Frequently Asked Questions

The following are answers to some of the questions most frequently asked by investors regarding the receivership of an alleged Ponzi scheme.

What is a Receiver? A Receiver is a fiduciary who is appointed by the court to take over control of all of a company’s property and to administer it for the benefit of its creditors and investors. Generally, the Receiver gathers and liquidates all of the corporations’ property at the highest available price. The proceeds obtained from those sales, after the costs of administration are subtracted, are then returned pro-rata to defrauded investors. In addition to the funds on hand in the receivership companies at the time that the receiver is appointed, the receiver can also bring suit against and collect from persons who have wrongfully taken money from the company or committed other acts of wrongdoing. See the court orders of May 17, 2006 and June 30, 2006 on the Court Filings portion of this website for provisions concerning the Receiver’s powers and responsibilities.

Who does the Receiver represent and report to? The Receiver was appointed by the court. Receivers operate independently. They represent the receivership estate. They are answerable to the court that appointed them. Even though the Receiver was appointed at the request of the Securities and Exchange Commission (“SEC”), the Receiver does not represent or report to the SEC. Similarly, even though the Receiver is charged with the responsibility of attempting to recover and distribute funds to investors and creditors of the receivership companies and even though he acts for their benefit, the Receiver does not represent investors and creditors or assert their personal claims, either.

What is a Ponzi Scheme? The SEC alleges that Mr. Gish and the receivership companies were violating the federal securities laws by conducting a “Ponzi scheme.” A Ponzi scheme is an illegal pyramid scheme where money from new investors is used to pay off earlier investors until the whole scheme collapses.

What happened to my money? The SEC alleges that your money was improperly used to pay “interest” to and to fund withdrawals by other investors in the company or was taken as compensation by Mr. Geoffrey Gish and others involved in the Ponzi scheme. The SEC further alleges that the reported earnings on the account statements you received were fictitious and that your money was not invested as promised. The Receiver is investigating what happened to investor funds. Most of the funds that investors paid into the receivership companies were not in company bank accounts on May 17, 2006, when the Receiver took control of the companies. Promises and representations made by the receivership companies that your money would remain safe in company-controlled bank accounts in the United States proved not to be true.

Will I get my money back? If so, how much and when? The Receiver does not expect to be able to make distributions in an amount that will provide full recovery to investors. The Receiver cannot make a prediction as to the percentage of your investment that the Receiver will be able to return or when distributions will be made, because the answer to those questions depends on the results of the Receiver’s efforts to recover from third parties who owe the Receivership Estate. The Receiver is trying to recover on four types of claims: (a) claims against third parties to whom Geoffrey Gish turned over funds to invest in prime bank note trading or currency trading, (b) claims for repayment of loans Mr. Gish made to third parties, (c) claims for commissions against those persons who persuaded investors to invest with the Receivership Companies and (d) claims against investors who profited from the Ponzi scheme. The Receiver has made demand on individuals and entities, has settled some of the Receivership Estate claims, has filed suit on others, and is in settlement discussions with still others. Please check the News and Developments for information regarding the status of these efforts. As to timing, there is no likelihood of near term distributions, certainly none this year. Because many of the people who owe the Receivership Estate money have not paid their obligations voluntarily, the Receivers must to rely on litigation to make recoveries on behalf of the Receivership Estate. Lawsuits are sometimes resolved quickly, but sometimes take years to run their course. For that reason and others, it would be only speculation to attempt to say how soon the Receiver will be able to make distributions. Because of the uncertain outcome both as to amount and timing of distributions, the Receiver asks investors not to rely on substantial distributions from the Receivership Estate for any purpose.

What do I need to do? The Receiver requests that all investors continue maintaining all their records regarding investments with the receivership companies. The deadline for submitting proofs of claim, April 27, 2007 has passed. If you submitted a timely proof of claim, the Receiver will review it, compare your statements and documents to receivership company records and attempt to resolve any discrepancies. The Receiver may request additional information from you. If you failed to submit a timely proof of claims, you must apply to the Court for permission to file your claim. Otherwise it will be disallowed. The Receiver may disallow claims that are not submitted timely or correctly. The Receiver may also disallow claims submitted by persons who were involved in illegal activity or against whom the Receiver has claims. If your claim is disallowed you will be so notified by the Receiver and will be given an opportunity to contest the disallowance by applying to the Court for a ruling on the validity of your claim.

