On June 17, 2022, the Receiver emailed a Notice of the hearing on the Motion to Approve the ING Settlement to all approved investor claimants. Since that time, the Receiver has received numerous similar questions from investor claimants. In the interest of efficiency, the Receiver has prepared this “Frequently Asked Questions” (FAQs) document. If you have any questions after reviewing this document, please feel free to follow-up with an email. Because the Receiver has a very small staff, please allow for at least 7-10 days for a response.
Please note, depending upon the specific questions posed, the Receiver is also responding to individual investor claimant’s questions.
FREQUENTLY ASKED QUESTIONS (June 27, 2022)
Information on the September 12, 2022, Hearing to Approve ING Settlement and NEXT STEPS:
Step 1. Court ruled on Notice and set a Hearing Date of 9/12/2012
Step 2. After the Hearing, the Court will rule on pending Motion to Approve the ING Settlement.
Step 3. If Court grants the Motion, the Receiver will submit a Motion to Approve ING Distribution Plan and to Create a Bar Date. The Receiver will submit it directly after the Hearing (It is currently being drafted). He cannot submit it, before the Hearing date. The Distribution Plan outlines the steps of the distribution which includes instructions on how the Receiver will send out and receive the ING Waiver form (mentioned in the Notice, hiring a Distribution agent, DocuSign vs. USPS, first class mail etc).
Step 4. Once the Court rules on the Motion to Approve the ING Distribution plan (assuming the motion is granted), the distribution phase of the Receivership can begin.
Step 5. It is presently anticipated (assuming the Court rules favorably and relatively promptly) the ING Waiver forms will be sent to investors this fall.
Do I need to sign the Waiver form to receive a distribution from the ING Settlement?
Short answer is Yes. The Receiver will most likely be sending the Waivers via DocuSign. One of the requirements to be eligible to receive a distribution from the pending ING Settlement is a signed waiver which the Receiver must be in possession of before he can make a distribution to that investor claimant:
“The Distribution will provide restitution to you but that restitution will be conditioned upon the requirement that, you must first sign and return a document acknowledging the settlement amount, requesting payment, and waiving your rights to sue ING Bank. By signing the waiver, you release all claims, known or unknown, against ING Bank N.V. and its direct and indirect group companies, parents, subsidiaries, current and former employees, directors, officers, agents and insurers arising from or related to IB Capital FX, LLC (aka IB Capital FX (NZ) LLP) and accept this payment in full satisfaction thereof.”
Any settlement funds which the Receiver is unable to distribute will have to be returned to ING within 180 days from the date upon which the Receiver obtains the settlement funds from ING.
What is the exact ING Settlement Amount?
Short answer – The Receiver does not have the authority to disclose the amount of the ING settlement. As part of the terms of negotiating the pending ING Settlement, the Receiver was required to sign a confidently agreement with ING Bank which only allowed the Receiver to state how many cents on the dollar each investor would receive.
In what currency is the ING settlement being paid?
What is the exchange rate between Euros and US Dollars?
The exchange rate changes daily. The Receiver uses the following exchange rate site as an estimated reference. 1 EURO = $1.05 USD at today’s exchange rate retrieved June 20,2022 from https://www.xe.com/currencyconverter/convert/?Amount=1&From=EUR&To=USD
Why is it .31 cents and not .36 cents on the dollar of each investor claimant’s approved claim?
Since the date the Receiver entered into the ING Settlement, the Euro has declined in value compared to the US Dollar. As of June 20, 2022 the distribution would be for 31 cents on the dollar.
When will I receive a distribution (the money)?
Assuming the Court rules relatively promptly on the Motion to Approve the ING Settlement Distribution Plan, the Receiver estimates distributions will be made in late fall of 2022. Where are the other funds the Receiver has recovered? Additional funds the Receiver has recovered are being held in an IB Capital Receivership Account awaiting distribution.
Where are the other funds the Receiver has recovered?
Additional funds the Receiver has recovered are being held in an IB Capital Receivership Account awaiting distribution.
When will we receive a distribution separate and apart from the ING settlement?
