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The 26th Interim Report of the USFIA Receiver highlights many distribution payment issues.

The Receiver’s most recent report was submitted on December 5th. The Receiver reports that $51.3 million in distribution payments have been made.

Payments were made by cheque, Paypal, or wire transfer. Due to prohibitions on foreign currency transactions in certain jurisdictions, or foreign banks that do not have correspondent banking links with a U.S. bank, a huge number of checks have not been negotiated.

To address these concerns, the Receiver included PayPal as a payment option.

That, too, has been challenging. Typically, the complications emerge because the claimant has not properly setup their Paypal account.

To solve the issues of paying by cheque or PayPal, the Receiver has also paid via wire transfer. There are restrictions to this as well, such as a daily limit and the permission and verification procedure.

Some of the wires were returned owing to the claimant’s faulty instructions.

Others have been rejected by the recipient bank owing to foreign currency transaction limits in specific countries. Due to money laundering restrictions, several nations prohibit inbound wire transfers or require proof proving the legality of the funds’ source.

Additional challenges include checks being returned and checks never reaching their destination. Stop payment orders are fulfilled in certain cases, and checks are reissued.

Although specific examples are not disclosed, the Receiver has learned of third-party cheques being deposited, ACH fraud, and attempts to redirect monies.

The Receiver has also had to deal with many shady attempts to defraud the distribution fund, such as stolen cheques being remotely deposited by non-claimants and fraudulent ACH (Automated Clearing House) withdrawals by non-claimants.

Other fraudulent attempts to divert cash include claims submitted by people on behalf of actual victims, who subsequently seek to transfer the monies to themselves.

Due to these deceptive tactics, the Receiver has had to closely monitor disbursement activities.

Receivership workers are being besieged with requests as the USFIA distribution process continues.

Daily, hundreds of emails are sent asking payment status, amending payee information, reporting a missed payment, and a variety of other concerns, all of which must be evaluated and handled.

USFIA was a $200,000 Ponzi scam. The Receivership has clawed back “almost $80 million” of that total. A total of $64 million is set aside for potential payouts to USFIA victims with proven claims.

The USFIA Receiver does not anticipate any “further monetary recovery” as of December 2022.

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