Ponzi Claw Backs

[MrChips]

Jurisdiction

Ohio

I invested in what is a ponzi scheme. The schemer was charged and is a waiting trial that is suppose to happen next year. The schemer was also forced into Chapter 7 Involuntary bankruptcy which the order of relief is closing in on the 2 year mark, there is a Trustee who has been there since 2 week after the order of relief. He has filed numerous extension to object to the schemers relief and exemptions, the US Trustee has also filed for denial of discharge. The Feds have seized the schemers bank accounts and records and hasn't made them available to the trustee, and the schemer has never filed out any schedules and is pleading the 5th. There are other involved who also had plead the 5th but have since plead out and are awaiting sentencing however the Trustee has never tried to re interview them. The trustee has filed for the bankruptcy claims on all the things the feds froze bank accounts,property, etc. He has never attempted to sue anyone however there are a couple law suits filed by creditors against a bank and some trust companies. My question is once the 2 year statue of limitations is up is the Trustee now unable to file lawsuits for claw backs against those who might of made money. If the Trustee is unable to file lawsuits are the creditors able to sue those who made money or are they also barred under the statue of limitations.

 

[army judge]

If the Trustee is unable to file lawsuits are the creditors able to sue those who made money or are they also barred under the statue of limitations.

You can sue anyone for any alleged tortious act you believe harmed you.

However, defendants that discharged their debts in BK would be able to assert an affirmative defense as regards your pleadings.

Furthermore, the potential defendants you describe would either be incarcerated, on probation, or in forma pauperis (indigent, as in penniless) anyway.

Not much you can do, except what you've been doing, monitor the proceedinsg and hope someone makes a slip upon whuch you might be able to act.

Bottom line, victims of the scammers receive 2 or 3 pennies on the dollar, if they're lucky.

Most victims receive NOTHING.

 

[Mr.Chips]

You can sue anyone for any alleged tortious act you believe harmed you.

However, defendants that discharged their debts in BK would be able to assert an affirmative defense as regards your pleadings.

Furthermore, the potential defendants you describe would either be incarcerated, on probation, or in forma pauperis (indigent, as in penniless) anyway.

Not much you can do, except what you've been doing, monitor the proceedinsg and hope someone makes a slip upon whuch you might be able to act.

Bottom line, victims of the scammers receive 2 or 3 pennies on the dollar, if they're lucky.

Most victims receive NOTHING.

I don't believe the schemer is going to be able to discharge the debts and I am sure that there is no more money then what has been frozen to take. I am just wondering if the Trustee is going to be barred from filing claw back suits against those who received back more then they invested since the 2 year statue of limitations is up in the bankruptcy or does the Trustee allowed more time to file the claw backs on those who made money even though they were innocent investors.. If there is not going to be any claw backs I am better off just writing the loss off on my taxes since what has been frozen would be like you wrote 2 or 3 pennies on the dollar if that. With no claw backs no need to wait another year to take advantage of the loss on my taxes.

 

[army judge]

If you need tax advice, I suggest you consult a CPA or a tax attorney.

 

[despritfreya]

I saw your post at findlaw but since I rarely frequent the forum did not respond. If this link works (may have to cut and paste), please read:

https://www.ohnb.uscourts.gov/sites/default/files/opinions/a9r6a00.pdf

Post back if you are unable to get to the decision.

Please be mindful that this is just one opinion and may or may not be that of the judge in your situation. Also note that since bk court is a court of equity judges have great latitude under 11 USC 105 to implement the spirit of the law.

Des

 

[Mr.Chips]

If you need tax advice, I suggest you consult a CPA or a tax attorney.

I don't need tax advise already have that it just comes down to choices and if there are not going to be claw backs there is no money to recover and no choices to make tax wise. I just wanted to see if the door was shut on claw backs so my choice has been made for me.

 

[Mr.Chips]

I saw your post at findlaw but since I rarely frequent the forum did not respond. If this link works (may have to cut and paste), please read:

https://www.ohnb.uscourts.gov/sites/default/files/opinions/a9r6a00.pdf

Post back if you are unable to get to the decision.

Please be mindful that this is just one opinion and may or may not be that of the judge in your situation. Also note that since bk court is a court of equity judges have great latitude under 11 USC 105 to implement the spirit of the law.

Des

Thanks for that, I hope I am understanding the ruling right that it can be extended however upon reading it appears that they would have to apply for a extension before the 2 year expiration or do you think that is a moot point?

 

[adjusterjack]

If you write it off on your taxes now you can always reverse it later if you end up getting some money back.

Besides, you have until April 15, 2017 to decide what to do on your 2016 taxes.

 

[Mr.Chips]

If you write it off on your taxes now you can always reverse it later if you end up getting some money back.

Besides, you have until April 15, 2017 to decide what to do on your 2016 taxes.

It more complicated then reversing my 2016 taxes, claw backs change the way I handle the loss. It also helps those I know who are also investors who either made money or lost it move forward after dealing with this for more then 2 years. Des's link does show you can extend the statue of limitations the question now is does this have to been done before the expiration of the 2 years.

 

[despritfreya]

. . . however upon reading it appears that they would have to apply for a extension before the 2 year expiration or do you think that is a moot point?

Possibly the Motion to Extend would have to be filed prior to the end of the two years. Look back at the case posted. It directs you to Rule 9006(b)(1):

"the court for cause shown may at any time in its discretion (1) with or without motion or notice order the period enlarged if the request therefor is made before the expiration of the period originally prescribed or as extended by a previous order. . .

Des.