An estimated $9.1 million has been recovered by the Profit Connect Receiver. According to the Receiver’s Second Status Report submitted on February 7th, the announcement was made. The Receiver’s operations report begins by mentioning that Profit Connect was hit by COVID-19 in August of last year. A Profit Connect employee has tested positive for COVID-19, according to Brent Kovar, who alerted the Temporary Receiver of the finding on August 4th, 2021.

In order to ensure everyone’s safety, the Temporary Receiver and Brent Kovar immediately sent everyone home and required they be tested and provided confirmation of a negative test result before to returning to work. At least six employees and a member of the Temporary Receiver’s team tested positive for Ebola and were asked to follow CDC guidelines for quarantination.

A professional cleaning company was hired by the Temporary Receiver to thoroughly clean and sterilize the premises. Profit Connect-purchased property and assets have been the focus of recovery operations thus far. The Receiver staged a virtual auction in December that brought about $1.25 million in funds.

More than $182,000 in Can-Am quads were sold, a 2021 RAM 1500 BigHorn for $46,250, the 2021 Ford F650, and a lot of computer hardware went for more than retail value at the auction. Liquidation of the confiscated bitcoin resulted in an extra $4 million in recoveries.

Against the purchase price, this resulted in a net profit of $2 million. Many real estate assets and interests are still up for grabs. The Receivership’s total equity is $18.5 million, according to the latest balance supplied by the Receiver. The Receivership’s fees total $495,000. Sadly, Profit Connect affiliates are racking up Receivership legal bills in addition to their business costs.

A number of lawsuits filed by investors to recuperate their deposits ahead of other investors have been found by the Receiver. Investors in a receivership case refused to dismiss or delay their lawsuits, thus receiver counsel had to submit a motion under the All-Writs Act to put an end to the investor’s lawsuit. The investor immediately dropped his case after getting a copy of the motion.

Troy Sutton’s upline Jeffrey Nicholas launched a lawsuit against him. After Nicholas filed a lawsuit against Profit Connect, one of his downline members filed a lawsuit against him. Another investor action is ongoing in Texas state court, this time against Mr. Nicholas, who is accused of the same thing. After speaking with the investor’s lawyer, receivership attorneys believe they can come to an agreement that benefits the receivership estate.

Another group of Profit Connect investors is also planning a class-action lawsuit against the Receivership. The preliminary injunction granted bars all of these lawsuits. Receivership costs will either rise or fall depending on whether or not they succeed or fail. Additionally, Profit Connect’s “no recognizable accounting books and records” and third-party non-cooperation are producing issues. A $500,000 lawsuit has already been filed against William Roshak, the winner of Profit Connect, in the area of clawbacks.

A settlement conference has been planned before Magistrate Judge Weksler on March 24, 2022, after the pleadings have been closed and initial disclosures made. The Receiver gives a stern warning ahead of time; The Receiver believes there may be additional litigation to recover fraudulently transferred funds and/or seek damages relating to the Profit Connect scheme, based on his ongoing investigation. The Receiver claims to have issued “thousands of emails and several phone calls” to Profit Connect victims. When Profit Connect approached investors for investment, they encouraged them to take out a lien on their home.

In order to invest in Profit Connect, investors apparently gave the company liens on their homes in exchange for a certain amount of money, which was subsequently invested in Profit Connect. The Receiver will ask the Court for permission to release these liens if no money changed hands, so that title can be fully returned to the homeowners.

There was a webinar hosted by the Receivership on the 29th of September 2021. The meeting was attended by “about 150 interested parties.” The Receiver also claims to have done so via the well-established Receivership website. Nearly 400 forms were submitted via the website, containing both contact information and specifics about their relationship to Profit Connect. Profit Connect’s internal computer systems provide the Receiver with the data it needs to keep its database current. There’s no mention on a claims process yet, so it’s impossible to predict how much money will be distributed in the future.

Victim recovery is looking good at this point, given the SEC’s designation of Profit Connect as a $12 million Ponzi scheme.

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