About $2 million in cash has been recovered so far in the financial investigation of a local foreign currencies trader who is accused of bilking investors out of millions, records show.
While Luis H. Rivas has not been seen since late May when he unexpectedly shuttered his Chattanooga office, bankruptcy officials are wasting no time trying to freeze the businessman’s known bank accounts and recover lavish gifts he’s accused of giving employees. Officials hope to eventually reimburse the 510 investors who collectively lost an estimated $31 million in the past 12 months on Rivas’ financial advice.
U.S. Bankruptcy Judge John Cook granted a 60-day preliminary injunction Wednesday barring 12 financial institutions from allowing any transactions on the accounts owned there by Mr. Rivas. Judge Cook forced Mr. Rivas into involuntary bankruptcy earlier this month, setting off a frenzied financial investigation amid concerns that Mr. Rivas was trying improperly to liquidate his assets and leave the country.
A federal criminal investigation is pending against Mr. Rivas, but no charges have been filed.
Meanwhile, Wednesday also marked the first day of legal depositions with those believed to have received money and gifts from Mr. Rivas, as well as having knowledge of the classic scam investigators say he ran.
Karen Goldman, a former employee in Mr. Rivas’ Chattanooga office where 40 people worked as currency traders, handed over a mink coat, two Gucci purses and about $2,000 worth of jewelry during her deposition, local attorney Cara Alday said.
Ms. Alday is assisting U.S. Bankruptcy Trustee Grey Steed in his financial investigation, which includes finding people who might have benefited from Mr. Rivas’ generosity to the detriment of investors.
“I’m firmly convinced people are out there holding onto these things,” Mr. Steed said, adding they all could be subject to criminal prosecution under U.S. bankruptcy law if they do not forfeit what they received from Mr. Rivas.
Mr. Steed said he has interviewed nearly 100 people since his investigation began and has found evidence that Mr. Rivas’ girlfriend Angie Jefferson, who officials believe is with him now, withdrew $1.6 million from a bank account on May 21.
Mr. Steed is seeking that money, as well as all the money in the other known bank accounts. He said the banks have until June 30 to inform him how much money is in the accounts.
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