A deal has been negotiated where investors duped in a nearly $50 million Ponzi scheme will get the majority of their money back. Richard Siskey, who lived a lavish lifestyle in Charlotte, ran the Ponzi scheme.
In February, $15 million was distributed to investors. The latest proposed settlement comes two years after Siskey committed suicide when he discovered that he was being investigated by the FBI.
Now, after months of negotiations, victims of the Ponzi scheme could receive 90 percent of the money they invested with Siskey. That’s if the deal is approved by the Western District U.S. Bankruptcy Court, according to Charles Monnett. He represents about a dozen investors who lost money in Siskey’s fraudulent operation.
Monnett said the majority of the $41 million settlement, which includes the earlier $15 million payout, would come from life insurance policies paid to Siskey’s widow, Diane and their daughter.
“It is extremely rare for individual investors to get back the majority of their money,” Monnett said. “What made this case different is the $49.5 million life insurance proceeds available. Otherwise, investors wouldn’t be getting back a large percentage of their money in this case either. It made a huge difference.”
Monnett said Diane Siskey initially pledged to pay a much smaller amount of that insurance money to investors, but it was far short of the nearly $48 million they were demanding and numerous lawsuits were filed. Monnett said in the negotiations, a major sticking point was the insurance policy’s premiums.
“If the life insurance premiums were paid with stolen money, then that money was subject to recovery by the trustees and one of the big fights was what was the source of payment for those life insurance premiums?
Monnett said. "Because Mr. Siskey did have legitimate income during that time."
While he operated the Ponzi scheme, Siskey and his family lived in a South Park mansion. Federal investigators say he used investors’ money to travel, gamble, and to buy expensive cars and jewelry. The Siskey estate went to auction last July, but Monnett said even with the property losses and insurance payout, in his estimation Diane Siskey is still in the millionaire’s club.
“There are people who feel she shouldn’t have been left with anything. But to achieve that result was going to require years of litigation and there was always the possibility that litigation wouldn’t be successful,” Monnett said. “In the end, it was important to get money to the people who need it now because a lot are elderly and are in desperate need of their money.”
If the settlement is approved and there are no appeals filed, Monnett said victims of the Ponzi scheme could receive payouts this spring. But as a conclusion of the Ponzi scheme seems near, Monnett said he is still bothered by one thing.
“I still think it’s shocking that a scheme this large has occurred and there has not been a single criminal prosecution of anyone involved,” Monnett said. “Mr. Siskey passed away but it’s inconceivable that he did this entire scheme on his own and I’m surprised that the authorities have not taken more interest in criminal prosecutions.”