Miller v. Wulf, 84 F. Supp. 3d 1266

Wulf invested $60,000 in Impact Payment Systems/Impact Cash and later received $94,500 (a $34,500 net gain).
The court-appointed Receiver investigated Impact and found it operated as a Ponzi scheme from at least 2006: losses, commingled funds, inaccurate investor accounts, and distributions funded by new investor money rather than operating profits.
Impact paid over $52.6 million to investors despite collective operating losses and lack of profitable operations; distributions were funded by new investor capital.
The Receiver sued in an ancillary action to recover fraudulent transfers (payments to investors exceeding their principal) under the Utah Uniform Fraudulent Transfer Act (UUFTA); Receiver moved for summary judgment against Wulf.
Wulf, a pro se attorney, failed to properly dispute the Receiver’s numbered facts; the court deemed the Receiver’s material facts admitted and considered prior findings that Impact was a Ponzi scheme.
The court awarded judgment for the Receiver for $34,500 plus prejudgment interest (5% per annum from the date of last transfer) and post-judgment interest; Wulf’s cross-motion for summary judgment was denied.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Impact a Ponzi scheme?	Receiver: undisputed evidence shows returns paid from new investor funds, commingling, losses — ergo Ponzi.	Wulf: Impact ran a real business and was solvent; legitimate operations preclude Ponzi finding.	Court: Impact was a Ponzi scheme; legitimate business activity does not preclude a Ponzi finding.
Does the Ponzi presumption apply to transfers?	Receiver: once an entity is a Ponzi scheme, transfers are presumed fraudulent under UUFTA.	Wulf: contends he was a stockholder redeemed at fair market value, not a defrauded investor.	Court: Ponzi presumption applies; investors are treated as creditors and transfers exceeding principal are presumptively fraudulent.
Did Wulf give reasonably equivalent value (affirmative defense)?	Receiver: no — payments in excess of principal are fictitious profits and not reasonably equivalent value to the debtor.	Wulf: he purchased stock and redeemed it in an arm’s-length transaction for fair market value.	Court: Wulf failed to prove good faith and value; payments exceeding principal are recoverable because the returned stock was effectively worthless.
Prejudgment interest — appropriate rate and start date?	Receiver: award prejudgment interest to compensate loss of use of funds; 5% per annum from last transfer.	Wulf: not argued successfully.	Court: awarded prejudgment interest at 5% from date of last transfer.

Scholes v. Lehmann, 56 F.3d 750 (7th Cir. 1995) (legitimate business activity does not preclude characterization as a Ponzi scheme)
Donell v. Kowell, 533 F.3d 762 (9th Cir. 2008) (Ponzi presumption and treatment of investors as creditors under UFTA)
In re AFI Holding, Inc., 525 F.3d 700 (9th Cir. 2008) (equity investors in a Ponzi scheme treated like other defrauded investors for fraudulent transfer recovery)
Perkins v. Haines, 661 F.3d 623 (11th Cir. 2011) (payments in excess of principal in Ponzi schemes are avoidable; no distinction between equity and debt investors)
Cunningham v. Brown, 265 U.S. 1 (1924) (principle that victims of a Ponzi scheme should be treated equally: "equality is equity")
In re M & L Business Machine Co., 84 F.3d 1330 (10th Cir. 1996) (use of legitimate operations as a front for a Ponzi scheme)