The Receiver hopes to be able to make another distribution at the same time the ING settlement funds are being distributed (late fall of 2022).
How much will be paid in the second distribution?
The answer to this question depends on how quickly the Dutch Public Prosecutor and their equivalent in Slovakia can send the Receiver approximately $7.2 million presently on deposit in a bank in Slovakia.
If the Slovakian funds are received by the fall of 2022, the second distribution would be for approximately 54 cents on the dollar.
If the Slovakian funds are not received by the Fall of 2022, the second distribution would be for approximately 23 cents on the dollar.
If the Slovakian funds are not received by the Fall of 2022, the second distribution would be for approximately 23 cents on the dollar.
Will there be a third distribution?
The Receiver presently expects that there will be a third and likely, final distribution.
The source of the funds to be distributed would be the Slovakian funds if they are not received by the fall of 2022, in which case those funds would become part of the second distribution. The other source of funds for a third distribution would be from assets presently located in Morocco. It is very important to note, in the Kingdom in Morocco, the Receiver has been told numerous times how difficult it is to transfer funds out of Morocco. With that being said, he has also been told the Moroccan government needs to give their permission for transfer of funds to leave the Kingdom. It is the Receiver’s understanding; the Moroccan government may allow only a portion of the funds to leave the country.
I. Bank Accounts There are three accounts located in a bank in Morocco which are holding Moroccan Dirham. At today’s exchange rate, the combined funds in those three accounts is approximately USD $4.9 million.
II. Real Estate There are five (5) pieces of real estate. One has a home on it. Several of the properties have liens against them.
The Receiver has not been able to find hire a real estate broker to assist in brokering the sale of the real-estate. He has attempted to contact a number of recommended real-estate brokers in Morocco to dispose of the real estate. It may end up being impractical from a cost perspective to sell the real estate.
In summary, it is difficult to predict when, or if, the Receiver might come into possessions of some or any of the Moroccan assets. If 100% of these assets can be repatriated, this would allow for a payment of an additional 20 cents on the dollar.
Thank you for your questions and we hope this explains where we are in the process. We look forward to continuing to hear from you.
Who is the Receiver and what is his experience?
Guy Hohmann is a founding member of The Hohmann Law Firm . Mr. Hohmann has defended numerous class action/securities fraud cases against law firms and accounting firms; prosecuted numerous class action/securities fraud cases against accounting firms and hedge funds; defended accounting firms and law firms in hundreds of cases arising out of financial fraud; and has prosecuted numerous cases on behalf of Receivers of insolvent insurance companies of SEC appointed Receivers against directors and officers of the insolvent entity, as well as their outside law and accounting firms.
He was born in Corpus Christi, Texas in 1958. An Austin resident since 1991, Guy is also a licensed C.P.A. Guy has been selected by his peers to be included in the Best Lawyers of America, and he was named a Texas Super Lawyer by Thompson Reuters in 2010 and 2011. His practice focuses on commercial litigation, professional-liability litigation and insurance litigation, including first-party bad-faith and coverage matters.
What was the process used to appoint the Receiver?
When the U.S. CFTC filed its initial Complaint for Injunctive Relief, Civil Monetary Penalties and Other Equitable Relief against Senen Pousa, Investment Intelligence Corporation, dba ProphetMax Managed FX, Joel Friant, Michael Dillard, and Elevation Group, Inc., the Commission also filed a Motion for Ex Parte Statutory Restraining Order, Order for a Temporary Receiver, and Order to Show Cause re: Preliminary Injunction seeking certain relief from the Court, including the appointment of an equity receiver to administer the ProphetMax Receivership Estate. The Court granted this motion and entered the Statutory Restraining Order, appointing Mr. Hohmann to serve as the Receiver. Mr. Hohmann was not directly involved in the selection process but it is our understanding that he was one of three potential candidates submitted to the Court and the Court selected him for the position. A brief description of Mr. Hohmann’s qualifications and experience is available on the website. Unfortunately, we cannot provide any further information regarding the selection process employed by the Commission or the Court because the Receiver was not a party to the Commission’s initial motion or the Court’s order that appointed him.
