Banking

Rick Siskey Ponzi scheme victims win final approval for payment of ‘major settlement’

An inside look at Rick Siskey and one of Charlotte’s biggest frauds

For years, Charlotte businessman Rick Siskey built a a reputation as a savvy adviser to wealthy clients who lived a lavish lifestyle while also giving generously to charity. That all unraveled when he took his own life amid an FBI investigation th
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For years, Charlotte businessman Rick Siskey built a a reputation as a savvy adviser to wealthy clients who lived a lavish lifestyle while also giving generously to charity. That all unraveled when he took his own life amid an FBI investigation th

Investors duped by a Ponzi scheme operated by the late Charlotte businessman Rick Siskey are expected to receive at least 90 percent of their investments back as part of a major settlement that won approval this week from the Securities and Exchange Commission.

The $42 million settlement, which is expected to return tens of millions of dollars to investors, was approved last month by a bankruptcy court judge in Charlotte. After that ruling, the settlement still needed approval from the SEC.

While the deal — when coupled with a previous settlement — provides substantial compensation to Siskey’s victims, it remains unclear whether investors will receive further payouts to make them 100 percent whole.

Joe Grier, the trustee handling the bankruptcy case, told the Observer the hope is that additional funding sources, including Siskey’s estate, will provide more payments to investors.

“I’m confident they will get more,” Grier said. “I just don’t know how much more. It will take some time before we know what that additional compensation will be.”

A spokesman for the SEC declined to comment.

Large scheme

The roughly $42 million settlement was announced in December, nearly two years after Siskey, 58, took his own life in December 2016.

Earlier that month, the federal government filed notice in court that Siskey’s Sharon Road home could be subject to forfeiture because of possible fraud.

Filings in the ensuing bankruptcy case have revealed one of the most notorious investment frauds in Charlotte’s history.

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 filings. Some of the investors entrusted Siskey with hundreds of thousands of dollars apiece, the filings state.

Earlier deal

A separate deal that won court approval last year provides $10 million in total payouts to investors from insurance proceeds received by Siskey’s widow, Diane.

After Siskey’s death, Diane, her daughter and two of Rick Siskey’s former employees received a combined $49.5 million in insurance proceeds from four separate life insurance policies, court documents said.

December’s settlement immediately provides investors with about 68 percent of their claims when the deal is coupled with the $10-million accord.

The December deal calls for Diane Siskey and her daughter to pay a total of about $41.3 million, and for MetLife to pay $1 million. MetLife was once affiliated with Rick Siskey’s financial services firm.

Investors could receive up to 90 percent of their claims if they agree to release Diane Siskey, her children and MetLife from individual claims, according to terms of the December deal.

More money for investors?

Grier, the trustee, said one potential source of additional compensation for victims is more than $2 million that Diane Siskey has set aside.

Those funds are designed to cover any tax claims the IRS might make against income from the scheme, or any lawsuits she might face, Grier said. Diane Siskey is obligated to return to the trustee any funds that are not used for such purposes, he said.

Grier said that he has also filed suits against investors who made profits from Siskey investments. It’s not unheard of for a bankruptcy trustee to seek to have such investors disgorge their profits.

While that might provide more compensation for victims, Grier said he doesn’t expect “big dollars” from that source.

The settlements to date in the Siskey case are significant, Grier noted, because typically in Ponzi schemes investors wind up recovering pennies on the dollar.

“We’re getting them over 90 cents on the dollar of what they invested,” he said. “I think that’s a major settlement.”

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Deon Roberts has covered Charlotte’s financial services industry for The Charlotte Observer since 2013. His beat includes Bank of America and Wells Fargo. He attended Loyola University in New Orleans and is a native of Lafitte, La.
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