Do I have claims that I should assert? Do I need a lawyer? The Receiver cannot give investors legal or business advice. If you have legitimate claims against the receivership companies, they should be submitted through the proof of claim process. If there is a dispute between you and the Receiver as to the validity or amount of your claim, you may need counsel to represent you. Also, the Receiver will be evaluating and asserting, where he concludes it would be cost effective, claims against third parties. You may also have claims against those same parties or against others which the Receiver cannot assert. If you do not assert those claims, they may be lost. You will need to consider and make your own decision whether to hire counsel and whether to assert any personal claims you may have. Although the Receiver cannot advise you on the matter, you and/or your counsel are welcome to discuss these matters with the Receiver or the Receiver’s counsel.

What are the tax implications of the receivership on the K-1 I recently received? The Receiver cannot provide tax advice. At this point, the Receiver cannot state whether K-1s distributed by the receivership companies were accurate.

Are all investors treated equally? What does “pro-rata” distribution mean? All investors with legitimate claims must be treated equally and all distributions will be made “pro-rata.” That means that each investor of an allowed claim will receive the same percentage distribution on his or her claim. For example if the Receiver has $50,000 in proceeds from the liquidation of receivership company assets to distribute to a total of two investors and if Investor “A” has a claim of $100,000 and Investor “B” has a claim of $150,000, then the combined investor claims will total $250,000, and investors will be able to receive 20% of their claims. Investor “A” will receive $20,000 and Investor “B” will receive $30,000.

Will Zamindari, Lexington International and Oxford Adams investors be treated alike? What if I invested in more than one of the receivership companies? At this point, the Receiver is treating each of the receivership companies separately, until he has an opportunity to review intercompany transfers, any commingling of funds and other facts on how the receivership companies were operated. The Receiver may determine that the receivership companies should be consolidated for purposes of liquidation and distributions to investors. Unless and until otherwise instructed, you should be prepared to provide information regarding your investments in Zamindari, Lexingon and Oxford Adams separately.

Why are the companies in receivership for such a long time? The process of collecting investor funds from those who received them is likely in at least some instances to require litigation. That process is, unfortunately, time-consuming and expensive, often lasting years before it is finally resolved.

How does the Receiver get paid? How are the costs of administration of the receivership companies estates paid? Receivers’ compensation and the expenses incurred in pursuing claims and administering the receivership estates must come from the assets of the receivership estates – they are not funded or supported by the SEC or other government funding. The Receiver must pay counsel, accountants and other professionals, and other service providers to assist in the administration of the estates. The SEC does have the right to seek and recover monetary penalties and disgorgement that will be turned over to the Receiver for the benefit of investors. However, the SEC is not in a position to pursue all available avenues of recovery. There are certain parties and certain claims that only the Receiver can pursue. The Receiver will be weighing the cost-effectiveness of recovery efforts and looking for ways in which to minimize receivership expenses. The Receiver requests that investors keep administration costs in mind when seeking information regarding the status of the receiverships and check the information on this website before contacting the Receiver.

Does the Receiver have any information regarding my investment(s) that may be helpful to my tax advisor? Please see the News and Developments portion of this website.

My account statements showed that my account earned significant interest? Where is that money and when will I get it back? The interest credited to investor accounts was supposed to represent a portion of the profits earned through trading in intermediate term European prime bank notes, trading on foreign currency markets, or other investments. Not a single one of these supposed investments was profitable. In most instances, the Receivership Companies did not even get any of its principal back. The Receivership Companies did not earn any appreciable returns on their investments. The supposed interest shown on your account statement was non-existent. The Receivership Companies’ records, instead, support the SEC’s allegations that the Companies were operated as a Ponzi scheme. No payment of the fictional interest will be paid to investors. Distributions to investors will be a return of principal only, and it is unlikely that the Receiver will be able to return entire principal payments to the investors.

Why hasn’t the Receiver brought criminal charges against Geoffrey Gish? The Receiver does not have authority to bring criminal charges against Mr. Gish. The decision of whether or not to bring criminal charges against Mr. Gish is in the sole discretion of the United States Department of Justice. The Receiver and his team are cooperating with the Justice Department by providing information when requested, and have met with and communicated with Justice Department representatives on repeated occasions, but they have no control over when or if the Justice Department brings charges against Mr. Gish.