Hopes of cash stash dashed in Minneapolis money manager Trevor Cook case

Investors who sunk more than $190 million into a foreign currency scam promoted by Minneapolis money manager Trevor Cook over the past several years got some grim news Monday.

After meeting with Cook for about 4 1/2 hours on Friday, R.J. Zayed, the court-appointed receiver liquidating the confessed con man's assets, said he has revealed no hidden pots of gold.

"Very sad news indeed," Zayed said. "I am sick to my stomach."

Contrary to what Cook has bragged to his colleagues, he told Zayed's staff, along with federal regulators, prosecutors and investigators, that he has no submarines, houseboats, or hidden booty.

"He also identified no real estate, personal property, cash, bank accounts, safe-deposit boxes, jewelry collections, art collections, bonds, stocks, precious metals, buried treasures, or assets of any kind that were not already known," according to a notice published Monday afternoon on the receiver's website, www.cook kileyreceiver.com.

The news shocked Cook's investors, mostly retirees who trusted promises by Cook and his colleagues that they'd earn returns of 10.5 to 12 percent with no risk to their principal. They've been hoping that Cook's guilty plea to fraud and tax evasion charges would lead to some hidden cache.

Barbara Pefley, a former employee of Cook's Oxford Global Partners and an investor in the currency program, wrote Zayed on Monday that it looks like Cook's attorney, William Mauzy, had tricked federal prosecutors into dropping numerous potential charges "in exchange for virtually nothing."

She questioned why anyone would believe Cook, noting that he has admitted to misleading investors, and Chief U.S. District Judge Michael Davis ordered him jailed for contempt for using undisclosed credit and gift cards in defiance of his orders.

U.S. District Judge James Rosenbaum warned Cook that his plea agreement with prosecutors was contingent on his full and honest cooperation in their efforts to locate and return investor assets.

Pursuant to Cook's guilty plea on April 13, he arranged to turn over $362,700 in cash, plus his collection of Fabergé eggs and purses resembling Fabergé eggs. But since then, Zayed said, he has provided little new information.

Cook denied giving anyone assets to hold or hide for him, Zayed said. And although Cook did identify three gambling accounts that were not made public before, the receivership already knew about them. Those accounts, in Costa Rica, Cypress and Jamaica, contain more than $100,000. The receivership has been unable to retrieve the money but said Cook's cooperation might help.

Cook's plea agreement says he lost more than $35 million in currency trades since mid-2006. He has a claim pending against Crown Forex SA, a bankrupt Swiss currency-trading firm, for $67 million. But Crown Forex is insolvent, the receiver noted. "Therefore, the timing and the amount of any potential recovery is speculative, uncertain, and unknown."