The Receiver overseeing the WCM777 Ponzi scheme has reported a "tepid" response from victim claimants since the portal opened in September. As of November 27, 2015, only approximately 11,900 claims had been filed, despite the Receiver's efforts to encourage participation. The deadline for filing claims is December 24, 2015.
Several issues have complicated the claims process. The absence of a complete or reliable company database makes it difficult for victims to verify their investments. Many investors are located outside the United States, creating logistical hurdles. Furthermore, a significant number of victims provided funds to intermediaries who then pooled the money, obscuring individual investment details. The trading of WCM777 "points," a common feature in such schemes, also muddies the waters for legitimate claims. These challenges prompted the Receiver to seek an extension for the claims deadline.
To date, the Receiver has recovered approximately $20.6 million. Much of the information within the Receiver's Seventh Interim Report has been previously disclosed. However, the report details ongoing settlement negotiations with the family of Phil Ming Xu, the scheme's architect.
The Receiver previously secured asset freezes on three single-family homes. These properties were purchased with funds transferred from ToPacific to Ming Xu's sister, Sue Wang, their mother, Xiaomei Deng, and related individuals and entities. The group, referred to as the "Wang Defendants," has failed to comply with court orders. They have not provided initial disclosures, filed required reports, or responded to discovery requests. Magistrate Judge Wilner recommended on November 9, 2015, that terminating sanctions be imposed against them.
Despite their non-compliance in the litigation, the Wang Defendants have engaged in settlement discussions. These talks have stalled, as the parties have not yet completed the necessary steps for a settlement. This includes returning title to two rental properties to Sue Wang, which are needed to secure the proposed settlement payment through a deed of trust. If a settlement is reached, the Receiver will seek court approval.
The Receiver is also addressing the bankruptcy filing of Aeon Operating Inc. This company operated oil and gas leases where Xu invested $3.1 million of stolen investor funds. Aeon filed for bankruptcy on September 16th. The Receiver and her legal counsel are communicating with Aeon, its counsel, and industry consultants. Their goal is to gather information about the leases and operations to evaluate options for selling the leases and maximizing recovery for victims.