West Palm Beach bank makes payout to swindled investors

Eric Ostroff | January 4, 2005

Associated Press
January 04, 2005

FORT LAUDERDALE, Fla. – Investors who were swindled out of about $19 million in a massive Ponzi scheme, including many elderly people who lost their life savings, have won their first significant reimbursement – a $2.25 million settlement by a bank in a bankruptcy case.

A bankruptcy judge approved the settlement with Fidelity Federal Bank & Trust in West Palm Beach, where the Pheonix Financial Group held its corporate accounts, and a bankruptcy trustee in November. The money was recently deposited with a trustee.

It was the single largest reimbursement to the investors and creditors, said Michael Budwick, who represents the bankruptcy trustee.

“It is very significant,” he said. “This is the most significant event in the case.”

The bank didn’t admit any wrongdoing in the settlement and was unaware of criminal activity by Pheonix founder Thomas D. Abrams, said Fidelity Federal’s corporate counsel, Christopher Cook.

Abrams pleaded guilty to 12 counts of fraud and three of money laundering and was sentenced to 25 years in federal prison in September 2002. The 11th U.S. Circuit Court of Appeals in Atlanta rejected his appeal of the sentence in September.

Prosecutors said Abrams defrauded 100 to 150 people of more than $30 million. A majority were over age 60 and lost all or most of their life savings. At least three have died, and others have returned to work or are on public assistance.

Investors entrusted their money to Abrams with instructions to put it into secure stocks and certificates of deposit. Instead, he used it to pay other investors, underwrite celebrity appearances and entertainment for charity shows and support his image as a wealthy philanthropist.

West Palm Beach bank makes payout to swindled investors. January 4, 2005. Associated Press January 04, 2005 FORT LAUDERDALE, Fla. – Investors who were swindled out of about $19 million in a massive Ponzi scheme, including many elderly people who lost their life savings, have won their first significant reimbursement – a $2.25 million settlement by a bank in a bankruptcy case. A bankruptcy judge approved the settlement with Fidelity Federal Bank & Trust in West Palm Beach, where the Pheonix Financial Group held its corporate accounts, and a bankruptcy trustee in November. The money was recently deposited with a trustee. It was the single largest reimbursement to the investors and creditors, said Michael Budwick, who represents the bankruptcy trustee. “It is very significant,” he said. “This is the most significant event in the case.” The bank didn’t admit any wrongdoing in the settlement and was unaware of criminal activity by Pheonix founder Thomas D. Abrams, said Fidelity Federal’s corporate counsel, Christopher Cook. Abrams pleaded guilty to 12 counts of fraud and three of money laundering and was sentenced to 25 years in federal prison in September 2002. The 11th U.S. Circuit Court of Appeals in Atlanta rejected his appeal of the sentence in September. Prosecutors said Abrams defrauded 100 to 150 people of more than $30 million. A majority were over age 60 and lost all or most of their life savings. At least three have died, and others have returned to work or are on public assistance. Investors entrusted their money to Abrams with instructions to put it into secure stocks and certificates of deposit. Instead, he used it to pay other investors, underwrite celebrity appearances and entertainment for charity shows and support his image as a wealthy philanthropist. . Eric Ostroff, Other News‘It Really Worked’: Opposing Firms Join Forces to Save a Business From Bankruptcy, February 3, 2017, 5 Questions In The Cardinals Hacking Scandal, July 20, 2015, 5 Ways To Craft An Ironclad Celebrity Chef Deal, September 16, 2013, Archive. March 2024 November 2023 April 2023 January 2023 November 2022 June 2022 May 2022 April 2022 March 2022 . MRB. Contact us, Our attorneys, careers. About. Firm overview, Our Values, Community involvement, Representative matters. Pracrtice. Real Estate, Commercial Litigation, Receiverships and Assignments, Bankruptcy and Restructuring. In the News, Announcements, Film Videos. 2018 Meland, Russin, Budwick. ALL RIGHTS RESERVED.