Ninth Circuit Allows Recovery Of Investor Referral Fees Paid In $120 Million Ponzi Scheme

A federal appeals court has ordered that a receiver can recover referral fees paid to a Ponzi scheme investor who referred friends and family to the scheme because those referral services did not provide value to the scheme.  The U.S. Court of Appeals for the Ninth Circuit issued a decision in Hoffman v. Markowitz affirming the district court's previous award of partial summary judgment in favor of the court-appointed receiver over Nationwide Automated Systems, Inc. (NASI).  While the Ninth Circuit declined to find that the referral fees are "per se voidable" and issued an unpublished opinion, the decision may provide a template for receivers to pursue similar fees in ongoing and future actions. The Scheme NASI raised more than $120 million from roughly 2,000 investors with the promise of guaranteed returns of 20% for each automated teller machine (ATM) an investor purportedly purchased and leased back to the company.  Each investor…

Read more detail on Recent Banking and Finance Law posts –

Related news:

This entry was posted in Banking and Finance law and tagged , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply