Ponzi Schemer’s Ex-Wife Can Keep $14M Payout: 2nd Circ.

Law360, New York (September 15, 2011, 4:11 PM EDT) -- The Second Circuit ruled Thursday that the federal government can't freeze the funds of accused Ponzi schemer Stephen Walsh's ex-wife, who got $14 million after their 2007 divorce.

After receiving answers to two questions it had posed to New York’s highest court, the Second Circuit found the district court had improperly frozen the assets of Walsh’s ex-wife, Janet Schaberg.

"The district court rejected Schaberg's argument that a divorce decree could 'cleanse the taint of fraudulent proceeds previously transferred to a spouse prior to' dissolution of the...
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