Prime Bank Restitution
According to the SEC:
"During the initial stages of the fraud, investors received monthly payments that the Defendants represented were "profits" on their investment. However, monthly payments to Resource F investors ceased around May 2000. To date, although requested, no investors are known to have received the return of their investment, as promised by the Defendants. Furthermore, since the cessation of monthly payments, VonStrasdas has regularly sent lulling letters to investors making excuses for the cessation of payments, and making the falsestatements that he expected trading and monthly payments to investors to resume soon. More recently, VonStrasdas and Dyer have each solicited investors to contribute money to purported legal efforts to obtain the return of investors' funds."
In a very interesting twist, Eric E. Resteiner donated $2.3 million to the defendants, who he was defrauding. Why is this interesting?
It really isn't that unusual for the prinicipal behind the fraud or scam to give back, a gift, discount or some other form of rebate, or money to the "investors". This dulls the normal due diligence.
What is unusual in this case, is that after the fraud was discovered the First Church of Christ:
"approached Commission staff with concerns that Resteiner had donated $2.3 million to a church building fund using money he received from defrauded investors. Resteiner's donation to the church was made prior to the Commission's allegations of fraud being raised in 2001. The staff of the Commission, with the assistance of the United States Attorney's Office for the District of Massachusetts, confirmed that Resteiner's contributions to the church were made using proceeds of his fraud. Although the church had already spent the building fund donation and otherwise had no legal obligation to repay the money, it nevertheless decided to make a donation from its general funds to the victims' fund in this matter in an amount equal to Resteiner's fraudulent contributions."
In the end, the victims will receive 10 cents on the dollar.
