Victims in Champion-Cain Ponzi scheme to finally receive 90% of money they lost
Hundreds of victims who were duped by
Calling it an "extraordinary recovery,"
Those funds, which victims could potentially see within a month, are on top of the substantial settlement payments already made to most victims by Chicago Title, which was responsible for holding investors' money in what turned out to be nonexistent escrow accounts. The company has never admitted to any wrongdoing.
The only obstacle that was standing in the way of near-term payments by the receiver was a plea by one of the Ponzi scheme's largest investors —
While receiver
Burns, who in February approved Freitag's plan for distributing claims money owed victims, dismissed Peterson's assertion that he would be "irreparably harmed" once the receiver begins doling out payments to some 300 defrauded investors.
"There will be harm to some of the investors by further delay," Burns said at the conclusion of Monday's court hearing. "Their money has been tied up since they first invested and this broke in 2019 ... The idea of adding at least another couple of years before the appellate process plays out, I don't think it's fair to those investors who now have in mind they'll at least get their money back, and some have incurred legal fees to get to this point."
The net effect of Burns' ruling rejecting Peterson's request for a delay is to quickly begin reimbursing victims for their losses. Attorney
"We are still projecting that the total investor recovery will be in the range of 90 to 95 percent of money-in, money-out net losses, which were about
Freitag has calculated that nearly 300 investors were bilked out of money that they thought was going toward making high-interest loans to restaurant and bar owners who were purchasing liquor licenses for tens of thousands of dollars. In truth, no loans were ever made. The money solicited by Champion-Cain, a once prominent restaurateur, was instead diverted to her and her business enterprises, many of which were failing. Freitag projects that across the board, final recovery of losses could approach 95 percent, not including fees for lawyers.
Ponzi scheme victim
"Is that total recovery really more like 60 percent or 80 percent? So it's deceiving to say it's a 90 percent recovery rate because I'm not 90 percent whole," said Gilbert, who says she invested a sizable chunk of her savings in Champion-Cain's lending scheme. "When this (case) started, we were of the mindset we'd never see this money again so anything we get is certainly wonderful so I am appreciative of this but I'm still pissed off at Gina because I don't have all the money back I gave her."
Since her appointment in 2019, Freitag says she has finalized sales of multiple properties, leasehold interests and liquor licenses that realized more than
That doesn't include the
In his argument for postponing disbursement of receivership money, Peterson noted that the
The judge countered that Peterson, while he has not been charged with any wrongdoing, is still considered an "insider" in the scheme, which warrants him being treated differently from all other investors. He noted that, to Peterson's benefit, the more money reimbursed to victims the less money he is potentially liable for.
This story originally appeared in
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