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OldShooter 04-29-2021 11:10 AM

Quote:

Originally Posted by ExFlyBoy5 (Post 2599544)
Only argument I would put out there that until the OP is actually SERVED (meaning being sued) they I wouldn't pay for an attorney outside of initial consultation. A demand letter is just that...a letter.

IANAL, so I donít' know if this is the correct approach or not. Preemptive moves, including a harsh response, might be advised. A knowledgeable lawyer reading the court documents might suggest other tactical moves as well. This situation is not one where I'd try to save a buck at the front end.

ivinsfan 04-29-2021 11:22 AM

Quote:

Originally Posted by Retireby45ish (Post 2599494)
Thanks for the thoughts so far everyone. This has been a very sad, scary and difficult few years as the courts attempt to settle this mess.


Yes this has a lot of moving pieces so sorry for confusing.

I booked a 100k gain over 5 years.

I then swapped that money out and invested instead (using non comingled funds) through an IRA account I had for about the same $$ amt. (This happened in a week of one another.)

And yes, I canít deduct the loss for tax purposes since it happened in IRA. This was the worst of both worlds.

They have appointed a court receiver who has hired a law firm to track down this part of the funds money for investors. They have tracked down and paid out about 20% of the investment (through other avenues already) and are only expecting 5-10% more at best by these remaining types of claw backs.

The key killer for me was that they are treating these as separate accounts even though they said they would group gains and losses by ďtaxpayer IdĒ. I would think my IRA and my taxable accounts have same taxpayer Id (SSN) but they are saying otherwise. !!


Your posts are so confusing, are you saying they returned 60K to you or they will return 60K, I cant figure it out. What is your actual financial damage to this point using your 200+100K number..and what might you still stand to get back.

gayl 04-29-2021 11:29 AM

Quote:

Originally Posted by audreyh1 (Post 2599543)
Crazy, crazy situation! Horrible to find yourself duped by a pyramid scheme. And then dealing with claw backs. What do do other than hire an accountant and a lawyer to advise me through this mess?

+1. I think that might help OP sort through what he actually made / lost / owes / if this is for real or a shakedown.

FWIW I have no experience in something like this bc I have only invested through Fido - Schwab - Hartford (thats where my 457 was until retirement)

ExFlyBoy5 04-29-2021 11:31 AM

Quote:

Originally Posted by OldShooter (Post 2599550)
IANAL, so I don’t' know if this is the correct approach or not. Preemptive moves, including a harsh response, might be advised. A knowledgeable lawyer reading the court documents might suggest other tactical moves as well. This situation is not one where I'd try to save a buck at the front end.

Well, I *am* licensed as one (arguably a recovering one) :) and I am not saying to *not* lawyer up. With something this complex, especially if it involves a lot of parties and the federal court, the retainer will be enormous. Paying for an hour of time to get a consult from a reputable FEDERAL practitioner is prudent, however.

Retireby45ish 04-29-2021 11:42 AM

Investment nightmare
 
Quote:

Originally Posted by ivinsfan (Post 2599562)
Your posts are so confusing, are you saying they returned 60K to you or they will return 60K, I cant figure it out. What is your actual financial damage to this point using your 200+100K number..and what might you still stand to get back.



IRA
They have returned 20% of 300k to me. 60k. So a loss of 240k in IRA. I only expect a few % more if anything. A lot has gone to lawyers and others as they dissolve the funds holdings.

Non IRA
I have a gain of 100k on the 200k investment. They want 50% of this back now.

So looking at a total loss of 290k on a 300k investment if I pay them back(I think of it as one investment that I simply swapped at one point to a more tax efficient means). Some might say a loss on 600k since it was separate. But at any one time I only had 300k in as I didnít want to risk too much in this one fund. At the time the 300k was about 20% of my NW.

All this was my attempt to diversify against the ups and downs of the market as 2008 really rattled me. I guess In the end I made the biggest financial mistake of my life here by not diversifying more (wish I knew about this board back then)

There are a few groups with suits against Deloitte who was the the auditor of the fund. But I donít see any other class actions. the money is gone so who else is there to sue? The guy is going to federal prison.

Safire 04-29-2021 11:47 AM

Quote:

Originally Posted by ivinsfan (Post 2599562)
Your posts are so confusing, are you saying they returned 60K to you or they will return 60K, I cant figure it out. What is your actual financial damage to this point using your 200+100K number..and what might you still stand to get back.

