his motion to change venue; (ii) by precluding the defendant in pretrial proceedings from specifically identifying a potential witness as a participant in the WitSec Program and from publishing sensitive WitSec Program files through court filings; (iii) by limiting cross-examination to admissible testimony; (iv) by failing to provide the exact wording of his theory-of-defense instruction and denying an unsupported advice-of-counsel instruction; and (v) by sentencing the defendant to fifty years, when his guideline was life imprisonment.
    [Show full text]
  • Hedge Funds for Investors
    Chapter 6 Individual Factors: Moral Philosophies and Values Frauds of the Century Ponzi vs. Pyramid Schemes Ponzi scheme: A type of white-collar crime that occurs when a criminal—often of high repute— takes money from new investors to pay earnings for existing investors. The money is never actually invested and, when the scheme finally collapses, newer investors usually lose their investments. Ponzi vs. Pyramid Schemes Ponzi scheme: This type of fraud is highly detrimental to society Huge financial impact Displaces consumer trust in business. Despite the high-profile cases like Bernard Madoff, Tom Petters, and R. Allen Stanford, Ponzi schemes continue to be used in any industry that includes investing. Ponzi vs. Pyramid Schemes Pyramid scheme: Offers an opportunity for an individual to make money that requires effort. Usually this is in the form of an investment, business, or product opportunity This type of fraud is highly detrimental to society. The first person recruited then sells or recruits more people, and a type of financial reward is given to those who recruit the next participant. Ponzi vs. Pyramid Schemes Pyramid scheme: The key aspect of a pyramid scheme is that people pay for getting involved. Each new individual or investor joins in what is believed to be a legitimate opportunity to get a return, which is how the fraudster gets money. Unlike a legitimate organization, pyramid schemes either do not sell a product, or the investment is almost worthless. All income comes from new people enrolling. Ponzi vs. Pyramid Schemes Pyramid scheme: Direct selling businesses that employ a multilevel marketing compensation system are often accused of being pyramid schemes because of similarities in business structure, although multilevel marketing is a compensation method that involves selling a legitimate product.
    [Show full text]
  • SEC Complaint
    CASE 0:11-cv-00723-JRT -SER Document 1 Filed 03/24/11 Page 1 of 39 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA _______________________________________ : UNITED STATES SECURITIES : AND EXCHANGE COMMISSION, : : Plaintiff, : : v. : Civil Action No. : MARLON QUAN, ACORN CAPITAL : GROUP, LLC and STEWARDSHIP : INVESTMENT ADVISORS, LLC, : : Defendants, : : and : : ASSET BASED RESOURCE : GROUP, LLC and FLORENE QUAN, : : Relief Defendants. : : COMPLAINT Plaintiff United States Securities and Exchange Commission (“Commission”) alleges as follows: NATURE OF THE ACTION 1. The Commission brings this law enforcement action in the public interest to remedy a massive fraud. The primary defendant is Marlon Quan, a Connecticut hedge fund manager who funneled hundreds of millions of dollars to Thomas Petters and his CASE 0:11-cv-00723-JRT -SER Document 1 Filed 03/24/11 Page 2 of 39 notorious Ponzi scheme. The other defendants are Acorn Capital Group, LLC (“Acorn”) and Stewardship Investment Advisors, LLC (“Stewardship IA”), two closely-held companies which Quan utilized to manage several hedge funds and perpetrate his fraud. Relief Defendant Asset Based Resource Group, LLC (“ABRG”) is a successor entity to Acorn. Relief Defendant Florene Quan is the wife of Defendant Marlon Quan. 2. From 1995 to September 2008, Thomas J. Petters perpetrated a massive Ponzi scheme through the sale of promissory notes (“Notes) to investors, many of which were private, unregistered hedge funds. Petters represented to investors that he used their funds to finance the purchase of merchandise for re-sale to “big box” retailers such as BJ’s Warehouse, Wal-Mart, and Costco (“Retailers”). In reality, Petters misappropriated the investors’ money to pay fictitious returns to previous investors and to pay his own business and personal expenses.
    [Show full text]
  • Pyramid Schemes: Will Ponzi Always Succeed Against Regulators?
    Department of Economics and Finance Thesis on Financial Markets and Institutions Pyramid Schemes: Will Ponzi Always Succeed Against Regulators? Supervisor Candidate: Prof. Gianni Nicolini Andrea Peracino ID: 215821 Academic Year 2018/2019 1 Pyramid Schemes: Will Ponzi Always Succeed Against Regulators? (Andrea Peracino) INDEX Introduction ............................................................................................. 3 Chapter 1 .................................................................................................. 5 1. Pyramid Schemes: Threats to Financial Markets ............. 5 1.1. Origins and Most Striking Cases .................................................. 5 1.2. Actions, Targets and Victims of Pyramid Schemes ..................... 8 1.3. Ponzi and Financial Crisis .......................................................... 15 1.4. Inefficiency and Losses Given to the Market ............................. 16 Chapter 2 ................................................................................................ 18 2. Market Regulators Vs Pyramid Schemes ........................... 18 2.1. History of Regulations applied to Ponzi Scheme ....................... 18 2.2. How Regulators Act: Detection and Taken Measures ............... 20 2.3. Strength and Weaknesses: are regulations preventive or curative? .................................................................................................... 24 2.4. Why Ponzi Schemes use to succeed ........................................... 28 Chapter 3 ...............................................................................................
