The only remaining obstacle between victims in the $66 million Al Parish investment fraud and their meager distribution checks fell away Friday, meaning investors should see some cash in a couple weeks.
Dr. Leonard Forrest, a physician who lost millions of dollars in the scheme, filed an appeal contesting the method for doling out the money and, in doing so, stalled the payout for everyone else. But at a hearing Friday, attorneys announced a settlement after mediation.
Nearly 500 clients suffered a loss in the scheme, and a court-appointed receiver collected and sold assets from the self- described "Economan" to recoup some of those funds. David Dantzler, an Atlanta attorney representing the receiver, said that the result of the mediation left his client "financially, in a better position," than fighting Forrest.
"We really do believe, with the amount of money involved, that it was a wash either way," Dantzler said. "It was going to cost money to appeal it and cost money to settle it."
Terms of the settlement are confidential. Dantzler said the receiver recovered about $9 million to distribute and plans to issue checks by May 1.
In January, U.S. District Court Judge David Norton ruled that victims who withdrew the least amount of money from Parish receive the first payouts under what was called the "rising tide" distribution method.
Forrest invested $3 million and withdrew $715,000 before the scam collapsed. He objected to the court's ruling because he would get nothing and ultimately would lose more than $2 million.
People who qualify for money under the rising-tide model will receive about 18.6 percent of the original principal they invested.
Dantzler announced the settlement at the hearing initially set to consider an argument by the victims who lost the most in the investment collapse. New York physician Kalpana Patel and her family entrusted as much as $30 million to Parish, nearly half the total loss.
Her attorney, Jacques Simon, said he formally had asked the court to distribute the money despite Forrest's appeal because, for two months, nothing happened. On Friday, he said the May 1 deadline for checks was acceptable.
Forrest's attorney, John Massalon, agreed to dismiss his appeal when he returned to his office Friday afternoon. Norton joked that he would send the Blue Angels, the Navy flight squadron in town for this weekend's air shows, after him if he didn't.
Norton in 2008 sentenced Parish to 24 years in the same North Carolina prison that houses Wall Street swindler Bernard Madoff.
Dantzler also announced during the brief hearing that one of Parish's assets fetched far more at auction than expected and that the proceeds will be returned to the estate. Amid Parish's eccentric collection of belongings, the receiver recovered an Indian carving of a temple atop some pool supplies in Parish's garage.
Dantzler said the auction house Christie's estimated its value at $39,000 but that a local fine arts consultant convinced Christie's to hang on to the item until its Indian auction, held recently. The temple drew 10 times the estimated value and will return $350,000 to the receiver, Dantzler said.
He added that only a few items remain in Parish's estate, including a chess set that the receiver cannot legally sell in the United States because it is made of ivory.
"Maybe we can send the chess set to Christie's in London?" Norton joked.
"We will look at that," Dantzler replied.