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Taxation of Ponzi Clawbacks

WATCH THIS 50-MINUTE EDUCATIONAL VIDEO: The Ponzi Scheme Clawback. Presented by Richard S. Lehman, U.S Tax Attorney

This presentation is a Certified Accredited CLE Course by The Florida Bar.

click here to watch on youtube

The Ponzi Clawback And The Value Of The Mitigation Procedure

A Ponzi Scheme Clawback of profits is typical in many Ponzi Schemes.

Ponzi Scheme Trustees appointed to achieve fairness among defrauded investors have successfully recovered billions of dollars from Ponzi Scheme investors who withdrew funds from the Scheme even though there were indeed no real profits at all in a Ponzi Scheme. Everyone but the promoter eventually loses money. The promoter usually goes to jail and losses money.

Those investors lucky enough to have escaped the Ponzi fraud and taken their profits early in the scheme, remained profitable until the Trustee “CLAWED BACK” their false profits.

A Ponzi Scheme “Clawback” is accomplished when a Trustee obtains refunds from those who benefitted from the early “profits distributions” by the Ponzi Scheme.

Clawbacks of Ponzi Scheme profits from the innocent investor who first benefitted from the Scheme can receive a unique treatment from a tax standpoint. This is because of a special Internal Revenue Code Section that applies to clawed back profits. Read full article here.

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