Passivemoney,
I sent you a copy of the email Greg sent me. The info he posted on his website is the legal documentation. In the email he sent me he said he would be posting on Bigger Pockets as well. Give him a few days and see if a posting pops up.
passivemoney or chemar22,
Can you send me a copy of that email as well? Just PM me or send it to [email protected]
Thanks,
Vince
This was reported today:
"Ponzi Charges for Pinnacle Founder": The founder of Pinnacle Development Partners, an Atlanta firm that claimed to invest in distressed real estate, was charged with perpetrating a massive Ponzi scheme that bilked investors out of $69 million. Gene A. O'Neal was accused on 19 counts of alleged mail and wire fraud. Last year, Pinnacle placed ads in major publications promising investors a 25% return in 60 days -- equivalent to a 280% annual return -- by purchasing distressed real estate that could be sold for a quick profit. It collected $69 million from over 2,000 individuals, and paid some of them returns on their money with the cash invested by later investors. Last fall, the court shut down Pinnacle's business at the request of the Securities & Exchange Commission, which has put the company into a receivership.
Geoff
YIPPEE........what comes around, goes around Geno!
I hope your orange jumpsuit is comfy cuz with any luck you'll be wearing it for a LONG time!!!! :D
Just wondering if anyone is still planning a class action lawsuit. Now that O'neal is formally indicted i was thinking it may be a mute point. As the saying goes - can't squeeze blood out of a turnip...but just thought I'd check in. Wow - From a world of cadillacs-landrovers & maserati - to the BIG house is really going to be a culture shock for o'neal. The fraud that he perpetrated was so far reaching and devestated so many lives across the country - I'm glad that justice has finally caught up w/him.
Guesstimates: No class action lawsuit will be brought- nothing to recover from it. Investors will get some money back, probably 15% of principal paid in. They will have been extremely lucky to recover any money at all. O'Neal will plead out and get about 100 months in prison and a huge restitution he will repay at a few hundred dollars a month once he gets out. Alls well that ends well
I think (I hope) your "Guesstimates" are quite low. In the first interim report it stated that $42 million is owed to investors. With $14.5 in liquid assets (includes $60,000 month interest) and another $12 million in property minus all fees, commissions and obligations I think (and hope) the % is closer to 40%.
Just curious, are you an investor with Pinnacle?
Just curious, are you an investor with Pinnacle?
Properties won't sell for anything close to that; because of the markups they will only sell for about 10% of book or less; receivers fees and costs will soak off 10% of the cash. 2000 investors will get an average of about $8,000 each. Obviously I hope for more but not likely. In most of these Ponzi schemes investors get nothing back so here investors are very lucky. One interesting thing is none of the investors objected to being lumpoed together, as some thought they were investing in specific properties with more liquidation value than others
the refunded money will work on a % basis. Taking the amount of money available for refund and dividing it by 2000 doesn't work. Not even close. Anyway, speculating on %'s at this point is just that...speculation.
I hope the best for everyone concerned!
There is more money to come...... :mrgreen:
Hold on to your Superman Boxer briefs. His pockets don't look like rabbit ears yet...(Be patient my son :groovy: )
I think Gene O'Neal's name tastes like dog poop in many many people's mouths about now... LOL
All they can do is wash it down with "Starbucks" :beer:
I am glad that f$%^&*r got indicted but I'm confused that with over 2,000 investors the feds can only come up with 19 counts. I myself have wired 5 separate wire tranfers not to mention all the stuff that I kept that went back & forth between us in the mail.
Im just one investor, how come only 19 counts. Am I the only one who wired them money who can prove it? Did anybody else here send them money thru bank wires??
I also think the 15% figure is kinda low & the 40% figure is high. My guess, and it is only a guess, somewhere in the mid to upper 20's.
Im just one investor, how come only 19 counts. Am I the only one who wired them money who can prove it? Did anybody else here send them money thru bank wires??
I also think the 15% figure is kinda low & the 40% figure is high. My guess, and it is only a guess, somewhere in the mid to upper 20's.
