Widow of Rick Siskey says she will set aside $37.5M for investors harmed by alleged fraud

The widow of Rick Siskey says she will set aside $37.5 million in life insurance proceeds for investors in a fund run by her husband that unraveled late last year.

Rick Siskey took his own life Dec. 28, a week after court filings gave the first public indication that he was under investigation for fraud allegations. An FBI affidavit unsealed in January alleged he was operating a Ponzi scheme and that more than 100 investors could be out as much as $19 million.

In a court filing Wednesday, Diane Siskey said she has received $46.94 million as the beneficiary of four life insurance policies taken out by her husband. Of that amount, she plans to put 80 percent into an escrow account to repay creditors who are not covered otherwise.

Diane Siskey’s filing came in response to a petition filed last week by three investors seeking to push TSI Holdings – the fund run by Rick Siskey – into Chapter 7 bankruptcy. The petitioners have also asked a federal bankruptcy court judge to appoint an interim trustee who would preserve assets for investors.

In Wednesday’s filing, Diane Siskey said she had no involvement in TSI and no knowledge of “any allegations of allegedly illegal activities” until December when the FBI interviewed her husband. She said she is cooperating fully with all government investigations and is willing to cooperate fully with a trustee appointed by the court.

In a letter last month, she had told investors that she planned to place the “bulk” of any insurance proceeds into an escrow account but hadn’t provided any details. In Wednesday’s filing, she said she has disclosed her plan to the U.S. Securities and Exchange Commission.

Charles Monnett III, the Charlotte attorney representing the investors who filed the bankruptcy petition, called Diane Siskey’s contribution a “good first step” but said there are still a lot of unanswered questions among investors.

“I think 100 percent of available assets need to be held by an independent party until we’ve determined how much is owed to all creditors,” Monnett said. “I would be concerned about any monies being dissipated until we’re sure that everyone who has lost their money is repaid in full.”

A hearing will be held in the case Thursday in federal bankruptcy court in Charlotte.

After moving to Charlotte in 1985, Rick Siskey became known as the founder of financial services firm Wall Street Capitol, with which he was no longer associated at the time of his death. He also invested in start-up companies and real estate. The family lived in a prominent home in SouthPark, and a YMCA branch in Matthews bears the family’s name.

This story was originally published February 1, 2017 at 3:48 PM with the headline "Widow of Rick Siskey says she will set aside $37.5M for investors harmed by alleged fraud."