Judge Approves Deal for Victims of Ponzi Scheme

     HOUSTON (CN) – An investment advisory firm and its CEO will pay $50,000 to settle claims that they fraudulently received assets meant for Ponzi scheme victims, a federal judge ruled.
     Texas businessman Albert Kaleta, Kaleta Capital Management and talk-radio host Daniel Frishberg defrauded investors through a $15 million Ponzi scheme involving promissory-note securities, according to charges by the Securities and Exchange Commission.
     Albert Kaleta agreed to settle the SEC’s claims for $3.2 million.
     In a November 2009 complaint, the SEC listed BusinessRadio Network LP dba BizRadio and Daniel Frishberg Financial Services Inc. dba DFFS Capital Management Inc. as relief defendants.
     U.S. District Judge Nancy Atlas appointed Thomas Taylor as receiver for Kaleta Capital Management and the two relief defendants.
     The court approved a $1 million settlement between the receiver and Kaleta in May.
     In his efforts to recover investor funds, Taylor also filed a complaint. Among other claims, Taylor said Barrington Financial Advisors and CEO William Heath acquired DFFS Capital Management’s assets through fraudulent transfers.
     Atlas approved a settlement on Tuesday that addresses the receiver’s claims.
     The settlement requires Barrington Financial Advisors and Heath to pay $50,000 in exchange for release from any claims by the receivership estate.
     “The court recognizes that the money to be paid by the Barrington defendants in settlement is not very large,” Atlas wrote. “However, the court concludes that there is a likelihood of potentially significant litigation expenses, as well as large attorneys’ and receivers’ fees, were this case to be litigated fully. These fees and expenses would seriously deplete any recovery that likely could be obtained from litigation. There appear to be meaningful litigation and collection risks inherent in the claims the receiver asserts against the Barrington defendants. The settlement, on the other hand, has the advantage of providing greater likelihood of collection of the settlement sum. The court therefore finds that the proposed settlement is fair, equitable, and reasonable, and is in the receivership estate’s and its claimants’ best interests.”

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