Federal & State Receiverships
Receiverships allow creditors greater leverage where the debtor cannot be expected to cooperate with creditors or a court, or where assets require immediate management that the debtor is unlikely to provide. In cases of insider fraud, for example, the appointment of a receiver can stop the dissipation, theft and secretion of assets. If an asset is being mismanaged, a receiver can intervene to place the asset in the hands of competent and responsive parties.
Receiverships vary widely in size and complexity. Munsch Hardt has niche experience in handling receiverships imposed in cases involving mass frauds. Many of these receiverships are initiated by agencies such as the Securities and Exchange Commission (SEC). Acting under the court's direction, we quickly seize available assets, assess the nature of the fraud and the likelihood of further recovery, and work with government officials and private parties to pursue assets. When assets have been transferred abroad, we are tapped into the worldwide network of skilled attorneys that can help maximize return to the investors victimized. We sort out the competing claims and help devise a fair and equitable distribution of recovered assets. When cases of conflicting investor issues are raised or difficult decisions have to be made with respect to particular assets or claims, we have served as an examiner to assist the court appointed receiver.
In other cases, a receiver is needed simply to take over the management of an ailing business, real estate asset or other collateral. Our attorneys have been appointed by state court judges to act as receivers in such cases.
- Representation of a creditors' litigation trustee in pursuing claims against principals and involved agents who orchestrated a $400 million Ponzi scheme concerning investments in pay phones.
- Representation of third parties alleged to have received tainted funds from principals of a securities fraud scheme.
- Representation of significant claims, disputes, objections and avoidance in conjunction with or on behalf of the firm's Bankruptcy group in litigation.
- Representation of court appointed receivers in various actions involving securities fraud, Ponzi schemes, viatical settlements, insurance scams and other actions brought initially by the Securities Exchange Commission (SEC) and various branches of government.
- Representation of a bankruptcy trustee in one of the largest Ponzi scheme cases in the United States.
- Representation of Dennis L. Roossien, Jr., a Munsch Hardt Shareholder, as Receiver, in a real estate fraud, which involves over 100 corporate entities and a 10 year history of money laundering.
- Representation of Dennis L. Roossien, Jr., as Receiver, who was appointed ancillary to an SEC civil enforcement action. This case prosecuted a $170 million affinity fraud that targeted church congregations. Approximately $15 million was recovered including $1.1 million from Hong Kong, China, $700,000 from Greece, $400,000 from Panama and $200,000 from Benin, Africa. Additional recoveries were made from England and Germany. A supplemental fund was established to permit church leaders to donate Ponzi payments back to the fund, which raised over $3 million.
- Representation of Steven A. Harr, a Munsch Hardt Shareholder, who was appointed Examiner in two related actions arising out of a $250 million fraudulent investment scheme based upon viatical insurance contracts. The first action was initiated by the SEC against a third party broker and the second action was brought by the receiver. The receiver appointed has taken over the remaining assets of the scheme, which principally consist of a $200 million pool of viaticated life insurance contracts, some real estate and the claims against involved parties. As Examiner, Mr. Harr and the firm represented the interests of the thousands of defrauded investors with respect to the substantial efforts that have followed the collapse of the company to manage and to recover assets and to effect compensation for victims of the scheme.
- Representation of Garrett Vogel, as Receiver, for a credit card processing company placed in receivership by the Federal Trade Commission (FTC). Representation included responding to efforts by the principals of the company to attack the receiver and unduly burden the enforcement efforts of the FTC.
- Representation of Joseph J. Wielebinski, as Receiver, who was appointed ancillary to a SEC civil enforcement action. The case involved an Internet based fraudulent investment scheme that raised over $50 million. Immediate action led to the freezing of accounts holding $13.9 million. Forensic investigative efforts, both domestic and foreign, led to the recovery of an additional $1.6 million and the freezing of a further $2.7 million in Luxembourg. There were also recoveries made from a parallel United States government forfeiture proceeding and a proceeding commenced by Liechtenstein authorities. As a result of these efforts, the claims of over 1,400 victims have been paid in full.
- Representation of Joseph J. Wielebinski, as Receiver, in SEC v. Wagman, et al. Virtually no funds were available to fund the receivership and undertake a thorough investigation. Nonetheless, Munsch Hardt undertook substantial efforts to support the SEC in obtaining a $24 million judgment against the principal individual defendant, who was returned involuntarily from Panama. Handling this matter included efforts to defend that judgment on appeal, address the claims of investors, respond to the environmental issues created by a fraudulent oil and gas scheme, and retain and supervise an international investigative team, who agreed, on a contingent basis, to pursue the assets of the Panamanian organization that sponsored and supported this illegal enterprise.
- Dennis L. Roossien, Jr. and Joseph J. Wielebinski have also been requested to serve as Receiver for the FTC and Securities Investor Protection Corporation (SIPC).
