A Florida hedge fund manager whose firm funneled about $830 million to a $1.2 Ponzi scheme run by an attorney has agreed to sell assets to pay the bankruptcy trustee for the attorney’s defunct law firm.
George Levin, his wife Gayla, and his firm Banyon Capital, agreed to the asset sale to pay back investors taken by convicted con artist Scott Rothstein, according to court documents.
Rothstein, who pleaded guilty in January, ran a Ponzi scheme out of his Fort Lauderale, Fla. law offices. He was sentenced to 50 years in prison in June.
Levin and his wife will be allowed to keep their $4.2 Fort Lauderdale million home and $750,000 in personal belongings, the settlement document said.
After an initial $5 million payment, the Levins and Banyon will get to keep 15% of any assets sold, while the bankruptcy trustee collects the rest.
In the settlement agreement, the Levins maintained that they did not know that Rothstein was running a Ponzi operation.
The settlement is the latest example of a bankruptcy trustee going after hedge funds that fed into a fraudulent scheme.
Last week, the trustee overseeing the bankruptcy of Bernard Madoff’s business filed a new complaint against funds-of-funds firm Fairfield Greenwich Group seeking $3.4 billion for the bankruptcy estate.
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