Former Chattanooga Lookouts investor's attorney assails SEC's Ponzi scheme complaint
Aug. 30—An attorney for a
Attorney
The attorney said in an email that the
Chaiken said Woods was managing a private equity fund with real assets that would have been worth more than what the fund owed investors.
He said, for example, Woods sold his 20.1% share of the minor league baseball team back to the Lookouts for
The
In
But the
An audio and video hearing has been scheduled before the judge on
Chaiken said that, in the FBI's definition of a Ponzi scheme, instead of investing victims' funds, the operator pays dividends to initial investors using the principle amounts invested by subsequent investors.
The attorney said that, as defined, the scheme generally falls apart when the operator flees with all of the proceeds, or when a sufficient number of new investors cannot be found to allow the continued payment of dividends.
But Chaiken said that in Woods' case, the "undisputed facts" establish that at the time of the
The attorney said Horizon's interest in
Chaiken said the
He said Woods also had nearly
In addition, Chaiken said he is unaware of evidence that Woods stole investor funds for himself or lived a lavish lifestyle. He said Woods did not receive compensation or fees for running the fund.
The attorney said tens of millions of dollars in investor assets remain held on behalf of Horizon's investors — including more than
According to a filing by the receiver —
The receiver said in the filing that of the 525 investors in Horizon, 87 were determined to be "net winners," or received more money back than they invested. Three investors received back exactly what they invested.
That leaves 435 investors who have so far received back less money than they invested, according to filings.
Chaiken said it's incorrect to say that losses to investors to date amount to about
The attorney said tens of millions of dollars in investments are in the process of being liquidated in order to return funds to the investors, and it remains to be seen what shortfall there will be at the end of the day.
He said that "promising" real estate development projects throughout
Also, Chaiken said, there were numerous start-up companies, the
"These are real, legitimate investments, unlike true Ponzi schemes like
Woods, 57, who grew up in
The
Contact
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