ALBUQUERQUE, N.M.—The lawyer credited with giving Albuquerque real estate executive and admitted Ponzi schemer Doug Vaughan the idea for raising cash through promissory notes has reached a settlement in the case.
Sylvain Segal agreed to have his professional liability insurance carrier pay $525,000 to the trustee in the bankruptcy case of Vaughan Company Realtors, the Albuquerque Journal reported Tuesday ( ).
The settlement came as the trustee worked to meet Wednesday’s deadline for filing so-called claw-back lawsuits that seek to recapture some of the $75 million lost by 600 investors around the country.
Nearly 150 such suits had been filed by Tuesday, and attorney James Askew of Arland & Associates said he expected to file about 10 more. He said he did not have an estimate of the total amount of money those claims would seek to recapture.
While many of the lawsuits are against big money investors and accused insiders who made huge profits over the years with interest rates of 20 percent or more on loans to Vaughan’s real estate company, others go after much smaller investors and people who were net losers in the scheme.
The suits claim the victims knew or should have known the rates of return were unrealistically high.
A group of victims has a noted New York attorney and victim of infamous Ponzi schemer Bernie Madoff to help fight the claw-backs. Helen Davis Chaitman confirmed she has been retained but has declined to say how many Vaughan victims have signed on.
In the Segal settlement, which must be approved by the bankruptcy court, Segal denies any knowledge or liability in the Ponzi scheme. Much of Vaughan’s literature featured his name and credited him with coming up with the promissory note program.
Vaughan pleaded guilty to fraud and other charges in an agreement with prosecutors in December and faces 10 to 12 years in prison.
