IDAHO FALLS – The victims of a Ponzi scheme that took in about $68 million from mostly eastern Idaho investors are jockeying for their share of restitution in the case.
A federal judge ordered Rexburg attorney Breck Barton on Wednesday to work on a plan with the U.S. Securities and Exchange Commission that fairly distributes the nearly $2 million recovered so far from Daren Palmer.
Barton represents only some of the investors Palmer was accused of swindling in federal lawsuits brought by the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission.
Last month, Palmer was ordered to pay $41 million in restitution and fines to settle a federal lawsuit filed by the U.S. Commodity Futures Trading Commission. This summer, the SEC won a nearly $90 million judgment against Palmer and his company, Trigon Group, for the eight-year scheme.
But some investors – Barton’s clients – are unhappy with a proposal the SEC submitted in June to distribute the money recovered from Palmer, the Post Register reports.
The SEC proposal would have distributed the money among 21 investors who were duped, including 17 who received none of their original deposits back from Palmer. The plan would, however, include no money for eight other investors who were able to retrieve between 26 percent to 92 percent of their original investments.
Barton argues the only fair way to allocate the money is to pay each investor an equal proportion of their losses.
U.S. District Judge Edward Lodge said this week he wants Barton to work with SEC on a deal that both parties can support. If that effort fails, Lodge said a hearing may be necessary to discuss the merits of each plan.
Both Barton and SEC attorney Karen Martinez hope to avoid a hearing, because receiver Wayne Klein would have to attend and that would mean less money to divvy up among the investors.
As receiver, Klein seizes and liquidates from Palmer’s assets. His time is compensated from the pool of money that he collects from Palmer to repay investors.