The USFIA Receiver’s 26th Interim Report details several distribution payment problems.
The Receiver’s latest report was filed on December 5th. In it the Receiver reveals $51.3 million in distribution payments have been disbursed.
Payments were made by check, Paypal or wire. A very large volume of checks have not been negotiated due to restrictions on foreign currency transactions in certain jurisdiction, or foreign banks that do not have correspondent banking relationships with a U.S. bank.
To address these issues, the Receiver made Paypal an option for payment.
That too has been difficult though. The difficulties usually arise because the claimant has not properly established their account at Paypal.
To address the difficulties with making payment by check or Paypal, the Receiver has also been making payment by wire transfer. This too has limitations, such as a limited number that can be done per day and the approval and authentication process.
Some of the wires have been returned due to incorrect instructions provided by the claimant.
Others have been rejected by the receiving bank due to restrictions on foreign currency transactions in certain countries. Some countries do not allow incoming wires due to money laundering regulations or require documentation as to the legitimacy of the source of the funds.
Additional difficulties have checks being returned and checks never making it to their destination. In these instances, stop
payment orders are completed and then checks are re-issued.
Specifics examples aren’t provided but the Receiver has also learned of checks being deposited by third-parties, ACH fraud and attempts to divert funds.
The Receiver has also faced several untoward attempts to cheat the distribution fund, including stolen checks being remotely deposited by non-claimants and fraudulent ACH (Automated Clearing House) withdrawals by non-claimants.
Other fraudulent attempts to divert funds include claims filed on behalf legitimate victims by others who then attempt to divert the funds to themselves.
These duplicitous efforts have required the Receiver to diligently monitor disbursement activity.
As the USFIA distribution process continues, Receivership staff are being inundated with
hundreds of emails daily requesting the status of payment, correcting payee information, reporting a missing payment, of myriad other issues all of which need to be reviewed and administered.
USFIA was a $200 million Ponzi scheme. Of that amount the Receivership has clawed back “nearly $80 million”. $64 million is earmarked for eventual payout to USFIA victims with a valid claim.
As of December 2022, the USFIA Receiver does not expect any “additional monetary recoveries”.