The trustee unraveling the Rick Siskey Ponzi scheme case in bankruptcy court has reached a $220,000 settlement with a former Siskey associate over a life insurance payout he received, according to a court filing Wednesday.
Siskey, 58, took his own life in December 2016, days after court filings gave the first public indication that he was under investigation for fraud. An FBI affidavit unsealed weeks later alleged Siskey – who long sold insurance and other financial products to Charlotte clients – was operating a Ponzi scheme for years, costing investors millions.
Court-appointed trustee Joe Grier and his team are now sorting through claims from investors and accumulating assets that can be distributed to victims. The agreement disclosed Wednesday is the first settlement of its kind in the case.
As part of the bankruptcy court investigation, the filing says the trustee determined that Siskey had a MetLife insurance policy with a $10 million death benefit that paid out in January 2017 to four beneficiaries, including Benjamin Lowder. Siskey made Lowder – a former employee of Siskey Industries and MetLife registered representative – a beneficiary 12 days before his death, and Lowder received a $250,000 payment, the filing says.
Life insurance typically pays out in suicides if the death occurs more than two years after the policy is taken out.
Based on records, the trustee believes proceeds of the Ponzi scheme were used by Siskey to pay insurance premiums on the policy, the filing says. Some investors have previously suggested that their own money may have been used to pay life insurance premiums, including for policies that provided benefits to Siskey’s widow, Diane.
The trustee, according to the filing, demanded Lowder turn over the full $250,000 in proceeds, and he promptly responded and entered negotiations. In the end, the agreement calls for Lowder to pay $220,000 to resolve any cause of action the trustee might bring. The agreement would return the money to the bankruptcy estate, to later be distributed to victims.
“In reaching this Settlement, the Trustee has taken into consideration the financial condition of Lowder as well as the cost of pursuing the Demand via litigation against the realistic prospective of recovery of 100 percent of the same,” the filing says.
The agreement needs court approval. A hearing has been scheduled for February 12.
Grier and lawyers representing Lowder declined to comment. The filing doesn’t provide details on the other beneficiaries.
Investors have yet to find out how much money they will ultimately get back in the case, which is still moving through bankruptcy court.
Siskey’s records showed that investors were owed around $51 million, including interest. But a Nov. 1 report by a court-appointed bankruptcy trustee indicated investors could receive much less, if promised interest and other gains are excluded. For example, investors in one fund submitted claims of $29.6 million, but the trustee said they might only get $17.5 million back.