FTI Consulting was retained by counsel as the forensic accounting experts for the various creditors of PFI to thoroughly investigate the allegations made by the SEC and DOJ that PFI had been run as a Ponzi-like scheme for more than 30 years. After reconstructing the company’s records and conducting a detailed forensic accounting investigation into its financial activity (culminating in a detailed declaration to the Bankruptcy Court of its findings), FTI Consulting was able to uncover evidence that PFI was being operated as a Ponzi scheme from at least January 1, 2007.
After the Court’s ruling, FTI Consulting was asked to manage PFI through the subsequent Chapter 11 bankruptcy, managing and rehabilitating properties and facilitating the sale of assets. This ultimately resulted in more than $460 million in gross sales and nearly 70% recovery of invested funds for the victims.
FTI Consulting played a key role in uncovering the extent of the financial fraud and guided PFI through Chapter 11 bankruptcy, achieving more than $460 million in property sales and enabling more than 1,300 creditors to recover 67 cents for every actual dollar invested in the fraudulent scheme, in addition to the recoveries from downstream litigation.
FTI Consulting’s forensic accounting investigation and ultimate testimony enabled the Bankruptcy Court to find that PFI was run as a Ponzi scheme.
Between a portfolio sale, sales of luxury homes and other individual properties, FTI Consulting’s team oversaw more than $460 million in property sales to provide funds to return to the creditors.
For its efforts on behalf of creditors and investors, FTI Consulting received the prestigious Large Company Turnaround/Transaction of the Year award presented by the Turnaround Management Association.
The FTI Consulting team was responsible for reconstructing the company’s financial records and conducting a detailed forensic accounting investigation. Concurrently, we assumed responsibility for the ongoing management of the company’s operations, including liquidity oversight, real estate asset management and strategic planning. In addition, we facilitated communication with the Independent Director and key creditor constituencies while guiding the companies through the bankruptcy process, with the objective of maximizing recoveries for creditors.
FTI Consulting compiled and organized three decades of mostly hardcopy investor records that we used to clearly demonstrate that cash from new investors was used to pay returns to existing investors and quantify the financial position of each investor on behalf of the company’s Independent Director.
As Chief Restructuring Officer and Real Estate Financial Advisor to the debtors from January 2021, FTI Consulting took over management of the Debtor entities during the pendency of the bankruptcy proceedings.
As FTI Consulting took over management of the properties, it moved to immediately sell certain assets to fund ongoing operations while strategizing the optimal asset strategies to maximize recovery.
After completing the forensic investigation, FTI Consulting worked on the claims analysis, tracking the actual cash in and out of the entity to determine each victim’s claim. The team issued the first distribution to victims in February 2022 and a second distribution in July 2022.
FTI Consulting professionals testified on behalf of a class of investors in a five-year court case accusing a Northwest regional bank of aiding PFI's fraudulent concealment of using investor cash to enrich its executives, pay other investors and cover recurring shortages. The trial ended in March 2025 with a deadlocked jury, motivating the class to seek approval of a $55 million settlement that will further fund recoveries.
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