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Karin Hoekstra
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Phillip S. Stenger, Grand Rapids Attorney, Presented at Federal Bar Association Bankruptcy Seminar

September 30, 2004 - Recently, at the 2004 Summer Seminar of the Bankruptcy Section of the Federal Bar Association of the Western District of Michigan entitled “Asset Protection Trusts and Other Devices: Do They Work?” Phillip S. Stenger, of Stenger & Stenger, P.C., presented on the topic, “Strategies to Reclaim Fraudulently Diverted Assets in Foreign Jurisdictions.” In addition to presenting materials related to a creditor’s ability to pierce offshore asset protection trusts (“APTs”), and the enforceability of foreign judgments in offshore jurisdictions, Mr. Stenger shared a case study of his first-hand experience serving in the dual role of U.S. federal receiver and Cayman Islands joint official liquidator (“JOL”) in a case involving one of the largest Ponzi Schemes ever: Securities and Exchange Commission v. Homa et. al. Mr. Stenger was appointed federal receiver at the request of the U.S. Securities and Exchange Commission (“SEC”), and JOL by the Chief Justice of the Caymans’ Grand Court due to the combined efforts of the Cayman Islands Monetary Authority (“CIMA”), the Cayman Islands Attorney General, and the SEC. The latter appointment occurred shortly after the SEC action was filed, when the Cayman Islands’ government acted swiftly to protect defrauded investors by securing the offshore monies involved in the Ponzi scheme (“Cash 4 Titles”). The principals involved in Cash 4 Titles had wrongly assumed that the Cayman Islands would be a safe harbor for their “dirty” money. In fact, the Cayman Islands has a long history of co-operation with international law enforcement, which worked greatly to the U.S. and Cayman Islands’ advantage in unraveling the Cash 4 Titles Ponzi scheme. Mr. Stenger’s reflections on his experiences serving in this dual role highlighted the efficiencies that were created by the willingness of the governments of the U.S. and the Cayman Islands to join forces in putting an end to fraudulent conduct such as that exposed in Cash 4 Titles. A copy of this paper is attached for your reference.