A federal judge last week approved the payout of more than $4.6 million to 1,474 victims of convicted Ponzi schemer George Theodule, who ripped off church-going, working-class Haitian Americans in South Florida and around the county.
Many of his victims entrusted him with their life savings.
Theodule billed himself as a pastor and used a radio show to recruit investors into a $68 million Ponzi scheme, holding himself out as a financially gifted man-of-God who could double investors’ money. He pleaded guilty to wire fraud and was sentenced to 12-and-a-half years in federal prison in 2014.
“We’ve been chasing everything we could,” said Jonathan Perlman, an attorney at Genovese Joblove who acted as a court-appointed receiver in the case. “Thirty-something lawsuits, pursuing George and all his scoundrels. Now we’ve collected the money and we’re going to distribute it.”
The Securities and Exchange Commission charged Theodule with operating a Ponzi scheme in 2008. Perlman and colleague W. Barry Blum worked to recover money from Theodule’s company Creative Capital Consortium, which had $28,000 in its account at the time the fraud was discovered. They were able to seize and sell assets including homes, jewelry, antiques and cars purchased by Theodule and his cronies. The great majority of the restitution funds came from lawsuits brought against the financial institutions Theodule used to conduct his fraud.
$3,157Average restitution to be received by Theodule victims
Theodule’s victims will receive an average payment of $3,157. The claims range from about $200 to more than $170,000. Victims will receive 34 percent of their approved claims.
“These are not your typical Ponzi scheme victims,” Blum said. “These are people who kept their money at home. They didn’t trust banks. People were cashing out pre-paid college funds, IRAs, taking out mortgages to invest with him. It’s disgraceful to prey on church-going and working-class people.”
“I lost everything,” Anithe Grigou Saint Jean, a Theodule victim, told the Miami Herald last year. “It hurt so bad. I don’t have no savings.”
I lost everything.
Anithe Grigou Saint Jean
U.S. District Judge Daniel Hurley thanked the attorneys in West Palm Beach court when approving the payout.
“The receiver has done an extraordinary job,” Hurley said, according to a court transcript. “You and your law firm deserve an enormous amount of credit ... and I can't tell you the admiration I have for the effort that has been exerted here. ... You set standards for the entire Bar.”
A court had previously approved a $3.175 million settlement between the receiver and Wells Fargo. Theodule used accounts at Wachovia, which was later purchased by Wells Fargo, in his scheme. The receiver also won settlements against Bank of America ($2.75 million), TD Ameritrade ($1.25 million) and an online brokerage now owned by Charles Schwab Corp. ($4.57 million), according to court records. Fighting the banks was time-consuming, and legal costs and fees ate up some of the money recovered.
Victims will start receiving checks this week, in time for Christmas, Perlman said.
“For a lot of these people, they thought this was money they’d lost forever,” he said.
A smaller amount of additional funds will be distributed at a later date. More information for investors is available at http://www.creativecapitalreceivership.com/.