The receiver liquidating assets from the $190 million Ponzi scheme headed by Minneapolis money manager Trevor Cook filed a motion Wednesday demanding that Cook's in-laws return nearly a quarter million dollars they received from investor funds.
Clifford and Ellen Berg of Apple Valley got paid $948,848 from accounts subject to the receivership, but only $726,650 has been recovered. Receiver R.J. Zayed wants the Bergs to fork over the remaining $222,198.
Zayed said in court papers that the Bergs "knowingly received funds" from Cook's imploding fraud scheme and should be forced to return the money so it can be split among the 1,000-plus investors.
The Bergs could not be reached for comment. Their attorney, John Brink, declined to comment.
Clifford Berg, a flooring salesman, began working on the side for his son-in-law as early as January 2007, recruiting people into Cook's fraudulent currency investment program. The Bergs also invested in the program themselves. But unlike many other investors, Zayed said, the Bergs recovered their principal and more "because of their personal connections to Trevor Cook and their access to 'insider' information."
Cook's investment scheme imploded in July when nine Ohio investors filed a federal lawsuit in Minneapolis complaining that he wouldn't return nearly $5 million they'd invested. Since then, federal regulators shut down his unregistered financial advisory business; he was jailed for contempt for hiding assets and refusing to cooperate with the receiver; and he pleaded guilty to federal fraud and tax charges.
In the two years leading up to the scheme's demise, Clifford Berg and the "select group of investors" he recruited got paid more than $7 million from Cook's enterprise, Zayed said. Nearly a million of that went to the Bergs and $6.2 million was paid out in cashier's checks to investors recruited by Berg. Records show that nearly all of those payments took place in June and July of last year after regulators began investigating Cook and his business associates.
The receivership traced the money through 10 separate accounts and three different financial institutions. Zayed said the money was moved to conceal its source. Berg told a bank teller that "he was trying to help his son-in-law," Zayed said.
