Commercial Fraud Committee


Post date: Friday, April 22, 2016

[1]In a decision that deserves the close attention of secured lenders, the U.S. Court of Appeals for the Seventh Circuit held that a bank’s awareness of suspicious facts about the collateral pledged to secure its loan required bank officials to perform a diligent investigation of possible fraud or other wrongdoing by its borrower.

Post date: Thursday, April 21, 2016
Photo of Daniel Seligman, CFE
Daniel Seligman, CFE

The legal saga of the Wyly brothers continues.

Born in rural Louisiana during the Great Depression, Samuel Wyly and his older brother Charles, Jr., built a fortune from a computer company and later from steakhouses and Michael’s, an arts-and-crafts retail chain. In 2010, however, the U.S. Securities and Exchange Commission (SEC) brought a civil enforcement action against the Wylys, alleging that they participated in an elaborate international securities fraud scheme.

Post date: Thursday, April 21, 2016

In a Jan. 8, 2016, opinion, the U.S. Court of Appeals for the Seventh Circuit reminded secured lenders of their due diligence obligations when choosing to extend credit. In Grede v. Bank of New York Mellon Corp. and Bank of New York (Grede), a panel of the Seventh Circuit held that Bank of New York and its successor, Bank of New York Mellon Corporation, (collectively, the bank) were on inquiry notice of their obligation to investigate the provenance of the collateral used by Sentinel Management Group, Inc. to secure several hundred million dollars in loans made to Sentinel.

Post date: Thursday, April 21, 2016

In Sikirica v. Wettach,[1] the Third Circuit held that a party seeking to avoid a fraudulent transfer under Pennsylvania’s Uniform Fraudulent Transfer Act (PUFTA)[2] bears the burden of persuasion on all elements, including the insolvency of the debtor and the lack of reasonably equivalent value in exchange.

Post date: Thursday, April 21, 2016

A Ponzi scheme is a fraudulent arrangement where an entity makes payments to investors from monies obtained from later investors, not from profits of any underlying business venture. The scheme is a variation of robbing Peter to pay Paul. Charles Ponzi is regarded as the mastermind of the first such scheme.

Post date: Monday, December 28, 2015

Fraudulent transfer plaintiffs be reminded: the heightened pleading standard in Rule 9(b) continues to create difficulty surviving a motion to dismiss actual fraudulent transfer claims. In In re Lyondell Chem. Co,[1] in the context of fraudulent transfer litigation following a leveraged buyout, the United States Bankruptcy Court for the Southern District of New York reaffirmed that the Rule 9(b)

Post date: Monday, December 28, 2015

Chasing fraudsters is never easy. They always appear to be one step ahead and creditors, in addition to having to prove the fraudulent transaction, have to also find the money or assets and be able to recover them.

Post date: Monday, December 28, 2015

In a recent decision, the United States Court of Appeals for the Seventh Circuit provided further clarification regarding the defenses available to “mediate or immediate transferees” who receive an otherwise avoidable transfer.[1]

Post date: Monday, December 21, 2015
Photo of Kathy Bazoian Phelps
Kathy Bazoian Phelps

The Commercial Fraud Committee has had a very busy and prolific year, producing one book, two webinars, three newsletters, multiple case law eblasts, and the launching of a committee wide conference call program.

Post date: Wednesday, November 04, 2015
Photo of Bryan Scott Perkinson
Bryan Scott Perkinson

“Let there be an end, a privacy, an obscure nook for me. I want to be forgotten even by God.”[1] This Browning verse would serve as an apt credo for many fraudsters looking to exit the game. The problem is that today, the exit always seems to include an “obscure nook” — and a few million dollars of other people’s money.


Mr. Michael D. Napoli
Akerman LLP
Dallas, TX
(214) 720-4300

Mr. Nathaniel J. Palmer
Reid Collins & Tsai LLP
Austin, TX
(512) 647-6107

Mr. Christian A. Pereyda
Education Director
Maynard Nexsen, PC
Birmingham, AL
(205) 254-1854

Ms. Alyson M. Fiedler, Esq.
Newsletter Editor
Ice Miller LLC
New York, NY
(212) 835-6315

Mr. Aaron M. Kaufman
Special Projects Leader
Gray Reed & McGraw LLP
Dallas, TX
(469) 320-6050

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