He gained 100K minus taxes in his taxable a/c.

Thinking this "investment" was a sweet deal and seeking to save on taxes, he closed the fund in his taxable a/c then put down 300K back into the same scheme with mlney in his IRA, losing 80% of that (240K)

In effect, his total "investments" were 500K, with a net loss of (-) 240K + 100K or (-) 140K + taxes he paid on a gain of 100K in his taxable.

He banked the "gain" in the taxable, paying taxes on it, no doubt, and then ate the loss in his IRA. The trustee is now trying to clawback another 50K of the gain out of him, failing which they're planning to sue him for the entire 100K gain on taxable. If he forks over the 50K, then he is increasingly his net loss to 190K + the taxes already paid on the 100K "gain".

There must be a legal reason that the bankruptcy trustee is treating his taxable & IRA as two different investments, even if he owns both of them. What he needs is a securities lawyer and a pitbull CPA in his corner. I doubt laypeople can figure out why the trustee is allowed to legally demand money back, even if it increases OP's losses to almost 200K!

ivinsfan 04-29-2021 11:49 AM

So if my math is right of the 60K they returned on your 300K, 20 of it was paid on the 100K profit you rolled over, yes?


Now looking at the original 200 plus 100 gain they want you to cough up 50K in fact you would payback a net of 30K.. 50 minus the 20 = 30? ..you might not like but I'm guessing they could collect it.



It would have been a lot less confusing if this had been in post number one.

ivinsfan 04-29-2021 11:50 AM

Quote:

Originally Posted by Safire (Post 2599573)
He gained 100K minus taxes in his taxable a/c.

Thinking this "investment" was a sweet deal and seeking to save on taxes, he closed the fund in his taxable a/c then put down 300K back into the same scheme with mlney in his IRA, losing 80% of that (240K)

In effect, his total "investments" were 500K, with a net loss of (-) 240K + 100K or (-) 140K + taxes he paid on a gain of 100K in his taxable.

He banked the "gain" in the taxable, paying taxes on it, no doubt, and then ate the loss in his IRA. The trustee is now trying to clawback another 50K of the gain out of him, failing which they're planning to sue him for the entire 100K gain on taxable. If he forks over the 50K, then he is increasingly his net loss to 190K + the taxes already paid on the 100K "gain".

There must be a legal reason that the bankruptcy trustee is treating his taxable & IRA as two different investments, even if he owns both of them. What he needs is a securities lawyer and a pitbull CPA in his corner. I doubt laypeople can figure out why the trustee is allowed to legally demand money back, even if it increases OP's losses to almost 200K!




losing 80% term is confusing did the fund go to zero, he indicated he got paid 60K. the exact term he used was they returned to him.the fact he paid taxes on it means nothing in the grand scheme of things.

ExFlyBoy5 04-29-2021 11:54 AM

Quote:

Originally Posted by Retireby45ish (Post 2599571)
IRA
They have returned 20% of 300k to me. 60k. So a loss of 240k in IRA. I only expect a few % more if anything. A lot has gone to lawyers and others as they dissolve the funds holdings.

Non IRA
I have a gain of 100k on the 200k investment. They want 50% of this back now.

So looking at a total loss of 290k on a 300k investment if I pay them back(I think of it as one investment that I simply swapped at one point to a more tax efficient means). Some might say a loss on 600k since it was separate. But at any one time I only had 300k in as I didnít want to risk too much in this one fund. At the time the 300k was about 20% of my NW.

All this was my attempt to diversify against the ups and downs of the market as 2008 really rattled me. I guess In the end I made the biggest financial mistake of my life here by not diversifying more (wish I knew about this board back then)

There are a few groups with suits against Deloitte who was the the auditor of the fund. But I donít see any other class actions. the money is gone so who else is there to sue? The guy is going to federal prison.

Deloitte, eh? Sounds reminiscent of the Aequitas Capital Management scheme.

Safire 04-29-2021 11:55 AM

Quote:

Originally Posted by Retireby45ish (Post 2599571)
IRA
They have returned 20% of 300k to me. 60k. So a loss of 240k in IRA. I only expect a few % more if anything. A lot has gone to lawyers and others as they dissolve the funds holdings.