19 counts are enough; he will plead outr anyway. Why didn't any of the other players get indicted?
I got more info from Hays today.
I don't understand what the 19 counts are for and how they figure that amount either. In my attorney's opinion he thinks Gene will get about 20 years. He IS a criminal defense atty. and this is the kind of thing he deals with, but this is just his opinion. Also where did Gene get the $50,000 to post bail??? I think everything he has should be confiscated, and he should be sitting in jail until he gets sentenced.
Its time for k-1's and tax returns for 2006. It is that time of the year. I now have good idea how to handle my pinnacle gains and losses in my tax return. But I have received no k-1's from receiver so far. Will receiver be sending them in time to meet the deadline for tax returns? I have a tax refund coming, so I prefer to submit my returns early. I hate to have my accountant prepare my tax returns and than have to prepare amended ones again and again in view of what receiver may send us later. Please let us know what and when we should expect from the receiver.
Hello fellow investors, what is the consensus on tax at this point. I would like to file taxes, however don't know when or if the payout will be soon, need an extension, file now and pay more to IRS later due to premature filing, etc... any takers on this issue?
:roll:
AHHHH, L E T T H E R O T T I N G B E G I N ! ! ! :D :D :D
His bond is not a cash bond- signature unsecured bond co-signed by mom and partner. He is on home confinement curfew with electronic monitoring in his Atlanta home. 20 year sentence would be unusual for mere simple ponzi scheme. The dollar amount of the loss is the main sentence enhancement here- no money laundering add-ons. See the sentences in the Wayne Puff case for samples- it was exactly the same scheme
PLEASE NOTE THAT THE FOLLOWING MESSAGE WAS POSTED BY GREGORY HAYS, THE RECEIVER, A FEW MINUTES AGO. IT WAS PLACED IN THE WRONG PLACE SO I'VE MOVED IT HERE.
Dear Investors:
Regarding reports of the recent indictment of Gene O’Neal, I have provided the following links to the press release issued by the Department of Justice and other news carriers:
http://www.usdoj.gov/usao/gan/press/2007/03-08-07.pdf
http://atlanta.bizjournals.com/atlanta/stories/2007/03/05/daily33.html
http://www.dailyreportonline.com/Editorial/News/new_singleEdit.asp?individual_SQL=3%2F9%2F2007%4014032_Public_.htm
http://wsbradio.com/news/030807indictment.html
You can also access these stories on my website at: www.hays.consulting.net and then by clicking on the section labeled:
Late Breaking News http://www.haysconsulting.net/latebreakingnews.html
(Note: the headline description on our website currently contains a typo regarding the amount of the Ponzi Scheme, the 4 in the 469 should have been a $, the amount should read $69. We expect to have this corrected shortly.)
I encourage you to check our website on a regular basis for additional updates on the case progress and new reports issued by the press.
I will be posting two additional notices here later today or tomorrow regarding motions filed with the Court in the last two weeks concerning the plan to sell the real properties, the claims process and distributions of proceeds to investors and other creditors.
Sincerely,
S. Gregory Hays, Receiver
Dear Investors:
Recently we have received a substantial number of tax questions regarding when investors might expect to receive K-1’s or 1099’s since some may be anticipating tax refunds (not necessarily due to Pinnacle losses) and are anxious to file their returns.
It has been determined that no K-1’s will be issued to Pinnacle investors. Rather, a form 1099-misc will be issued only to those people who are determined to be net “winners” in the scheme (i.e., the amounts received by an investor in total exceeded the amount of cash invested by him/her).
Since all claims must be reconciled before all net “winners” are identified, we can safely say that 1099’s will not be issued before April 15, 2007. This would not prevent an investor who is a “winner” from reporting his/her excess as income and filing their return if that person knows the amount of excess cash received.
Those investors who did not recover their entire investment should consult with their tax advisers and furnish them copies of the tax letters posted on my website so that they may determine how to treat their losses on their returns. NO K-1’s or 1099’s will be issued to investors in this category so there is no need to delay filing returns for this reason.
