It started as a trickle and became a flood. Investor after investor came to federal bankruptcy court to face Walter Ng, who with his two sons and partner Bruce Horwitz, ran several investment funds that are now in default.
"I would just ask him be honest, tell the truth," said investor John McGuire. "I think that's what people want is the truth."
"Just trying to figure out the whole mess really right now," said investor Gary Leeman. His wife, Cathy, described how she felt as "just angry."
Investor Julian Potashnick told the I-Team he lost "a little over $3 million" and it's all gone.
In his voluntary petition for bankruptcy, Ng estimates his assets between $500 million and $1 billion; his liabilities are also estimated between $500 million and $1 billion.
In a declaration, Ng writes he's filed for bankruptcy because "certain investors... have commenced or threatened to commence legal action against me based on losses." Ng says he wants to "ensure an orderly process for the resolution and payment of the claims of investors."
But Tuesday, when the judge tried to ask Ng and his bankruptcy lawyer basic questions about his investment business, Ng's criminal defense attorney cited the ongoing investigation by the FBI, the SEC and the Department of Labor. Ng refused to answer questions for fear of self-incrimination.
"I don't think you take the 5th Amendment unless you got something to hide," said Richard Brown, attorney for the class action lawsuit. "There's something going on there. We've alleged fraud and mismanagement, breach of fiduciary duty, and clearly he's been told by his lawyers to shut up."
Brown has filed a class action lawsuit accusing Ng of embezzlement, violating federal securities laws and lying to investors.
Ng and his lawyers refused to answer questions on the way out, to offer anything at all those investors who are dealing with the loss of their life savings.
The I-Team will continue to purse leads on this story and provide further coverage in the weeks and months to come.
For more background on this complex case, read the I-Team's first report from Aug. 22, 2011 and check out the I-Team Blog.
If you have a tip for the I-Team, send us an e-mail here or call 1-888-40-I-TEAM.
