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One of the two large banks that served as a trustee for the gigantic Ponzi scheme medical holdings agreed to pay $ 114million investors.

The establishment of Bank of New York Mellon is more than double the $ 57 million the Bank offered to well appointed receiver of MedCap Court last June. The Bank denies the accusation.

The trustee, Wells Fargo Bank, talks that offered $ 49 million in abortive settlement last summer, is still fighting lawsuits over MedCap.

The settlement significantly improves MedCap score 20,000 investors.

Receiver Thomas Seaman said in a Feb. 11 report that he had collected $157,5 million in three years on the job. Representing-at best-about 19 cents for every dollar investors have lost.

Sailor has pegged the total loss to between $839 million and $1078billion.

The settlement, if approved by U.S. District Judge David o. Carter and three groups of investors, will boost the total available for investors to close to $ 100 million after legal fees. Fighting lawyers Mellon and wells promised Carter last summer that they would cap their fees at 10 percent to 15 percent.

MedCap thing seized by federal regulators in summer 2009 its President, Joseph j. "Joey" Lampariello, pleaded guilty to federal wire fraud charges last April and is scheduled for sentencing in August.

Basis of Tustin MedCap sold what it claimed were investments in medical accounts receivable invoices, for visits to the doctor or stays in the hospital.

He sold investments through a series of six funds. Mellon and wells each served as trustee for some funds, perform services for investors and pay more than $ 300 million in administrative fees when the creditor MedCap met certain benchmarks.

But most of the accounts receivable that were sold from a fund to another were false. The benchmarks for which earned those administrative costs MedCap were equally illusory.

The lawsuits claimed that the banks failed to make them do their job as fiduciaries for the investor.

Instead of the dull business of buying accounts receivable, MedCap bought money-losing hospitals including two in New York and Atlanta that had lost their operating licences. He checked a medical reactor in Texas. Financed a film on a small team of the Mexican League. Financed real estate offers.

And bought a 115-metre yacht, the home stretch (above left), the founder Sidney Field, which was forced by the auto insurance industry in California in the 1990s.

Three distinct groups settled last week. The first, a traditional class action representing the majority of investors MedCap, won most: $90,675million. Two other groups began as "mass action" where investors paid up-front causes attorneys; a group of 1,700 investors won $18,764 million, while a small group won $4,56million. Each group wants to pay your lawyer.

Contact the writer: 714-796-5030 or rcampbell@ocregister.com

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15 February

With Travis h. Brown, CEO, Pelopidas, LLC and author of how walking money. William McBride, Chief Economist, tax Foundation; J.d. foster, senior fellow, Heritage Foundation; Chris Edwards, Director of tax policy studies, Cato Institute.