Ponzi Schemes and Hollywood Poker
The story sounds familiar: a trustee recovering assets for victims of a Ponzi scheme seeks to clawback improper transfers to others. But this is not the Madoff trustee suing Madoff’s former clients, but the trustee for a failed, Beverly Hills hedge fund run by Bradley Ruderman. And one of the improper transfers is $311,300 that Ruderman lost to Toby “Spiderman” Maguire in a high-stakes, celebrity poker game.
The complaint against billionaire Alec Gores, another player, alleges that the poker games were illegal and therefore did not create legally enforceable obligations. Maguire has denied wrongdoing and argued that money lost to Ruderman should be set off against any alleged winnings. Would the money be recoverable if the games were illegal? Is an illegal Ponzi scheme itself an illegal gambling operation?