Scores of investors, including some high-profile names, have filed claims in bankruptcy court as the fallout continues from an alleged Ponzi scheme run by the late Charlotte businessman Rick Siskey.
The largest claim made by Wednesday’s deadline – $17.4 million – came from Stone Street Partners, the private equity firm once affiliated with Siskey that filed a lawsuit this week against his estate and his widow.
The claims also featured some prominent names from sports and entertainment.
Social media personality and actor Nash Grier, who is from the Charlotte area, submitted a claim for $105,000. And the Observer has previously reported that Wichita State basketball coach Gregg Marshall ($246,669) and Charlotte businessman and former CBS broadcaster Billy Packer ($1.9 million) were also Siskey investors.
Other notable claims came from Stone Street Partners employees Paul Porter ($5 million) and Dawn King ($4 million), according to court documents.
Siskey, 58, took his own life in December, days after court filings gave the first public indication that he was under investigation for fraud. An FBI affidavit unsealed in January alleged he was operating a Ponzi scheme for years, costing investors millions.
Four Siskey companies have been pushed into federal bankruptcy court in Charlotte, and investors were submitting claims up to Wednesday’s deadline. The court-appointed bankruptcy trustee, Joe Grier (no relation to Nash Grier), said he is still reviewing all claims. His task is to assess what investors are seeking and then to distribute the available assets.
It’s difficult to total up the amount claimed by investors because there are duplications among the four companies and among family members. Earlier indications from attorneys and court documents have suggested investors might be owed around $50 million.
That figure would not include the claims made by Stone Street Partners, a firm previously named Siskey Capital that said in its suit this week that its business had been fatally wounded by its past association with Siskey. Porter, King and businessman Marty Sumichrast – who started the firm with Siskey – have said they did not learn of Siskey’s illegal activities until the investigation became public last year.
Stone Street’s suit also alleged Siskey’s widow, Diane, “actively participated” in her late husband’s Ponzi schemes, received millions in ill-gotten gains and is still hiding significant funds offshore.
Her attorney, Thomas Walker, responded on Friday with this statement: “Since the day this tragedy unfolded, Diane Siskey has cooperated with all investigating authorities to get to the bottom of what happened. She adamantly denies any wrongdoing or complicity involving the allegations made against her late husband and intends to defend herself against these accusations.”
The suit also named the MetLife insurance company as a defendant. Siskey’s former firm, Wall Street Capitol, was associated with MetLife, which said this week it was reviewing the suit.
“It is tragic that so many good people invested and lost their money in the Siskey Ponzi scheme,” said Jim Smith, an attorney with Nexsen Pruet representing Stone Street. “Sadly, they are not the only victims of the Siskey fraud. Stone Street Partners and its investors are victims too, as are Dawn King and Paul Porter who invested their professional careers and livelihoods. All those victims have been devastated by Siskey’s fraudulent and illegal conduct, and this lawsuit is brought against those responsible.”
Lane Williamson, an attorney for the Siskey estate, has said he was disappointed by the Stone Street suit because the estate will “have to expend resources to defend litigation that would have been better utilized to make restitution for defrauded investors.”
Diane Siskey has pledged to set aside $37.5 million of the $47 million in life insurance proceeds from her husband’s death for investors. Proceeds from the sale of the couple’s home and an estate auction are also expected to benefit investors. Grier, the bankruptcy trustee, has said he expects to make a “substantial distribution” to investors.