12/4/98 11:22




$8.8 million to be distributed before Christmas

Miami-----Lewis B. Freeman, the court-appointed Receiver for Unique Gems Int’l Corp. (UGI), announced that he has recovered approximately $19 million, net of expenses, and plans a distribution of $8.8 million by December 15th to thousands of victims who lost millions of dollars in one of South Florida’s largest scams.

"I’m especially pleased that we successfully recovered about $10 million in the last two months from Liechtenstein bank accounts involved in this matter," said Freeman. "Sending money to Liechtenstein is like the roach motel—once the money goes in, it almost never comes out." "However," he added, "in this case, we were successful in getting a lot of it out."

UGI was shut down in March 1997 by Dade Circuit Court Judge Bernard Shapiro in a suit filed by the Florida Attorney’s General’s office alleging that UGI perpetrated one of the biggest pyramid schemes ever to strike South Florida. At the time UGI was shut down, the Attorney General’s Office was able to freeze the company’s bank accounts with balances of approximately $6.3 million. Also, as a result of the injunction entered by Judge Shapiro, the Receiver was able to recover $2 million that was wired to Liechtenstein within hours after the injunction was entered.

Freeman said that the Court today has approved his plan to distribute $8.8 million before Christmas on a pro-rata basis to thousands of investors and creditors who lost money in the pyramid scheme. Freeman said he is holding back the additional funds for unresolved claims and future distributions while trying to bring this case to a final resolution.

The plan calls for a pro-rata distribution to approved claims in proportion to the size of the claim, placing the highest priority on the first $5,000 in claims to benefit the most needy claimants.

"Considering the tremendous pain and suffering inflicted on the unwitting victims of Unique Gems, who believed they were investing in a legitimate business, we thought it important to begin to make restitution of these assets at the earliest date possible," Freeman said. "We hope that this check before the holidays will be helpful."

South Floridians hold 7,000 of 11,458 approved claims against UGI, which lured investors from 40 states and overseas into an elaborate home jewelry assembly scheme. This initial distribution represents a 20-cent recovery of every dollar lost, which is substantially more than is recovered in most pyramid schemes. A final distribution will be made in late 1999.

The recent $10 million recovered is part of $23 million which the Receiver says UGI wire transferred to Liechtenstein before its assets were frozen and before the company was shut down by Florida's Attorney General.

Alleging that this $23 million was fraudulently obtained from UGI’s South Florida investors, Freeman filed suit in Federal Court on August 5, 1998. The suit was for injunctive relief based on claims that certain Liechtenstein banks aided the former principals in preventing UGI’s victims from recovering their money. According to Freeman, the suit proved highly instrumental in facilitating the return of the $10 million from Liechtenstein.