How is the Receiver being paid (hourly, etc.)?
Under paragraph 25 of the Statutory Restraining Order, the Receiver and his counsel are entitled to reasonable compensation for their services to the ProphetMax Receivership Estate. We cannot publicly disclose any details about the potential fee structure for the Receiver or his counsel, but any compensation actually received by the Receiver and his counsel will be determined by Court order. In other words, the Court will ultimately determine the amount of compensation awarded to the Receiver and his counsel. More information may be available for your questions when the Receiver and his counsel file a request with the Court seeking payment for their services. Under paragraph 25 of the Statutory Restraining Order, the first such request must be filed within 60 days of September 18, 2012.
Why are IB Capital, ING, CFH Marketing or other entities not named in the lawsuit?
Various persons and agencies are investigating the alleged ProphetMax fraud, including the Receiver, federal regulators in the United States, and foreign regulators in other jurisdictions. Due to the confidential and sensitive nature of these investigations, the Receiver cannot comment on the progress of any investigation or the firms or persons who may be targeted by any investigation.
If an investor filled out a form on EVG’s website, do we have their information?
The Receiver should have your claim and contact information if you properly submitted your form to EVG. To confirm that the Receiver has your information, you may send an email to email@example.com and provide your name, contact information, initial investment, and total losses. Our staff will respond accordingly.
Are the membership fees paid to EVG included in the claims?
At this early stage of the Receiver’s investigation and the ProphetMax Receivership Estate, the Receiver cannot comment on whether EVG membership fees or any other fees may be included in investor claims.
Why is the $750,000 from Michael Dillard not being used to refund membership fees?
Based on the various court papers filed by the U.S. CFTC and the Receiver’s own investigation, the Receiver is aware that many investors remitted funds to Senen Pousa, Investment Intelligence Corporation, dba ProphetMax Managed FX, Joel Friant, Michael Dillard, and Elevation Group, Inc. for several purposes, including purported foreign currency investments, membership fees to Investment Intelligence Corporation dba ProphetMax Managed FX, and subscription fees to Elevation Group, Inc. At this time, the Receiver cannot publicly comment on the amount or source of assets that may be recovered from any Defendant, including Mike Dillard. In the future, however, this information may be disclosed in documents filed with the Court, and copies of such documents will be posted on the Receivership website once they have been filed.
At this early stage of the ProphetMax Receivership Estate proceedings and the various ongoing investigations in several countries, the Receiver cannot publicly comment on what funds could potentially be remitted to injured investors or the potential purposes for any future remittances. The amount of assets ultimately recovered by the Receiver could potentially impact how and for what purposes funds are remitted to injured investors, so the Receiver needs time to conduct his investigation and marshal recoverable assets before any determinations can be made.
The Receiver will file a status report with the Court on or before December 17, 2012. The report will provide more information regarding the status of the factual investigation and the potential recovery of assets for the Estate. I will post a copy of that report on the Receivership website once it has been filed.
Do I have to file complaints with both SEC and CFTC?
There is no need to file complaints with the SEC or CFTC. If you believe you have suffered any loss in this matter, then please send an email to firstname.lastname@example.org and provide your name, contact information, initial investment, and total losses.
Will your firm be charging me legal or any other fees? Will this be upfront or taken from any eventual recovered funds?
Neither the Receiver nor his counsel will charge any direct fees to investors. The Receiver and his counsel will bill their services to the ProphetMax Receivership Estate, and subject to court approval, any payments for these services will be remitted from funds within the Estate.
What relationship does the Receiver have with ASIC and how will the Receivership be funded?
As the Receiver for the ProphetMax Receivership Estate, Mr. Hohmann's role in these proceedings is to marshal and protect assets of the Estate for the benefit of individual investors. His specific duties and responsibilities are set forth in Section III of the Court’s Statutory Restraining Order. At this time, we are trying to coordinate and cooperate with regulatory authorities in other countries that appear to have been affected by the alleged ProphetMax fraud. Part of this effort includes the identification and seizure of assets for potential distribution to injured investors. We hope this international effort will allow us to recover frozen assets held outside the U.S., as we intend to use these funds to provide an equal, pro-rata distribution of recovered assets to all injured investors, regardless of nationality or citizenship. On the domestic front, the Court has already entered a Consent Order concerning Mike Dillard and Elevation Group, Inc., in which Mr. Dillard and Elevation Group agree to pay disgorgement and a civil monetary penalty as determined by the Court (see paragraphs 44-46). The disgorged funds may be available for the Estate and later distribution to injured investors.
