Ponzi meets the Internal Revenue Code
Since 2009, I have served as a bankruptcy trustee for the estate of Kevin Carney, a Ponzi fraudster. Carney stole over $10 million from close to 200 people, most of whom were people of modest means.
The victims of this Ponzi scheme have received a lot of help from the Internal Revenue Service. Not only did the IRS subordinate its claim in the estate, but thanks to a favorable revenue procedure, victims will be able to treat most of their Ponzi scheme losses as losses owing to casualty or theft.