GOVERNMENT SAYS THERE ARE MORE THAN ONE HUNDRED VICTIMS IN ILLARRAMENDI PONZI SCHEME

The US Attorney's Office for the District of Connecticut has filed a notice* indicating that it is asking the Court to defer the amount of Restitution it will order Francisco Illarramendi to pay his victims, for a period of 90 days after sentencing. Apparently there is statutory authority for this request.

The stated reason is that there are more than one hundred victims of the Ponzi scheme, according to the Government, and the Receiver's distribution to victims is ongoing; it will not be completed by the date of sentencing. It may be that the payments to victims will be insufficient, notwithstanding that there was a substantial amount recovered by the Receiver, but there are generally substantial costs, including attorneys' and receiver's fees, that must be paid. Illarramendi could end up with a multi-million dollar Restitution order; of course, should he receive a long sentence, which is possible, any Restitution ordered will probably never be paid, as he may not live to serve his full sentence. His Guidelines level is life in prison, due to the magnitude of the fraud; his counsel differs on the calculation.

 I was unaware of the size of the class of victims, as the fraud focused upon a small number of entities and companies. There may be some final surprises in this case, long after sentencing takes place. The Government has stated that it will identify all the victims in its sentencing memorandum.The District Court has given the US Attorney additional time to respond, since the defendant's filing was late.
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*Government's Notice regarding Restitution, filed January 16. 2015.