Lawsuit of the week: Trustee sues B.C. residents over ‘fraudulent transfers’ from Ponzi scheme busted in 2009

The court-appointed bankruptcy trustee for LLS America LLC, which ran a multimillion-dollar Ponzi scheme for more than a decade, is suing a handful of B.C. residents to recover payments made before the fraud collapsed.

Bruce Kriegman, a Seattle attorney, filed 11 notices of civil claim in BC Supreme Court on February 27 to enforce judgments handed down in the U.S. District Court for the Eastern District of Washington.

The actions stem from a 2009 Chapter 11 bankruptcy filing of LLS America LLC, which had humble beginnings as a storefront short-term payday loan business run by a former Mission resident named Doris Nelson.

Nelson moved to Washington state in 2001, and by 2006 was operating exclusively online. LLS America LLC was part of a group that included numbered companies incorporated in B.C. that issued promissory notes to hundreds of investors in Canada and the U.S. with bogus promises of 40% to 60% interest.

Nelson was arrested in 2014 and pleaded guilty to more than 100 charges of wire fraud, mail fraud and money laundering and was fined $37 million by the BC Securities Commission in February 2016. Nelson is in an Alabama federal prison and set to be released in 2022.

Kriegman’s lawsuits seek to recover “fraudulent transfers” from Nelson’s scheme from several defendants, including $1,186,666 from Elm Construction Ltd.; $658,372 from Tyler Foerstner; $545,160 from Cindy Wetmore; $340,278 from Monique Olsen; $142,531 from Blazena Bogdan; $103,752 from Old Orchard Campground; $89,136 from Cole McDonald; $79,810 from Diane Bjarnason; $57,686 from Wentworth Bjarnason; $34,312 from Dartanali Geib; and $23,275 from Yvonne Geib.

The trustee’s lawsuits seek to enforce the foreign judgments, which the defendants have allegedly not paid or appealed, and none of the defendants had filed responses by press time.

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