    [Show full text]
  • H:\News Releases\April 2010\040810.Petters Sentenced2
    United States Department of Justice United States Attorney’s Office District of Minnesota B. Todd Jones United States Attorney News Release Jeanne F. Cooney Director of Community Relations (612) 664-5611 email: [email protected] FOR IMMEDIATE RELEASE Thursday, April 8, 2010 WWW.USDOJ.GOV/USAO/MN Tom Petters sentenced to 50 years in federal prison for orchestrating $3.7 billion Ponzi scheme MINNEAPOLIS – Thomas Joseph Petters, age 52, of Wayzata, has been sentenced to 50 years in federal prison for orchestrating a $3.7 billion Ponzi scheme. The sentence, imposed by U.S. District Court Judge Richard H. Kyle earlier this morning in St. Paul, represents the longest term of imprisonment ever ordered in a financial fraud case in Minnesota history. In ordering the prison term, Judge Kyle said, “I’m not satisfied that if he were released early, he wouldn’t re- offend.” Following a month-long trial, Petters was convicted on December 2, 2009, of ten counts of wire fraud, three counts of mail fraud, one count of conspiracy to commit mail and wire fraud, one count of conspiracy to commit money laundering, and five counts of money laundering. Today, while referring to the lack of believability in Petters’s trial testimony, Judge Kyle said, “It just didn’t pass the smell test.” After the sentencing, U.S. Attorney B. Todd Jones said, “For years Tom Petters built his life on the shattered dreams of others. Minnesotans need to be reminded there are thousands of entrepreneurs in our state who are grounded in community values, give generously to charity, act as true mentors to other business people, are ethical stewards of investors, and grow good jobs.
    [Show full text]
  • Independent Studies in Forensic Accounting: Some Practical Ideas Diane Matson University of St
    University of St. Thomas, Minnesota UST Research Online Accounting Faculty Publications Accounting 2016 Independent Studies in Forensic Accounting: Some Practical Ideas Diane Matson University of St. Thomas, Minnesota, [email protected] Follow this and additional works at: https://ir.stthomas.edu/ocbacctpub Part of the Accounting Commons Recommended Citation Matson, Diane, "Independent Studies in Forensic Accounting: Some Practical Ideas" (2016). Accounting Faculty Publications. 70. https://ir.stthomas.edu/ocbacctpub/70 This Article is brought to you for free and open access by the Accounting at UST Research Online. It has been accepted for inclusion in Accounting Faculty Publications by an authorized administrator of UST Research Online. For more information, please contact [email protected]. Journal of Forensic & Investigative Accounting Volume 8: Issue 2, Special Issue, 2016 Independent Studies in Forensic Accounting: Some Practical Ideas Diane M. Matson∗ Forensic accounting is a discipline that combines knowledge and skill from accounting, auditing, loss prevention, and law enforcement. Forensic accountants prevent and detect financial fraud. Fraud involves an intentional misstatement, knowledge of that misstatement, and intent to deceive. Forensic accounting has to do with an investigation and preparing documents and records for possible legal action in the judicial system, including a trial in a court of law. Fraud investigations may be viewed as broader than forensic accounting, but usually involve some forensic accounting. There are many career opportunities in fraud auditing, forensic accounting, and fraud investigations. People with different professional backgrounds are involved in these careers. For example, accountants, auditors (internal and external), attorneys, police investigators, and private investigators may all be involved with forensic accounting and fraud investigations.
