Ponzi Schemes and Poker-Is Recovering Gambling Losses a Winning Hand?
Corey R. Weber and Steven T. Gubner
Corey R. Weber, a partner at Ezra Brutzkus Gubner LLP, is a litigator in bankruptcy, business and commercial litigation. He is the Co-Vice Chair of the Insolvency Law Committee (a standing committee of the Business Law Section of the State Bar of California) for 2014-2015. Corey represents parties in adversary proceedings in bankruptcy cases, and frequently litigates complex fraudulent transfer cases involving Ponzi schemes, fraud and breaches of fiduciary duty.
Steve Gubner, Managing Partner of Ezra Brutzkus Gubner LLP, represents financial institutions, Fortune 500 companies (and their financing divisions), closely held businesses and high net worth individuals in complex bankruptcy and insolvency matters. His strengths include management of the sensitive issues surrounding involuntary bankruptcy filings and application of general business advice to assist clients in navigating potential pitfalls and to solve problems before they occur.
Aprominent manager of a Beverly Hills hedge fund had allegedly lost millions of dollars to celebrities, prominent Hollywood powerbrokers and wealthy businessmen in high-stakes poker games and a bankruptcy trustee had filed suits to recover the gambling losses. We were taking a deposition in Chicago when the story broke. Calls and e-mails started pouring in from Good Morning America, USA Today, and virtually every other major news outlet. Our firm represented the bankruptcy trustee, Howard Ehrenberg,1 who had filed the lawsuits demanding that the poker players return the money that they had allegedly won in those high-stakes games from Bradley Ruderman; Ruderman was the principal of Ruderman Capital Partners, LLC, a small Beverly Hills hedge fund. In 2009, creditors filed an involuntary bankruptcy petition as to Ruderman Capital Partners. Ruderman turned himself in to the United States Attorney’s Office around the same time and pled guilty to, among other things, operating Ruderman Capital Partners as a Ponzi scheme.