FedReceiver.com Logo
case_summary Image

ENGAGEMENT: Advanced Money Receivership Estate

ENGAGEMENT: Advanced Money Receivership Estate Case Summary

The following is a brief summary of the case. This page is not regularly updated. For current updates, please click here.

ENGAGEMENT: Advanced Money Receivership Estate

The Receiver was appointed in the case titled SEC v. Plus Money, Inc., et al. (the "Plus Money Case") on May 16, 2008. In the Plus Money Case, the Securities and Exchange Commission alleged that, through a number of corporate entities (the "Plus Money Receivership Entities"), Defendant Matthew La Madrid and others committed violations of the federal securities laws, essentially by perpetrating a Ponzi-like investment scheme, whereby investors in the Plus Money Receivership Entities were paid returns, not from legitimate profits from investment, but from money contributed by later investors. The Receiver was tasked with, among other things, taking control of the Plus Money Receivership Entities, performing a forensic accounting of the financial activities of the Plus Money Receivership Entities, recovering available assets, and – if possible – distributing funds to investors.

While the Receiver was performing his duties in the Plus Money Case, the Securities and Exchange Commission filed a second lawsuit, titled SEC v. Pacheco, et al. (the "Pacheco Case"), alleging that, through a number of corporate entities (the "Pacheco Receivership Entities"), Defendant Moises Pacheco and others committed violations of the federal securities laws by operating a Ponzi-like investment scheme similar to that alleged in the Plus Money Receivership Case. Matthew La Madrid and a number of Relief Defendants in the Plus Money Case were named as a Relief Defendant in the Pacheco Case.

In the Pacheco Case, the Securities and Exchange Commission alleged that approximately $3 million of the funds raised by the Pacheco Receivership Entities had been transferred to the Plus Money Receivership Entities, before being commingled with $7 million raised by the Plus Money Receivership Entities, and transferred to a third party. The Receiver was able to confirm the Securities and Exchange Commission’s allegation, based upon the results of his forensic accounting.

In other words, the Plus Money Case and the Pacheco Case are related because they involve some of the same parties, and a portion of the funds raised by the scheme alleged in the Pacheco Case were transferred to the Plus Money Receivership Entities before being dissipated to a third party.

Because of this relationship, and because the Receiver’s forensic accounting in the Plus Money Case had yielded information relevant to the Pacheco Case, the Securities and Exchange Commission petitioned the presiding Court (which has jurisdiction over both the Plus Money and Pacheco Cases) to appoint the Receiver in the Pacheco Case as well.

The Receiver was appointed in the Pacheco Case on August 27, 2010. As with the Plus Money Case, the Receiver has been tasked with, among other things, performing a forensic accounting of the financial activities of the Pacheco Receivership Entities, recovering available assets, and – if possible – distributing funds to investors.

The Receiver has funded the estate of the Pacheco Receivership Entities by securing Court permission to transfer approximately $729,000 in funds recovered by the Plus Money Receivership Entities (but properly allocated to the Pacheco Receivership Entities), and has completed a preliminary forensic review and accounting of certain Pacheco Receivership Entity financial transactions. The Receiver’s accounting appears to support the Securities and Exchange Commission’s allegation of a Ponzi-like investment scheme.

The Receiver has also filed two Interim Reports in the Pacheco Case, each of which is available at www.fedreceiver.com. At present, the Receiver is conducting a more detailed forensic accounting, and will file another Interim Report with the presiding Court reporting his further progress and plans for administering the estate of the Pacheco Receivership Entities in a few months. Interim Reports will be filed approximately every 90-120 days, depending upon the status of the Receiver’s efforts.