WCM777 investors claim $300M in Ponzi promises
Following the opening of a WCM777 victim’s claim portal late last year, some 35,545 claims were filed for a whopping $386 million in losses.
The Receiver to date has only recorded around $86 million of actual invested funds. Furthermore only $30 million has been recovered for redistribution.
The problem facing the Receiver has resulted in a phase 2 plan submitted for court approval.
With such a large number of investments to be reviewed, and recognizing that, for example, a significant number of the cash claims are unsubstantiated, the Receiver has a plan to limit the review of cash claims so as to be cost effective.
A significant number of the claims are unsubstantiated. No doubt some of them also claim ROI promises made to them by WCM777. Other still are likely claiming funds invested with the affiliate who recruited them, which do not show up on WCM777’s banking records.
Whatever the case, it’s a complicated mess the WCM777 Receiver is now charged with sorting out.
That charge? Almost $400,000.
The proposed budget for Phase II is $374,866.
This increase in cost results from the fact that the number of claimed transactions to be tested (72,253) is more than double the Receiver’s stated assumption in the Motion (33,713), and the number of cash transactions needing to be manually tested (58,481) is substantially greater than anticipated.
A major contributing factor to the confusion is the fact that WCM777’s ‘books and records did not include a database of investors and their transactions‘.
Instead, investor claims are to be tested against a series of databases compiled from WCM777’s web host, banks, individual investors and unnamed third parties.
Although the number of investor transactions needing to be tested is at the high end of the range anticipated in the Motion (24,000 to 96,000), the Receiver believes it is feasible to test and verify the 72,253 claimed investor transactions and generate recommended lists of allowed claims and disallowed claims that reflect, with a reasonable degree of accuracy, the victims’ losses from the WCM777 scheme.
Naturally verified victim losses are expected to be substantially lower than the $384 million WCM777 investors have claimed.
The majority of claims are from China, who make up 62% of all claims filed. Chinese investors, who likely don’t understand the ROIs they were promised don’t exist, or simply don’t care, are claiming $167 million.
Claimants included the value of the actual investments plus Kingdom ‘points’ and/or Claimed Investment amounts do not match the supporting documents submitted.
In some cases, extra zeroes were included in amounts claimed.
The former is likely due to the continued lack of understanding/acceptance that Kingdom points do not correspond to actual dollars.
US investors make up 18% of the claims and $97 million. Taiwan is third at 3% and $28 million.
Proposed scheduling would see claims analyzed and deficiency notices sent out to investors by June 1st, 2016.
A motion to allow claims that weren’t deemed deficient would then be filed on July 31st.
The WCM777 Receiver’s proposal is currently before the court and awaiting approval.