Hundreds of people who put money into the now-defunct Bakersfield Investment Club may soon get some of it back, though court filings suggest the payments probably won't amount to even 25 cents on the dollar.
In an email sent to investors last week, a receiver appointed to consolidate and then liquidate assets purchased as part of the alleged Ponzi scheme said he is in the final stages of selling the club's final assets.
When that's finished, whatever recovered sum is available for disbursement is expected to be split up among those who invested in or otherwise have a valid claim against the club, formally known as BIC Real Estate Development Corp.
The email did not state how much money will be distributed or what share of their money individual claimants might expect to receive.
But in an email sent to investors in December, the office of Solana Beach receiver David P. Stapleton said qualified investors "are unlikely to receive distributions in the amount of more than 25% of their allowed claims."
The payments will likely close the book on a messy affair that originated with BIC's founding in 2016 by a former staffer at the Kern County Assessor's Office, Daniel Raymond Nase III, a real estate investor in his 30s at the time who was known around town for wearing a light-blue baseball cap emblazoned with the words "Mr. 21%." The name referred to his assertion he could produce annual investment returns of between 15 percent and 33 percent.
Investigators with the U.S. Securities and Exchange Commission filed a federal lawsuit against Nase in March of 2016. It alleged he had misled investors about his activities, at times claiming club assets as his own.
The suit prompted a U.S. District Court judge in Fresno to freeze the club's assets in 2016.
Nase told the court he had been completely transparent about his activities and almost always acted with club members' best interests in mind. But he ultimately agreed not to contest the SEC's allegations and was ordered to give up $12.6 million in ill-gotten gains, even as there is no indication he will ever be able to repay that amount.
Stapleton's court updates show the club was losing tens of thousands of dollars every month and that Nase had tried to bridge the gap by attracting new investors.
The SEC has stated in court filings that 549 investors from Hawaii to New York together contributed $15.9 million between June of 2013 and March of 2016.
Not all of those people remain invested and stand to receive money back. Court filings suggest that more than 200 remaining investors may take losses totaling perhaps $8 million.
Stapleton, who along with the SEC and Nase has declined to speak publicly about the case, reported to the U.S. District Court in April that he has recovered about $7 million from the sale of dozens of residential properties purchased by Nase with the club's money. About half that sum has gone to Bakersfield lender Valley Mortgage Investments Inc.
The sale of BIC's last remaining assets, WM Petroleum and Target Oil & Gas Drilling Inc., is expected to close soon for a total of $900,000, according to filings by Stapleton. He noted that since June of 2018 the assets have generated about $237,747, which Stapleton stated has helped pay his own expenses as he tries to recover money on behalf of the club's investors and other claimants.