$361 million in WCM777 victim claims disallowed
The WCM777 Receiver has finally finished forensic accounting on investor losses.
Of the $90.8 million dollars paid in by WCM777 affiliates, $72.2 million are recorded losses and $18.6 million was paid out in ROIs.
72,253 WCM777 affiliates had filed claims totalling $412 million in losses.
Despite being “strongly encouraged” to provide banking records with their claims, a “significant number” of WCM777 affiliates failed to do so.
These affiliates simply provided identification documents, a stated amount in losses and left it at that.
In total, 30,389 deficiency notices representing 69,539 claimed
investments were sent; only 3,779 deficiency responses were received and reviewed.
The deficiency responses were manually reviewed by the Receivership.
If a claimant’s response included bank record documentation supporting the claim, such claimed investment was re-categorized from deficient to conditionally allowed (whether it was a direct payment to a defendant entity or a payment to a leader and as such categorized as a “paid leader” claim).
If no or insufficient documentation was included in a response, the investment remained in the deficient category pending supplemental testing.
After supplemental testing was completed, the Receivership recorded $50.6 million in allowed claims.
This represents 12.3% of the $412 million in losses WCM777 affiliates had originally filed.
Language wasn’t a barrier, with deficiency notices translated into six languages.
Rather, in my opinion, the inflated losses claims is attributable to greedy affiliates who, mistakenly or otherwise, refused to believe the Ponzi ROIs WCM777 promised them wasn’t real money.
This is supported by the fact that “the most common reason” claims were denied is because ‘the claimant did not provide any bank record support‘.
You can’t provide bank records on Ponzi ROIs you were never paid with money that doesn’t exist.
Other reasons put forth by the Receiver include:
This scheme involved countless ways in which investors purportedly transferred funds, much of which went to leaders or other individuals and may or may not have ever reached the Receivership Entities.
Approximately 82% of the claimed investments (including a large number of “paid leader” claims) were submitted as cash (58,481
claimed investments or $270 million), which is inherently difficult to verify.
The vast majority of claimants either submitted no documentation (other than ID) or handwritten/non-bank record documentation, which is very difficult to verify.
The Receiver has requested these claims be disallowed.
Once the allowed amount of each claim is set, the Receiver will be in a position to distribute the bulk of the funds in the receivership estate.
Accordingly, the Receiver seeks approval of a plan of distributing receivership estate funds to the holders of allowed claims.
The proposed distribution plan will see affiliates a pro rata share of available funds, either via check or PayPal, ‘distributed based on the allowed amount of their claims‘.
The current amount the Receiver has recovered stands at $27 million. Dollar for dollar, WCM777 affiliates are looking at recovering approximately 53% of what they lost.
Initially however the Receiver is proposing a distribution payments of only $21 million, which brings the percentage down to 41.5%.
Additional distribution payments are intended to be made at a later date.
Pending approval of the Receiver’s proposed distribution plan, stay tuned…