SEC v. Colon End Parenthesis Trust LLC, et al.
And The CEP Bankruptcies

Frequently Asked Questions

[Note: Because these matters are the subject of a legal proceeding, you may want to consult with an attorney to make sure your rights are protected.]

1. I just received a check from CEP? What is CEP?
2. Why am I not getting all my money back?
3. Why 3.3% and how is it distributed?
4. Are these proceeds taxable?
5. Will there be other distributions at a later time?

 

1. I just received a check from CEP? What is CEP?
   If you've found this website, there is a wealth of information about CEP in my posts and in the Document section here, but the short story is that CEP was an internet website offering several high-yield investment programs called CEP.net or CEPCoast or Coastin88. If you received a check you were, according to CEP's records, an investor in CEP who lost money in the CEP programs. The check stub shows your claim or total cash loss.
2. Why am I not getting all my money back?
   These so-called investment or advertising programs were determined to be Ponzi schemes with little or no assets. Some 5,000 people in 70 countries around the world lost over $10 million. The only significant recoveries were from lawsuits filed against the winners and those who received funds just before the bankruptcy of CEP called preferences which have taken 3 years now. The net available to distribute above and beyond the cost of these efforts is not significant compared to the total losses.
3. Why 3.3% and how is it distributed?
   The amount available to distribute after paying priority tax claims is $335,000, divided over $10 million of claims, or a little more than 3.3%. Each claim of equal classification receives the same pro-rata share.
4. Are these proceeds taxable?
   I am not a tax expert and each person may have different circumstances — so there is no way I can answer this question for you. But, in general, the Court has categorized your claims as liabilities of the estate, and so this payment is a partial payment of that liability. I will not be issuing a 1099 or W2 for these payments. You will need to consult your tax advisor regarding the proper treatment of this payment on your tax return.
5. Will there be other distributions at a later time?
   No. This is the only distribution that will be made, so you will have no further recoveries of your loss.