By Bill Poovey
The Associated Press
After losing $432,000 in a Ponzi scheme, an East Tennessee group that repopulates the eagle population says it will fight a bankruptcy filing from the investment scam that seeks another $814,000.
An attorney for Pigeon Forge, Tenn.-based American Eagle Foundation said the nonprofit group is a "net loser" from years of investing with stock trader Dennis Bolze, of Gatlinburg, Tenn.
Bolze has pleaded guilty to federal fraud charges and is to be sentenced Aug. 26 for running a scheme that took in $21 million, some from foreign investors. Some money was used to repay early investors and the actual loss was closer to $12.9 million.
A lawsuit by Bolze's court-appointed bankruptcy trustee seeks to recover $814,000 that the filing contends was a benefit for the foundation from "fraudulent transfers."
A foundation statement said it cares for and restores bald eagles, conducts educational programs and has released more than 100 captive-hatched bald eaglets.
Foundation President Al Cecere declined comment Thursday and referred questions to attorney Michael Quilling, of Dallas.
The foundation statement said it invested with Bolze's Advanced Trading Service "for several years, which it thought was involved in a legitimate, credible and secure investment program."
Quilling said the financial loss from the scheme is disappointing but "hasn't damaged" the 25-year-old foundation's ability to function.
"We have weathered that storm," Quilling said.
He said the foundation is looking to recover losses, not pay.
"Contrary to the implications in the lawsuit, the foundation invested more funds with ATS than it ever received back," the foundation statement said. "If the bankruptcy trustee is successful in recovering funds from other sources, we fully expect to receive a portion of those recoveries based upon our status as a victim and our claims in the bankruptcy proceedings."
The lawsuit filed on behalf of bankruptcy trustee G. Wayne Walls says records show the investor transferred $814,000 to the foundation between January 2005 and November 2008 and that money is "recoverable." Walls's attorney, Bob Bailey, did not return telephone messages seeking comment.
Quilling said similar suits have been filed against other Bolze investors. He said the suit may be answered with a motion to dismiss.
"We will be timely filing an answer or another responsive pleading," he said.