We are at the most difficult part of this process which is, based on the facts we have learned, what is to be done. Since December, when the objection to the receivership was resolved, funds were disbursed to all claimants, except for two small amounts and for claims by the Boyers and Tsuchidas. The forensic CPA and my staff constructed an accounting system for BlackAcre based on standard accounting practices, tracked accounts through bank records and reviewed closing documents. We interviewed the banks, interviewed Mr. Levenson and spoke with claimants and claimant’s attorneys.
This has been more complicated than initially thought. We examined four principal bank accounts, Mr. Levenson’s personal account and approximately 80 to 90 sub accounts. Tentative conclusions are: (1) funds were commingled in the Capital One Bank accounts, especially in one sub account, and possibly commingled in the MVB Bank account, (2) funds were not commingled in the AXOS Bank account, (3) there was lapping in the Capital One Bank accounts and possibly in the MVB Bank account; (4) disbursements were made to some persons for whom we found no corresponding deposits; and (5) Boyers’ and Tsuchidas’s deposits were confirmed, no sub accounts were created for them and no disbursements were made for the Tsuchidas and partial payments were made for the Boyers, but the source of most of that money was not identified.
The forensic CPA is finalizing his work. It is his firm’s practice that, when conclusions are stated as the firm’s conclusions, the report is reviewed by a second partner. That is being done and his report will be sent to me. I started writing my report this month and will try to keep to my estimate to complete it “sometime during August”. I will file the report with the Court, send a copy to all persons entitled to notice and post it on the blog. The report will include suggested findings of fact and suggested protocols for disbursing the remainder of the funds. A hearing will be set in October for the court’s approval of the protocols, in order to give Judge Ortiz time to review it and allow time for anyone to object.
This has been more complicated than initially thought. We examined four principal bank accounts, Mr. Levenson’s personal account and approximately 80 to 90 sub accounts. Tentative conclusions are: (1) funds were commingled in the Capital One Bank accounts, especially in one sub account, and possibly commingled in the MVB Bank account, (2) funds were not commingled in the AXOS Bank account, (3) there was lapping in the Capital One Bank accounts and possibly in the MVB Bank account; (4) disbursements were made to some persons for whom we found no corresponding deposits; and (5) Boyers’ and Tsuchidas’s deposits were confirmed, no sub accounts were created for them and no disbursements were made for the Tsuchidas and partial payments were made for the Boyers, but the source of most of that money was not identified.
The forensic CPA is finalizing his work. It is his firm’s practice that, when conclusions are stated as the firm’s conclusions, the report is reviewed by a second partner. That is being done and his report will be sent to me. I started writing my report this month and will try to keep to my estimate to complete it “sometime during August”. I will file the report with the Court, send a copy to all persons entitled to notice and post it on the blog. The report will include suggested findings of fact and suggested protocols for disbursing the remainder of the funds. A hearing will be set in October for the court’s approval of the protocols, in order to give Judge Ortiz time to review it and allow time for anyone to object.
