Here’s where things stand with the Rick Siskey Ponzi case

April 10--The trustee unraveling the Rick Siskey Ponzi scheme case said he has reached an "agreement in principle" with Siskey's widow over life insurance proceeds that could be used to compensate investors who lost millions in the fraud.

Trustee Joe Grier, however, did not provide any information about the settlement and said details still need to be worked out with Diane Siskey and the administrator of Siskey's estate, attorney Lane Williamson.

"We are committed to doing it sooner rather than later," Grier said at a bankruptcy court hearing Monday. He did not provide a specific timeline.

Siskey, 58, took his own life in December 2016, shortly after public filings alleged he was involved in fraud. For more than a year, Grier and his team have been working to gather money to return to victims but so far no payments have been made.

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The main asset available to investors is nearly $50 million in life insurance proceeds that went primarily to Diane Siskey but also to his daughter and two employees after Rick Siskey's death. Early on, Diane Siskey committed to provide $37.5 million to investors, but the trustee has worked to get back more, including reaching agreements to take back nearly all of the $500,000 received by the two employees.

Also at Monday's hearing, Judge Craig Whitley turned down a request by private equity firm Stone Street Partners to pursue claims in North Carolina Business Court against former Siskey companies that are now in bankruptcy court. The firm, once known as Siskey Capital, has already filed a lawsuit against other parties in the state court.

The suit by Stone Street and two of its its employees says they knew nothing about Siskey's illegal activities but have seen their business and their careers devastated after the Ponzi scheme became public. Grier had opposed Stone Street's request, saying it would delay the bankruptcy court case and add legal expenses.

The Securities and Exchange Commission had also objected to Stone Street's motion for similar reasons. The SEC has not taken any action against any parties in the case, but SEC attorney David Baddley said at the hearing that the agency is monitoring bankruptcy proceedings.

The SEC's "investigation is still active and ongoing," said Baddley, in a rare public comment on the case. He did not provide details on the investigation, but said "there needs to be more urgency to resolve this."

Lawyers for Stone Street had argued that allowing Stone Street to make additional claims in state court was appropriate. They also noted that Stone Street had 65 of its own investors, including some who also lost money in Siskey's separate Ponzi scheme investments.

"Stone Street Partners and its investors have suffered significant losses as a direct result of the Siskey Ponzi scheme, and they too are entitled to be compensated," attorney Jim Smith said in a statement. "Stone Street is not competing with the Ponzi investors. Stone Street is committed to seeing that the Ponzi investors are fairly compensated."

Smith added: "The key is Diane Siskey, who is still sitting on tens of millions of dollars which should be used to pay investors. Stone Street urges Diane Siskey to immediately make these funds available to repay the Ponzi and Stone Street investors."

Diane Siskey's lawyers have repeatedly said she has done nothing wrong and emphasized her cooperation with the court and other authorities.

In his ruling, Whitley indicated that the trustee may need to set aside a reserve for Stone Street pending the outcome of its ongoing Business Court lawsuit.

In other matters, Whitley ruled against attorney Charles Monnet III's request to depose Diane Siskey on behalf of creditors. But the judge indicated that creditors will get a chance later, once a settlement is finalized.

Rick Rothacker: 704-358-5170, @rickrothacker

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