    [Show full text]
  • Asset Forfeiture and Money Laundering Law
    DEPARTMENT OF JUSTICE JOURNAL OF FEDERAL LAW AND PRACTICE Volume 67 September 2019 Number 3 Acting Director Corey F. Ellis Editor-in-Chief Christian A. Fisanick Managing Editor Sarah B. Nielsen Associate Editor Gurbani Saini Law Clerks Joshua Garlick Emily Lary Mary Harriet Moore Niki Patel United States The Department of Justice Journal of Department of Justice Federal Law and Practice is published by Executive Office for the Executive Office for United States United States Attorneys Attorneys Washington, DC 20530 Office of Legal Education Contributors’ opinions and 1620 Pendleton Street statements should not be Columbia, SC 29201 considered an endorsement by Cite as: EOUSA for any policy, 67 DOJ J. FED. L. & PRAC., no. 3, 2019. program, or service. Internet Address: The Department of Justice Journal https://www.justice.gov/usao/resources/ of Federal Law and Practice is journal-of-federal-law-and-practice published pursuant to 28 C.F.R. § 0.22(b). Page Intentionally Left Blank Asset Forfeiture and Money Laundering In This Issue Introduction ........................................................................................ 1 By Corey F. Ellis Civil Asset Forfeiture: Purposes, Protections, and Prosecutors .................................................................................. 3 By Money Laundering and Asset Recovery Section The Post-Honeycutt Landscape of Asset Forfeiture .................. 33 By Sonja Ralston and Michael Anthony Fazio Financial Tracing in Asset Forfeiture Cases .............................. 65 By Sean Michael Welsh Money Moves: Following the Money Beyond the Banking System ................................................................................ 95 By Elizabeth Boison and Leo Tsao The Intersection of State and Federal Law in Asset Forfeiture Cases: Concurrent Jurisdiction, Turnover Orders, and Emerging State Law Trends ............... 127 By Curt Bohling, Alice W. Dery, and Carly Diroll-Black Forfeiting Cryptocurrency: Decrypting the Challenges of a Modern Asset ....................................................
    [Show full text]
  • Expanding the Ponzi Scheme Presumption
    Digital Commons at St. Mary's University Faculty Articles School of Law Faculty Scholarship 2015 Expanding the Ponzi Scheme Presumption David R. Hague St. Mary's University School of Law, [email protected] Follow this and additional works at: https://commons.stmarytx.edu/facarticles Part of the Law Commons Recommended Citation David R. Hague, Expanding the Ponzi Scheme Presumption, 64 DᴇPᴀᴜʟ L. Rᴇᴠ. 867 (2015). This Article is brought to you for free and open access by the School of Law Faculty Scholarship at Digital Commons at St. Mary's University. It has been accepted for inclusion in Faculty Articles by an authorized administrator of Digital Commons at St. Mary's University. For more information, please contact [email protected]. DePaul Law Review Volume 64 Issue 3 Spring 2015: Twenty-Fourth Annual DePaul Law Review Symposium, Building the Solution: Article 5 Connecting the Pieces of of Mental Health Law to Improve Mental Health Services Expanding the Ponzi Scheme Presumption Dave R. Hague South Texas College of Law, [email protected] Follow this and additional works at: http://via.library.depaul.edu/law-review Recommended Citation Dave R. Hague, Expanding the Ponzi Scheme Presumption, 64 DePaul L. Rev. (2015) Available at: http://via.library.depaul.edu/law-review/vol64/iss3/5 This Article is brought to you for free and open access by the College of Law at Via Sapientiae. It has been accepted for inclusion in DePaul Law Review by an authorized administrator of Via Sapientiae. For more information, please contact [email protected], [email protected]. EXPANDING THE PONZI SCHEME PRESUMPTION David R.
    [Show full text]
  • Cleaning up in the Wake of a Ponzi Scheme: Insurance Coverage for Financial Crime Claims Contributed by Mary-Pat Cormier and Alexander G
    February 27, Fidelity Insurance 2012 Employee Dishonesty Coverage Cleaning up in the Wake of a Ponzi Scheme: Insurance Coverage for Financial Crime Claims Contributed by Mary-Pat Cormier and Alexander G. Henlin, Edwards Wildman Palmer LLP When a tsunami’s waves recede, they leave behind the flotsam and jetsam that have been caught in their tumultuous path. So too with global financial crises. When the waters of the global financial tidal wave of 2008 receded, they revealed and left in their wake all manner of risky, ill-advised, and downright illegal financial schemes and scams. Among those most colorful and destructive are the Ponzi schemes, big and small, that were caught in the net of law enforcement officials, regulators, bankruptcy trustees, and plaintiffs’ counsel. By now, so much has been written about the mechanics of the biggest Ponzi schemes and their perpetrators’ successful efforts to avoid detection by the Securities and Exchange Commission that those interested in the details may find a wealth of information. Bernard Madoff’s scheme is one that lingers in the public imagination, to say nothing of separate schemes perpetrated by Robert Allen Stanford, Tom Petters, Scott Rothstein, Marc Dreier, Barry Tannenbaum, Beau Diamond, and Danny Pang. One of the most important topics in connection with these schemes and restitution for them are the powers and prosecutions of the various bankruptcy trustees. As those trustees’ claw-back efforts have targeted banks and pension funds, those targets have asserted claims against their fund managers, investment advisers, accountants, and others that steered investments to various Ponzi schemes. Those defendants, in turn, are making demands upon their insurers for a defense against the claims, as well as indemnification.
    [Show full text]