Under paragraph 25 of the Statutory Restraining Order, the Receiver and his counsel are entitled to reasonable compensation for their services to the Estate, subject to court approval. For your convenience, paragraph 25 specifically states, “The Receiver and all personnel hired by the Receiver as herein authorized, including counsel to the Receiver, are entitled to reasonable compensation for the performance of duties pursuant to this Order and for the cost of actual out-of-pocket expenses incurred by them, from the assets now held by, or in the possession or control of, or which may be received by the Defendants. The Receiver shall file with the Court and serve on the parties, including Plaintiff Commission, periodic requests for the payment of such reasonable compensation, with the first such request filed no more than sixty (60) days after the date of this Order. Plaintiff Commission may object to any part of a request within 30 calendar days of service of a request. The Receiver shall not increase the hourly rates used as the bases for such fee applications without prior approval of the Court.”
At this early stage of the Estate proceedings and the various ongoing investigations in several countries, we cannot predict how long it will take to complete this process, what percentage of funds may be recovered for potential distribution to injured investors, or what fees may be charged to the Estate for Receiver services. These matters are inherently difficult to predict under normal circumstances and the international nature of the fraud and the potential seizure of assets in foreign jurisdictions adds an additional layer of uncertainty. There are various persons and agencies investigating the alleged ProphetMax fraud, including the Receiver, federal regulators in the United States, and foreign regulators in other jurisdictions. Due to the sensitive and highly confidential nature of these investigations, the Receiver cannot comment on the progress of any investigation, as any public comments could potentially hinder or undermine those investigations. Please know that we are working diligently for the benefit of injured investors and will continue to do so until all recoverable assets have been marshaled and seized for potential distribution to injured investors.
We will be filing a status report with the Court on or before December 17, 2012. The report will provide more information regarding the status of the factual investigation and the potential recovery of assets for the Estate. We will post a copy of that report once it has been filed.
How long does this process take?
At this early stage of the Estate proceedings and the various ongoing investigations in several countries, we cannot predict how long it will take to complete this process, what percentage of funds may be recovered for potential distribution to injured investors, or what fees may be charged to the Estate for Receiver services. These matters are inherently difficult to predict under normal circumstances and the international nature of the fraud and the potential seizure of assets in foreign jurisdictions adds an additional layer of uncertainty. There are various persons and agencies investigating the alleged ProphetMax fraud, including the Receiver, federal regulators in the United States, and foreign regulators in other jurisdictions.
Can you give me any information about the Australian liquidation of Investment Intelligence Corporation (IIC)?
As described in my June 24, 2013 Second Letter to Investors, a liquidator was recently appointed by the Australian court to liquidate IIC. As I informed you, I am in contact with the Australian liquidator about a potential plan of action, but I am not involved in the liquidation proceeding, do not have authority over the liquidator, and vice versa. However, if there is a joint distribution, we will be involved and have all the necessary investor information. I have seen the “Circular To Members” sent to investors from Blair Pleash at Hall Chadwick requesting you complete a “proof of debt” form. Although I cannot advise you regarding communicating with or cooperating with the liquidator, I believe it would be in your best interest to complete and return the form. Because I do not know to whom the Circular and form were sent, I am attaching it here for your convenience. [Letter: Circular to Members].
How do I create a compressed or zip file?
You will create a new folder on your desktop and save all your relevant documentation to that folder. Once you have everything saved you will right-click on the folder and Send To à Compressed (zipped) File.
Depending on the folder size, this could take a couple minutes.
You will see your zip folder in the same location as your original folder. It will also have the same name. The folder will be brown and have a “zipper” on it. Click here for a screen shot of the instructions to better assist you.