On July 12, 2010, the Receiver that the SEC appointed for the Medical Capital investment fraud filed his twelfth monthly status report. Over the past two months the Receiver has collected little additional money. While the Receiver had collected nearly $100 million through April 2010, since that time he has recovered less than $5 million in additional cash for the Medical Capital estate. Medical Capital investors still are owed nearly $1.1 billion and it appears highly unlikely that they will recover a significant amount of that from the Medical Capital receivership.
To date, the Receiver has recovered slightly more than $102 million. But nearly $11.5 million of that amount already has been spent on operating expenses and approximately $1 million has been used to pay professional fees, leaving just less than $91 million in the Medical Capital receivership estate to be distributed to investors. Moreover, the Receiver and counsel for the Receiver intend to seek permission from the court to take an additional $2 million from the Medical Capital estate to pay their professional fees incurred during the six months ending in April 2010. While the Receiver is expected to recover some additional money for the Medical Capital estate, given the expected $2 million in professional fees that may be deducted from the estate and ongoing operating expenses and future professional fees that will deplete the estate, we expect that investors will recover little from the Medical Capital receivership.
Further, as has been the case with all prior reports filed by the Medical Capital Receiver, it appears clear that Medical Capital was a Ponzi scheme and that millions of dollars of medical receivables that allegedly were the collateral for the Medical Capital notes either did not exist or were given significant false over-valuations.
Dimond Kaplan & Rothstein, P.A. continues to file and prosecute many FINRA arbitration claims against the brokerage firms that sold these fraudulent investments, including Securities America, in an effort to recover money for Medical Capital investors.