Sincerely,
S. Gregory Hays, Receiver
Internal Revenue Service - Circular 230 Disclosure: As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.
Lazaro J. Rodriguez and Frederick Ira Wolfe entered guilty pleas in connection with a fraudulent internet-based investment scheme. When sentenced on May 23, 2007, and May 30, 2007, respectively, they face up to 20 years imprisonment and $250,000 in fines.
Rodriguez was the president and Wolfe the chief executive officer of The Firm “Financial,” also known as THE F-I-R-M, The Firm Investments (collectively referred to as “TFF”), a business located in Miami-Dade County, Florida, which engaged in an Internet investment fraud scheme. Until January 13, 2006, TFF operated a website at www.thefirminvestments.com and was headquartered at 5201 Blue Lagoon Drive, Suite 872, Miami, Florida.
The tax information above posted by the reciever is odd. I had originally thought that the net winers would be cour ordered to return the excess they had recieved over their principal. If this is still the case why would somebody claim it as income and pay taxes on it if it has to be given back?
Dear Investors:
I want to take this opportunity to inform you of several developments within the past two weeks regarding our progress in this case and thank you for your continued support and patience while we continue the investigation and recovery of assets. We have filed several important documents with the Court (listed below) that, when approved, will provide needed efficiency in liquidating the real properties and distributing proceeds to the investors and other creditors.
Recently filed Court documents
(can be accessed by clicking on the links below or through our website at www.haysconsulting.net and clicking on the Pinnacle logo):
I. March 12, 2007
Receiver's Unopposed Motion to Approve Real Property Disposition Procedures
http://www.haysconsulting.net/pinnacle/03-12-07%20Motion.pdf
Brief in Support of Receiver's Unopposed Motion to Approve Real Property Disposition Procedures http://www.haysconsulting.net/pinnacle/03-12-07%20Brief.pdf
These filings provide clarity for the Court and prospective third-party purchasers regarding how the properties will be sold and to establish guidelines and processes aimed at assuring that private sales are both effective and efficient in obtaining a fair sales price and prompt Court approval of a proposed transaction.
II. February 28, 2007
Receiver’s Plan for Claims Administration and Distribution of Proceeds
http://www.haysconsulting.net/pinnacle/02-28-07%20Plan%20for%20Claims.pdf
Brief in Support of Receiver's Motion for the Court to Approve Plan for Claims Administration and Distribution of Proceeds
http://www.haysconsulting.net/pinnacle/02-28-07%20Brief.pdf
These filings seek Court approval regarding our plan for claims administration and distribution of Estate proceeds to investors and other creditors.
In response to many of your questions, both on this forum and to our office, please be advised that we have been diligently working to resolve all claims. The deadline to file a claim was on March 1, 2007. All claims not filed by that date are disallowed from receiving a recovery under the distribution plan.
We are working as fast as we can to resolve claims and hope to make an initial distribution in May. However, please note that the timing will depend on how responses to our objections to certain creditor’s claims are resolved. We are hopeful that the claims administration process that is outlined in the Receiver’s plan facilitates the expedient resolution of all claims. At this time, we have not yet determined the total of allowed claims. Please watch my website for future updates.
Sincerely,
S. Gregory Hays, Receiver
In reply to Justin D, if on a cash basis, a person would normally report income as cash is received. If it is subsequently paid back to the receivership, the person would normally get a deduction at that time.
Internal Revenue Service - Circular 230 Disclosure: As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.
Has anyone consulted with their CPAs or other advisors about how to handle our Pinnacle-related losses as "theft losses" under IRS Section 165?
I've spoken with a company called JKHarris (www.jkharris.com); they claim to be the experts in this... but they also want $1000 cash upfront plus 4% of the amount they enable you to claim on your tax returns. They do the work of preparing the IRS Form 4684 and IRS Form 1045.
Any feedback is welcome. You can also send me private mails.
Thanks...
Geoff