Kathy Bazoian Phelps
Senior Counsel in Ponzi Scheme Litigation
and Bankruptcy Matters

Kathy is a senior business trial attorney with more than 30 years experience prosecuting and defending claims for high net worth clients involved in Ponzi scheme matters and in bankruptcy proceedings. Kathy’s practice includes recovering assets for clients in complex fraud cases under standard fee and alternative fee arrangements. She also handles SEC and CFTC whistleblower claims. Kathy also serves as a mediator in bankruptcy matters, in complex business disputes, and in matters requiring detailed knowledge about fraud or Ponzi schemes.

Kathy’s Clients in Ponzi Scheme Cases and Bankruptcy Matters
Equity Receivers
Bankruptcy Trustees
High Net Worth Investors
Debtors in Bankruptcy
Secured and Unsecured Creditors

Wednesday, August 29, 2012

The Ponzi Book Cited for Discussion on Ponzi Scheme Factors

Posted by Kathy Bazoian Phelps

The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes is proving useful to both practitioners and courts on a myriad of issues relating to the unwinding of Ponzi schemes. The Ponzi Book was recently cited by the United States Bankruptcy Court for the District of New Mexico in In re Vaughn, 2012 Bankr. LEXIS 3581 (Bankr. D.N.M. Aug. 2, 2012). The Vaughn court stated: “For a compilation of factors courts consider to determine whether a Ponzi scheme exists, see Kathy Bazoian Phelps and Hon. Steven Rhodes, The Ponzi Scheme [sic] Book: A Legal Resource for Unraveling Ponzi Schemes, § 2.03[1][b] (2012).”

The compilation of factors used to establish the existence of a Ponzi scheme is, of course, very important  in connection with establishing actual intent to hinder, delay and defraud creditors in a fraudulent transfer claim under section 548(a)(1)(A) of the Bankruptcy Code. With proof of a Ponzi scheme comes a conclusive presumption of actual intent, known as the Ponzi scheme presumption, for transfers made during the Ponzi scheme. See, e.g., Johnson v. Neilson (In re Slatkin), 525 F.3d 805, 814 (9th Cir. 2008); SEC v. Res. Dev. Int’l, LLC, 487 F.3d 295, 301 (5th Cir. 2007); Picard v. Madoff (In re Bernard L. Madoff Inv. Sec. LLC), 2011 Bankr. LEXIS 3578, at *15 (Bankr. S.D.N.Y. Sept. 22, 2011). 

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