The Ponzi Book
A Legal Resource for Unraveling Ponzi Schemes
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By
Kathy Bazoian Phelps
and
Hon. Steven Rhodes


Published by
LexisNexis®

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Endorsements for The Ponzi Book

"Kathy Phelps and Judge Rhodes have crafted nothing short of a "Ponzi law Bible." It is a superb treatise. Anyone practicing in this area will find The Ponzi Book exhaustive, insightful and enormously useful."

David S. Mandel
Mandel & Mandel
Miami, FL

"As one of the leading attorneys representing Irving Picard in the Madoff matter, I find your expertise in the Ponzi world not only to be incredibly impressive, but your perspectives always valuable and exceptionally practical -- a superb resource for practitioners and market players alike. I simply wanted to drop a brief note to introduce myself and let you know that from one professional to another, I greatly admire your continuing body of work."

Mark A. Kornfeld
Baker Hostetler
New York, NY

"On three days in August, 2012, the SEC brought three separate fraud charges against multi-million dollar Ponzi schemes - one alleged to be an online $600 million scheme, and another alleged to involve a former collegiate football coach and hall of fame inductee. The SEC actions were yet another reminder that while the 'hook' of the schemes vary, the lure of supposed low-risk, high-return investments has led to a proliferation of Ponzi scheme fraud during the last decade. Multi-million dollar Ponzi schemes continue to generate new litigation in the wake of the massive Bernie Madoff scandal.

"The Ponzi Book is an 800-page reference guide for unraveling the complicated and evolving legal issues arising from Ponzi schemes in bankruptcy, receiverships and in other third-party litigation. The book is a thorough, well-organized, and well-written reference for lawyers and other professionals confronting Ponzi scheme issues. It addresses issues based on federal law, with detail about how different circuits approach cases and, by necessity, with less emphasis on state law tort claims.

"Several chapters of The Ponzi Book are dedicated to the prosecution and defense of fraudulent transfer and preference lawsuits (clawbacks) that are commonly filed in Ponzi scheme bankruptcy cases. Additional chapters discuss the broad array of litigation claims that can be pursued against various types of defendants with knowledge of or involvement in a Ponzi scheme, and the potential defenses to such claims.

"Separate chapters address 'deepening insolvency' theories, standing, and in pari delicto defenses as they arise in Ponzi scheme litigation. Since Ponzi schemes often result in criminal prosecutions, The Ponzi Book also covers Fifth Amendment as well as attorney-client privilege issues, and what happens to competing claims for assets in parallel insolvency and criminal proceedings.

"The Ponzi Book also provides a review of differing approaches and methodologies available in the claims distribution process, as well as recent tax law changes affecting and of interest to Ponzi scheme victims and their tax advisors.

"Finally, and for those representing the alleged facilitators (third parties such as financial institutions, accountants, brokers, and attorneys alleged to have facilitated the Ponzi scheme) and early customers of a Ponzi scheme, the book discusses the tendency of federal courts to narrowly apply federal claims for relief asserted by victims against third party facilitators of Ponzi schemes. The book confirms the need for such victims to look to tort claims under their local state laws - a subject not detailed in the book.

"In summary, this is an important resource for those representing parties in Ponzi scheme cases, including plaintiffs such as receivers, trustees and creditor/investor committees, as well as potential defendants such as clawback defendants and facilitators. The latest discovery of three multi-million dollar Ponzi schemes underscores the timeliness of this excellent resource."

Tom Phinney
Parkinson Phinney
Sacramento, CA
Co-Vice Chair
Insolvency Law Committee
Business Law Section
State Bar of California

Dennis Wickham
Seltzer Caplan McMahon Vitek
San Diego, CA

Elissa D. Miller
SulmeyerKupetz
Los Angeles, CA
Co-Chair
Insolvency Law Committee
Business Law Section
State Bar of California

"The Ponzi Book is one-stop shopping for the facts needed to understand the complex fall-out from a collapsed Ponzi scheme as well as the legal strategies that exist and are required to unravel it."

Irving H. Picard
Trustee of Bernard L. Madoff Investment Securities, LLC
Baker Hostetler
New York, NY

"The Ponzi Book will become a priceless resource for those who face the daunting task of creating order within the financial and emotional chaos inherent in a massive Ponzi scheme. I only wish someone would have prepared such a valuable compendium when I handled my first Ponzi case thirty years ago. I had to obtain my experience the proverbial 'hard way' as outlined in many of those cases which are cited in the footnotes.

"I believe this book will become a virtual fountain of knowledge for anyone either presently involved or expecting to be involved in a Ponzi case. Personally, I will keep it on my desk and within arm's reach."

