Long-awaited Siskey Ponzi $42M set­tle­ment faces a new hur­dle

The Charlotte Observer (Sunday) - - Local - BY DEON ROBERTS der­[email protected]­lot­teob­server.com

A group of in­vestors who say they were hurt in the Ponzi scheme run by the late Char­lotte busi­ness­man Rick Siskey is op­pos­ing a pro­posed set­tle­ment that would pro­vide pay­ments to vic­tims.

Those in­vestors ar­gue that the deal could shield in­surer MetLife from claims the in­vestors have pend­ing against it.

An­nounced in De­cem­ber, the roughly $42 mil­lion set­tle­ment is ex­pected to al­low Siskey vic­tims to re­cover up to 90 per­cent of their in­vest­ments once the deal is ap­proved in court. Vic­tims have been wait­ing to be fully com­pen­sated since Siskey took his life more than two years ago af­ter court fil­ings re­vealed he was be­ing in­ves­ti­gated for fraud.

The group’s ob­jec­tion is ex­pected to be con­sid­ered Tues­day dur­ing a hear­ing on the set­tle­ment in fed­eral court in Char­lotte.

In their court fil­ing op­pos­ing the set­tle­ment, the group of 18 in­di­vid­u­als claim that MetLife, which was once af­fil­i­ated with Siskey’s fi­nan­cial ser­vices firm, ac­tively con­cealed the scheme be­cause Siskey was gen­er­at­ing large profits for the in­surer. If the set­tle­ment is ap­proved, MetLife in­tends to use the deal’s lan­guage to stall the in­vestors’ claims that have been filed in state court, the fil­ing said.

A MetLife spokesman de­clined to com­ment. But in a court fil­ing Thurs­day, MetLife said the group’s ob­jec­tion to the set­tle­ment is based on a mis­un­der­stand­ing of the deal and should be over­ruled by the court.

‘IT IS UN­FAIR’

This is the lat­est de­vel­op­ment in the long-run­ning case that be­gan fol­low­ing the death of Siskey, 58, in De­cem­ber 2016.

Siskey lured clients with prom­ises of fixed re­turns in safe in­vest­ments but in­stead used their money to fund a lav­ish life­style and pay off other in­vestors, ac­cord­ing to court fil­ings. Some of the in­vestors en­trusted him with hun­dreds of thou­sands of dol­lars apiece, the fil­ings state.

For Char­lotte, it has un­rav­eled into one of the big­gest in­vest­ment frauds in the area’s his­tory.

The De­cem­ber set­tle­ment, when cou­pled with a pre­vi­ous one, would im­me­di­ately pro­vide in­vestors with about 68 per­cent of their claims, ac­cord­ing to doc­u­ments.

In­vestors could re­ceive up to 90 per­cent of their claims if they agree to re­lease Siskey’s widow, her chil­dren and MetLife from in­di­vid­ual claims, ac­cord­ing to terms of the deal.

Ul­ti­mately, ac­cord­ing to fil­ings, the trustee han­dling the case hopes the set­tle­ment en­ables vic­tims to re­ceive more money from the Siskey es­tate. That would re­sult in 100 per­cent re­cov­ery on in­vestors’ claims plus some in­ter­est, doc­u­ments state.

In a fil­ing Thurs­day, the trustee said the set­tle­ment should be ap­proved and claimed that, through the deal, the trustee is not seek­ing to com­pel the re­lease of the group of 18’s claims against MetLife.

In a Wed­nes­day let­ter to the judge han­dling the fed­eral case, Siskey in­vestors Teresa Hawkins and her hus­band, Michael Burkhard, begged him to ap­prove the set­tle­ment and deny the group’s ob­jec­tion.

For nearly 30 years, the cou­ple in­vested their money with Siskey, in­clud­ing retirement sav­ings, and sus­tained more than $1.1 mil­lion in to­tal losses through the Ponzi scheme, the let­ter said. As a re­sult, the cou­ple lost their life sav­ings and suf­fered a huge phys­i­cal and emo­tional toll dur­ing the past two years, the let­ter said.

“It is un­fair for 18 in­di­vid­u­als to stop the ap­proval of the trustee’s set­tle­ment for the 175 re­main­ing in­vestors, many of who have had their lives dev­as­tated by these frauds per­pe­trated by Rick Siskey over a span of 20 plus years,” the let­ter said.

Rick Siskey

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