Judge awards victims in Ponzi scheme $6.5 million
A Pennsylvania judge has awarded $6.5 million to five families who lost money in what authorities called a Ponzi scheme.
Northampton County Judge Michael Koury's verdict Tuesday ended a civil court battle stemming from the collapse of the Blue Mountain Consumer Discount Co loan agency, which was raided by the FBI in 2011.
Company manager Walter 'Buddy' Lambert, 75, of Plainfield Township, was sentenced in 2015 to two years in federal prison on mail fraud, wire fraud and obstruction convictions.
Koury's award includes more than $2.4 million in punitive damages against Lambert, who acknowledged wrongdoing at his civil trial, as well as damages for breach of contract, fraud and unjust enrichment and attorneys' fees.
The trial came a day after investors reached a confidential settlement with the company's former owner, who wasn't charged in the fraud case.
Many of the victims were retirees from the Slate Belt area who looked to Lambert's company to boost their fixed income, and some had to go back to work to make ends meet. Authorities said instead of investing their money, Lambert used it for personal expenses and promised returns that never came.
With Lambert diagnosed with cancer, it is uncertain how much victims can collect. Attorney Ralph Bellafatto said Tuesday his clients were satisfied with the verdict, and he hoped to collect some of the reward.
"We'll see," Bellafatto said. "I don't know how far we're going to pursue it, but we're definitely going to take it to some level or resolution."