R. Todd Neilson
Berkeley Research Group
Trustee of Reed Slatkin
Los Angeles, CA

"There's little doubt that Charles Ponzi would be proud of how his infamous brainchild has grown and developed over the years, becoming more complex in execution and breadth. Indeed, the perpetuators of his schemes have grown ever more sophisticated in their efforts, making Mr. Ponzi's modest beginning look almost quaint in retrospect. With the multi-billion dollar Ponzi schemes that have become unearthed since the capital market meltdown of mid-2008, the legal and financial complexities in their unwinding have become a specialty unto themselves in the law.

"Fortunately for the professional faced with the daunting task of unwinding (or defending) the Ponzi scheme, help has finally arrived! The Ponzi Book: A Legal Resource For Unraveling Ponzi Schemes by Kathy Bazoian Phelps, Esq. and Judge Steven Rhodes is a unique, and the definitive, resource in this area. The book is well organized, exhaustively researched, and covers areas well beyond the obvious in such matters, such as privilege issues, litigating against foreign nationals and obtaining discovery from abroad (as we now know, fraud knows no national boundaries), and the tax issues that come with such schemes. It is in all respects the 'go to source' in these matters, and my law firm will have copies in all offices where we have bankruptcy professionals. Frankly, I wish I had written it!"

Thomas J. Salerno
Partner, Co-Chair
International Insolvency Practice Group
Squire Sanders
Phoenix, AZ

"There are resource books that are handy tools but not particularly interesting to read, and there are resource books that are interesting to read but are not useful tools. Luckily for us, The Ponzi Book is both exceptionally useful and interesting to read. Ponzi schemes trigger a variety of complex regulatory systems, and this guidebook walks the beginner and the more experienced lawyer alike through all of the issues in all of these systems. It's comprehensive without being unmanageable. I can't imagine sorting through the systematic fraud that Ponzi schemes involve without this book by my side."

Nancy B. Rapoport
Gordon Silver Professor of Law
William S. Boyd School of Law, UNLV
Las Vegas, NV

The Ponzi Book was reviewed in the newsletter, Commercial Crime International (November 2012), published by Commercial Crime Services, London, UK. The review, entitled Understanding and Resolving Complex Ponzi Schemes, is available here.


"Phelps and Rhodes have created the definitive treatise on Ponzi scheme law. In the entirety of the Ponzi scheme legal landscape, The Ponzi Book is a virtual desktop law firm. The results of the many hours of legal research that would otherwise have to be commissioned, whether the purpose is basic education in order to pitch business, or to prepare for the prosecution or defense of a Ponzi case, are already at your fingertips. There is not a single issue which arises in Ponzi cases that has not been covered in this book, both exhaustively and clearly.

"This book is also a reminder why we still need hard copy desktop references in our fast-paced internet world. Nothing in the way of e-research can come close to replicating the pleasures of finding the answers to your questions by simply turning the actual pages, flipping to different sections, and purely browsing for educational purposes. If you ever hope to represent a client in a Ponzi scheme case, or you do, you must have this book on your desk. And no law firm should be without a copy in its library."

Michael Richman
Patton Boggs LLP
New York, NY

"The Ponzi Book is an invaluable resource for lawyers and judges enmeshed in the thicket of Ponzi scheme litigation. Clearly written and accessible, the book provides key insights into Ponzi cases and how they differ from ordinary bankruptcy litigation. I am glad I have the book in my library and have already used it in my Ponzi scheme cases."

Kenneth N. Klee
Klee, Tuchin, Bogdanoff & Stern LLP
Professor, UCLA Law School
Los Angeles, CA

"For the past two years, I have spent a considerable amount of time working on the Rothstein, Rosenfeldt & Adler Ponzi scheme case in the Southern District of Florida. Our team has considered a vast array of secondary source materials on Ponzi schemes, and without question The Ponzi Book is the best resource available. We have purchased a copy of the treatise for each of our team members working on the RRA case as well as for our client, and we start each research inquiry by referring to it. I think it would be inefficient to do Ponzi related work without the benefit of the treatise, and The Ponzi Book is tremendously instructive in respect of non-Ponzi bankruptcy litigation issues as well."

Paul Steven Singerman
Berger Singerman
Attorney for Herbert Stettin
Trustee of Rothstein, Rosenfeldt & Adler
Miami, FL

"The first sentence of The Ponzi Book states, 'Unraveling a Ponzi scheme is a messy and complicated affair' and the book goes on for about 800 pages explaining why. This is a phenomenal resource for navigating the legal minefields in unwinding Ponzi schemes with detailed chapters on issues we have litigated over the years.

"It will be an excellent resource for all professionals including receivers, trustees, attorneys and accountants that are involved in these cases. Experienced practitioners will enjoy finding their old cases included in the over 3,500 footnotes.

"As a second generation receiver, it was exciting for me to find my father's cases as well as mine referenced. I anticipate that this book will stay open on my credenza and be referenced often for years."

S. Gregory Hays, CTP, CIRA, CSAR
Hays Financial Consulting, LLC
Receiver of Albert E. Parish, Jr. and
Parish Economics
Atlanta, GA