The lawyer Maurice Ampaw has an interesting claim as to why he shouldn’t have to give back the Toyota Land Cruiser he got from Menzgold. He was an investor in the Ponzi scheme and therefore this is just him gaining his own money back. Except that’s not how we clean up Ponzi schemes. No one is, in legal terms, a preferred creditor. So, Ampaw doesn’t get paid back in full while everyone else has to wait and or get paid out small amounts on their investments.
So, this doesn’t work Maurice:
This is despite EOCO securing a court order to freeze all assets, accounts and other related businesses belonging to Menzgold CEO, Nana Appiah Mensah. Speaking to Accra-based Neat FM, Mr. Ampaw admitted having the said car is in his possession but said he acquired it through legal means. He explained that he invested GHc4 million at Menzgold and would only surrender the car to EOCO if the gold dealership firm refunds his money. “Yes I have the car belonging to Menzgold, but the question is, how did I get that car?” “When Menzgold issues was starting, I officially wrote to them that I need my investment or I drag them to court, they replied to me explaining that they have challenges mobilizing money so we came to an agreement that I will own and use their Toyota Land Cruiser Prado as a lien until they pay back my money,” he said.
No, sorry, just not the way it works.
So, where does the money go to in a Ponzi? By very definition the money of later investors is used to pay the “profits” of earlier ones. So, when we come to try to clean matters up we find there is no great pot of gold available to pay investors. The money’s all been paid out – what hasn’t been trousered by the scheme promoters – and we have to go find it in the pockets of the early investors.
So that’s what we do. Everyone who has received anything from the Ponzi is made to pay it back. We may or may not find all of it, depends how much was trousered. But everyone we can find with anything that came from it has to give it back. Then we tot up what we’ve got and who put how much in. Divide one into the other and everyone gets back 1%, or 50%, or whatever, of their initial investments.
Note something important here. Everyone gets the same payout by percentage. No, someone who has an asset that belongs to the pool does not get to keep it and thus gain a higher payout.
A lawyer should know this too – after all, this is how the Madoff Ponzi in the US is being cleaned up.