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Ext. PublicationSuccess Story: Uncovering Fraud in a $130 Million Ponzi Scheme
Forensics & Litigation Services
Forensics & Litigation Services
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The Client
The client was a court-appointed receiver in a Securities and Exchange Commission (SEC) matter. The SEC appointed a receiver to assume responsibility for all assets of the entities in receivership in a Ponzi scheme case where the questionable transactions targeted an Indian American community and raised nearly $130 million.
The Challenge
Our scope of work primarily involved two aspects:
- Tracing funds to and from the receivership entities that included hundreds of bank accounts and thousands of transactions
- Searching for real property in the names of the defendants and their related entities and individuals
The defendants used a vast web of entities to hold assets and move money, making it necessary for Weaver’s forensic and litigation services team to create and implement an efficient and technology-driven process to respond to the client’s inquiries. We also analyzed hundreds of thousands of loose files and emails on an electronic discovery platform.
The Process
The SEC’s forensic accountants had already conducted an analysis of certain bank transactions in connection with the Ponzi scheme. However, Weaver extended the analysis of bank transfers to trace certain transactions of interest to our client. To support their analysis, our team reviewed the following sources:
- Expanded bank transaction analysis: We leveraged bank transactions and reviews of loose documents to efficiently identify the transactions of interest to our client, including outflows to high-risk jurisdictions and transactions to entities controlled by the defendants that were not part of the initial complaint.
- Comprehensive real property investigation: Weaver’s forensics and litigation services team expanded on the SEC’s original forensic accounting and asset investigation, combing through real property records and using public and investigative databases.
- Asset identification and valuation: The detailed property investigation revealed what properties were owned by the entities in receivership and their related parties and accurately determined the value of those properties.
The Deliverables
Weaver delivered the following key components that supported a successful legal outcome:
- Communication: Weaver communicated the results of the investigation to the receiver on a rolling basis due to the time sensitivity and ongoing settlement discussions. Our investigative results were needed in real time for negotiating purposes.
- Reporting: In addition to the near real time deliverables and updates provided to the client, Weaver produced an interim report with a summary of our approach, the tracing results from bank transactions and asset search findings.
- Results: Weaver traced millions of dollars going to related parties, including overseas transfers and identified properties worth a substantial sum held by receivership entities and related parties.
The client leveraged our investigative results in a confidential settlement. Additionally, the court ruled that other entities within the web of entities Weaver’s team uncovered should be included in the receivership, resulting in the potential for further recoveries attributable to the receivership. The client was highly satisfied with our team’s effort, communication and thoroughness in this complex and nuanced project.
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