Non IRA
I have a gain of 100k on the 200k investment. They want 50% of this back now.

So looking at a total loss of 290k on a 300k investment if I pay them back(I think of it as one investment that I simply swapped at one point to a more tax efficient means). Some might say a loss on 600k since it was separate. But at any one time I only had 300k in as I didn’t want to risk too much in this one fund. At the time the 300k was about 20% of my NW.

All this was my attempt to diversify against the ups and downs of the market as 2008 really rattled me. I guess In the end I made the biggest financial mistake of my life here by not diversifying more (wish I knew about this board back then)

There are a few groups with suits against Deloitte who was the the auditor of the fund. But I don’t see any other class actions. the money is gone so who else is there to sue? The guy is going to federal prison.

The bankruptcy trustee will sue all the "investors" who had "gains" on their returns from this Ponzi scheme, in order to spread out & distribute whatever is left equally among all those who were victims of this scheme. There may be other "investors" who were also sent claw back notices that you just aren't aware of.

Per your OP numbers, your investment wasn't 600K. You only invested 500K (the 200K in taxable, and then the 300K in IRA). Do you have a CPA to help you figure out if you can get some of the capital gain taxes you paid on the 100K "gain" from this scheme? You sound very stressed, and need a 2nd pair of eyes in your corner - preferably those eyes belong to a securities lawyer. Hang in there.

Safire 04-29-2021 12:01 PM

Quote:

Originally Posted by ivinsfan (Post 2599577)
losing 80% term is confusing did the fund go to zero, he indicated he got paid 60K. the exact term he used was they returned to him.the fact he paid taxes on it means nothing in the grand scheme of things.

No one "paid" him 60K. He invested 300K in the IRA into the scheme and the value of the "investment" tanked 80%, so he lost 240K of a 300K investment, leaving him with only 60K as "proceeds" from the "investment"

The fact he paid taxes on gains do matter because if he "returns" half his "gains" back to the trustee, then he should be entitled to half his capital gains taxes back. He really needs to talk to both a CPA and a securities lawyer

Retireby45ish 04-29-2021 12:08 PM

Investment nightmare
 
Quote:

Originally Posted by Safire (Post 2599586)
No one "paid" him 60K. He invested 300K in the IRA into the scheme and the value of the "investment" tanked 80%, so he lost 240K of a 300K investment, leaving him with only 60K as "proceeds" from the "investment"

The fact he paid taxes on gains do matter because if he "returns" half his "gains" back to the trustee, then he should be entitled to half his capital gains taxes back. He really needs to talk to both a CPA and a securities lawyer


OP here again.

Correct as stated above.

My CPA did say that if I pay back some portion (50k) I can get the capital gains taxes back on that portion as these will lesson my gains.

He is not a lawyer so canít advise me on whether to settle or lawyer up and fight it. But writing off some of it lessons the blow if I choose to go that route.

And yes, the receivers lawyers sent letters to anyone who had ďgainsĒ to claw some back. Itís in the ďtens of millions of dollarsĒ that fall into this boat per their letters.

Thanks again for all the insight and words of wisdom.

ivinsfan 04-29-2021 12:12 PM

Quote:

Originally Posted by Safire (Post 2599586)
No one "paid" him 60K. He invested 300K in the IRA into the scheme and the value of the "investment" tanked 80%, so he lost 240K of a 300K investment, leaving him with only 60K as "proceeds" from the "investment"

The fact he paid taxes on gains do matter because if he "returns" half his "gains" back to the trustee, then he should be entitled to half his capital gains taxes back. He really needs to talk to both a CPA and a securities lawyer


He clearly say they "returned" 60K of his money, I don't know what that means and I don't see how you do. OP doesnt use the words proceeds.

ivinsfan 04-29-2021 12:13 PM

Quote:

Originally Posted by Retireby45ish (Post 2599590)
OP here again.

Correct as stated above.

My CPA did say that if I pay back some portion (50k) I can get the capital gains taxes back on that portion as these will lesson my gains.

He is not a lawyer so can’t advise me on whether to settle or lawyer up and fight it. But writing off some of it lessons the blow if I choose to go that route.

And yes, the receivers lawyers sent letters to anyone who had “gains” to claw some back. It’s in the “tens of millions of dollars” that fall into this boat per their letters.

Thanks again for all the insight and words of wisdom.




