An inside look at Rick Siskey and one of Charlotte’s biggest frauds
Victims of the massive Ponzi scheme operated by Charlotte businessman Rick Siskey could recover at least 90 percent of their investments under a proposed settlement filed this week in federal bankruptcy court.
The deal, designed to return tens of millions of dollars to investors, comes nearly two years after the death of Siskey, who took his life after court filings revealed he was under investigation for fraud. Court approval is required for the settlement, and a hearing on the matter is set for January in Charlotte.
A separate deal approved this year awarded $10 million to victims out of life insurance proceeds received by Siskey’s widow, Diane. Those disbursements covered more than 100 investors and represented about 28 percent of each investor’s claim, according to court filings.
This week’s agreement, when coupled with the previous one, would immediately provide investors with about 68 percent of their claims, according to documents. But investors could receive up to 90 percent of their claims if they agree to release Diane Siskey, her children and insurer MetLife from individual claims, according to terms of the deal.
Court documents tout the deal as quickly resolving complicated and intensely disputed matters that would be extremely costly and time-consuming if they were otherwise dragged out in litigation. Also, suing Diane Siskey for the insurance proceeds might not be successful, the documents noted.
“In light of this risk, the settlement unquestionably provides a fair, equitable, and reasonable outcome for victims of Rick Siskey’s fraud,” the documents state.
Ultimately, according to the documents, the trustee handling the bankruptcy case hopes the settlement enables the victims to receive at least another approximately $4.7 million from the Siskey estate. That would result in 100 percent recovery on the investors’ claims plus some interest, documents state.
Siskey, 58, took his own life in December 2016. An FBI affidavit unsealed weeks after his death claimed he had operated a scheme for years.
Siskey enticed clients with promises of fixed returns in safe investments, but instead he used their money to fund a lavish lifestyle and pay off other investors, according to court filings. Some of the investors entrusted Siskey with hundreds of thousands of dollars apiece, filings state.
For Charlotte, it’s become one of the biggest investment frauds in the area’s history.
MetLife, Diane Siskey and private equity firm Stone Street Partners, which was once affiliated with Siskey, are among the parties that agreed to this week’s settlement.
According to a lawsuit filed last year by former business associates of Rick Siskey, his “Siskey Team,” which included his wife and other business associates, started working with MetLife in the late 1990s. MetLife played a key role in setting up Siskey in a prominent SouthPark office building on Sharon Road, and its well-known brand gave Siskey’s operation “stature and credibility,” the suit said.
After Siskey’s death, Diane Siskey, her daughter and two of Rick Siskey’s former employees received a combined roughly $49.5 million in insurance proceeds from four separate life insurance policies, according to court documents.
This week’s deal calls for Siskey and her daughter to pay a total of about $41.3 million, and for MetLife to pay $1 million.
Observer archives contributed.