Victims Of A $43 Million California Real Estate Ponzi Scheme Being Victimized Again; This Time By The Federal Bankruptcy Process

Excerpts from a recent story in the San Jose Mercury News:

• After losing nearly all of his savings in a Bay Area real estate scam, Mel Nashban's life quickly fell apart. The retired trucking company owner suffered through a divorce, was forced to sell his Carmel home and found himself living on $1,040 a month in Social Security income. Now, Nashban, 79, and many of the dozens of other elderly victims who lost a combined $43 million to scam artist Michael Schneider, feel they are being victimized again - this time by the bankruptcy process.

• Schneider pleaded no contest in July to 173 felony counts for his role in swindling dozens of elderly victims in Santa Clara and Santa Cruz counties. And now his assets - liquidated for about $11.3 million, according to court documents - remain tied up in a lengthy bankruptcy court proceeding that underscores the growing concern about a system designed to divvy up the scraps when an enterprise goes bad.

• At the rate attorneys and trustees are racking up fees, the fraud victims fear they have already lost any chance of recouping even a small portion of their losses.

For more, see Scam victims fight in bankruptcy court to regain some lost money (Bankruptcy assets go to legal fees). (if link expired, try here).

See also, Where the money is going.