A woman caught in the fallout from a local Ponzi scheme that allegedly swindled more than $31 million from investors says the ordeal has been a “nightmare.”
“I’ve received anonymous calls. One said, ‘Your throat could be slit, your dog could be poisoned, your house could be burned,’” said Angie Jefferson, the onetime office manager of former Chattanooga foreign currencies trader Luis Rivas.
“They (the government) have frozen every penny of my personal money,” she said. “I am unable to hire an attorney. I am unable to find an apartment to live in. If it weren’t for my family and friends, I’d be homeless.”
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Beginning in March, 2007, authorities say Luis Rivas and about 200 employees in Chattanooga and four other locations across the Southeast convinced people to invest their money in the foreign currencies market. The ruse was actually a “classic Ponzi scheme,” authorities say, where Mr. Rivas paid fraudulent dividends to earlier investors with money submitted by later ones. He is charged in U.S. District Court with 19 crimes and will stand trial in Chattanooga on July 20.
Aside from the federal criminal proceeding against Mr. Rivas — he is accused of orchestrating the scheme and is charged with 19 crimes ranging from wire fraud to money laundering — civil actions filed by the government against Ms. Jefferson and three other separate parties are demanding that the defendants fork over the fruits of the alleged scam.
Those individual lawsuits go hand-in-hand with an overarching involuntary bankruptcy proceeding against Mr. Rivas that seeks to recoup millions of dollars for about 500 investors who were promised enormous returns if they agreed to invest with the charismatic businessman.
Authorities claim Mr. Rivas actually used money from later investors to pay fraudulent returns to earlier ones, all the while pocketing most of the money and using it to finance a lavish lifestyle. He now sits broke at the Silverdale Detention Center and is awaiting his July trial, which could land him in prison for life if he is found guilty.
Ms. Jefferson appeared in U.S. Bankruptcy Court in Chattanooga on Thursday as an observer during a status hearing on the bankruptcy proceedings. She often rolled her eyes and acted incredulous when lawyers suggested that all her money be placed in the care of the court until the individual lawsuit against her is resolved.
There is no question that Ms. Jefferson is “somewhat of a victim,” said Grey Steed, the bankruptcy trustee hired to find Mr. Rivas’ assets. “But there are some real questions as to what role she actually played in all this.”
Mr. Steed and bankruptcy attorney Cara Alday said the money Ms. Jefferson has in frozen accounts, which totals about $55,000, actually came from investors and therefore must be handed over. They noted that there is “much more” money Ms. Jefferson is believed to know about, but Mr. Steed and Ms. Alday declined to go into details.
Ms. Jefferson said after the hearing that she has been vilified by the government and others who she said believe she should be in jail along with Mr. Rivas.
Authorities have claimed that on May 21, 2008, about a week after the involuntary petition for bankruptcy against Mr. Rivas was filed, Ms. Jefferson withdrew $1.6 million from a bank account and also went on the lam with Mr. Rivas.
“The truth is, I was just doing my job. I was doing what (Mr. Rivas) told me to do,” Ms. Jefferson said. “Now the government is going after my personal money. That’s money I earned from doing my job.”
But Ms. Jefferson, who worked as a volunteer coordinator at a prominent local charity, said she never had any knowledge that anything Mr. Rivas was doing was illegal.
“If I had known it was a Ponzi scheme, I would never have worked for him,” she said.
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