So what do you mean when you say they "returned" 60K, having said that you should get a lawyer try to clarify things before you see them, because they charge by the minute.

sengsational 04-29-2021 12:18 PM

I think you should not get a lawyer.

I'd write a letter myself stating the facts of the case, the two account numbers, the dates of the transactions. Then demand all of this is treated as a unit with the threat of taking it to the presiding judge if they don't comply. I don't see how they can justify severing the two accounts, and one must presume a reasonable judge would also wonder the same thing.

As an aside, The OP said that they were trying to get more for those that got ripped off, and this demand received is exact that.

Retireby45ish 04-29-2021 12:19 PM

Quote:

Originally Posted by ivinsfan (Post 2599595)
So what do you mean when you say they "returned" 60K,


Sorry for the confusion. Iíve learned to do a better job of really explaining things correctly the first time :)

By returned 60k I mean that I only got 60k back from the 300k I put in. The rest (240k) was a loss.

They may return a few k more over time as they liquidate things and claw back further. But I would guess it will be tiny amounts.

jazz4cash 04-29-2021 12:20 PM

Yikes. I am sorry you are going through this I know it must be a huge ball of anxiety and frustration. Some of my prior posts were insensitive to what you must be feeling right now. The initial description seemed a bit casual and even now the term ponzi is being thrown around but itís not clear to me if the activity is illegal or just reckless. In any event it sounds like you have received $60k to offset your IRA losses but they only want to clawback $50k which actually sounds not so bad. Clearly the investment did not go from $300k to $60k in 30 days if those are the right numbers. The $300k was overvalued so the $100k gain was not real. Talk to a lawyer.

JRon 04-29-2021 12:23 PM

The OP’s explanation makes sense to me and I feel for him. I have some experience with a similar situation in a case where a public company went bankrupt and the attorney for the trustee clawed back legitimate payments made to vendors in the 90 days prior to the bankruptcy.

From that I learned that the attorney firm representing the bankruptcy trustee has the right to sue for what they ask for, but also they will negotiate. Hire an attorney to represent you in that negotiation. You have a legitimate reason to negotiate because of your second investment with the IRA. Hopefully your attorney can negotiate the $50,000 down to $25,000 or so, but still be prepared to write a big check. Sorry for your loss.

ivinsfan 04-29-2021 12:23 PM

Quote:

Originally Posted by Retireby45ish (Post 2599600)
Sorry for the confusion. Iíve learned to do a better job of really explaining things correctly the first time :)

By returned 60k I mean that I only got 60k back from the 300k I put in. The rest (240k) was a loss.

They may return a few k more over time as they liquidate things and claw back further. But I would guess it will be tiny amounts.


Are you getting a check from someone saying RE45 here is a settlement check from XYZ investments ripping you off and tying it to your account number.:coolsmiley:...Did the fund in question get liquidated to zero at it's implosion?

RunningBum 04-29-2021 12:27 PM

Quote:

Originally Posted by Jerry1 (Post 2599546)
He lost most of his investment and is no better off than anyone else in the fund and should be treated accordingly.

He clearly is better off.
OP invested $500K total.
$200K in taxable, got $300K back.
$300K in IRA, got $60K back.
$360K back on $500K, (loss of $140K) so he lost 28%.
Most people lost 80%.
This is why he may not win this battle, but I'm not familiar with clawbacks, so I'd be consulting a lawyer, now or later.
Quote:

Originally Posted by Retireby45ish (Post 2599571)
IRA
They have returned 20% of 300k to me. 60k. So a loss of 240k in IRA. I only expect a few % more if anything. A lot has gone to lawyers and others as they dissolve the funds holdings.

Non IRA
I have a gain of 100k on the 200k investment. They want 50% of this back now.

So looking at a total loss of 290k on a 300k investment if I pay them back(I think of it as one investment that I simply swapped at one point to a more tax efficient means). Some might say a loss on 600k since it was separate. But at any one time I only had 300k in as I didnít want to risk too much in this one fund. At the time the 300k was about 20% of my NW.

No, that's bad math. See my earlier response. There's no possible way you can call this a loss of $290K. You seem to be forgetting that you put $200K up initially, and the first sale was $300K. I'd treat it as 2 separate transactions because it's two different types of accounts, but if you want to meld them, you invested $200K, and now you have $60K. If you have to send them $50K, then your loss is $190K.


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