Good news for victims of the USFIA Ponzi scheme, a claim portal is likely to be opened sometime in the first quarter of 2018.

That prediction is based off the USFIA Receiver’s Ninth Interim Report, which states:

The Receiver is currently developing a claims process to recommend to the Court which will lead to a distribution to investor/victims.

USFIA was a $204 million dollar Ponzi scheme shut down by the SEC in October, 2015.

Of the $204 million USFIA received, $183 million was stolen (held by owner Steve Chen or paid out to net-winners).

The remaining $20 million or so was frozen at the time of the SEC shutdown and is now being held by the Recevier.

Since the shutdown the Receiver has expanded that initial amount to over $53 million, by way of selling off Steve Chen and USFIA’s assets.

This includes:

  • sale of a Lynd Avenue property in Arcadia for $461,888
  • sale of a Alhambra Gardens apartment building for $8.41 million
  • sale of the Rancho Cucamonga land for $855,007
  • sale of a Balboa property for $1.6 million
  • sale of a Gainsborough property for $2.4 million

A property in Deodar and USFIA’s Arcadia headquarters are yet to be sold.

Unfortunately USFIA’s amber mine in the Dominican Republic appears to be lost.

After pursuing ownership of the property through Dominican courts,

the Dominican Court did not accept that Ammine SRL was a subsidiary of the USFIA, nor did it consider the litigation against
Chen to be final, notwithstanding

(a) the numerous representations of the Defendant that it owned amber mines in the Dominican Republic,

(b) that it received $12,100,000 from the Receivership Entities, and

(c) that a Final Judgment has been entered.

Given there’s no known public litigation against Chen outstanding, this has left the Receivership at a dead-end regarding the property.

Based on reports obtained from surveyors and appraisers in the
Dominican Republic, the mine does not appear to be of a significant value, nor is it clear that it can be operated legally and safely for the receivership estate.

The land does not appear to be of a significant enough value to justify litigation in the Dominican Republic to restore the Execuator.

Although officially held in the name of previous owners, the property is believed to be under the control of Yap Chen, Steve Chen’s brother.

Another source of revenue will be the selling off of assets controlled by Wei He, Steve Chen’s ex-wife.

Through various shell companies, He is believed to have received $5.3 million dollars in stolen USFIA funds.

He has been fighting the Receiver over returning the stolen funds, with the Receiver now pursuing clawback litigation.

The Receiver has filed a fraudulent conveyance action against Wei He to recover certain real properties in her possession that were purchased with funds of the Receivership Entities.

On the victim side of things the Receiver

has identified approximately 65,000 unique investor email addresses and has sent an official communication regarding the receivership to all of these email addresses, directing investors to the receivership website, requesting they provide their current
contact information, and giving them the option to sign up for automatic email updates when the website is updated.

No word yet on potential clawbacks for USFIA net-winners, although from the sounds of it Chen spent most of the money building a personal property empire.

To date the Receiver has identified eighty-three bank accounts used by USFIA, with the forensic accounting investigation still underway.

To date, the forensic accounting indicates receipts exceeding $204.5 million to the Receivership Entities and disbursements of approximately $183.4 million, which comes very close to reconciling with the approximately $20.6 million held in the
Receivership Entities bank accounts at the time the Receiver was appointed.

The amount spent on assets, primarily real estate, appears to be in the range of $77.4 million.

And while the accounting is not entirely completed and reconciled, the Receiver has been able to use information gleaned to calculate investor losses and amounts obtained by Mr. Chen, as well as to identify and marshal assets, and to determine the cost basis of assets.

The company Ammine, which is controlled by Yap Chen, is believed to have received at least $12.1 million dollars of stolen USFIA investor funds.

The Receiver is

seeking certain banking records which are needed for the forensic accounting and will help trace funds paid to and disbursed by Ammine and is continuing efforts to obtain
these records with the assistance of the SEC.

The Receiver is also considering other means of recovering funds paid to Ammine.

As of September 30th, 2017, the USFIA Receivership is sitting on $45.1 million dollars. Stay tuned…