Robin Weiss and Vanessa Huber secure summary judgment ruling in receivership case involving fraudulently transferred assets

Robin Weiss and Vanessa Huber secured a summary judgment ruling for Kevin Dooley Kent, in his role as court-appointed receiver for various entities that were used in connection with a $100 million fraudulent investment scheme.

Kent’s case arose from a criminal investigation and prosecution of a Pennsylvania investment advisor who was initially arrested in August 2019 and indicted for securities fraud in June 2020.

According to the SEC, the advisor raised “approximately $105 million from approximately 40 investors based on false representations that she would invest their money in publicly traded securities through various trading strategies that she championed as providing consistently high returns.” The SEC complaint alleged that the adviser “made very few investments in these trading strategies, and instead largely used investors’ money to repay other investors and for her own personal investments.”

The U.S. District Court for the District of New Jersey appointed Kent as receiver in June 2020 over the assets of the adviser and the entities she controlled. To recover assets that the adviser fraudulently transferred to third parties, Kent initiated various ancillary actions against the third-party recipients. One third-party recipient benefited from a total of over $2.3 million through transfers that the adviser’s entities made to him for his benefit, and through the use of the adviser’s corporate credit card that she allowed him to use gratuitously.

In granting summary judgment for Kent as receiver, the court agreed with Weiss and Huber that the individual did not provide any value to the receivership entities in exchange for the assets transferred to him for his benefit, and that the individual also could not prove that he received the assets in good faith because the undisputed facts suggested that he knew or should have known about the adviser’s fraudulent investment scheme. Accordingly, the court entered summary judgment against the individual for over $2.3 million.

“We’re thrilled to successfully represent a colleague in his role as court-appointed receiver to recover funds for those harmed by the fraudulent investment scheme,” Weiss said. “This ruling will go a long way in helping Kevin secure more favorable outcomes for the receivership estate and the defrauded investors.”