In a sobering reminder that Ponzi scheme victims rarely recover more than 5% of their losses, victims of a $220 million Ponzi scheme carried out by an Indiana couple learned that they can expect to recover less than 2% of their losses. A court-appointed trustee overseeing the bankruptcy of Gary Wilder and his wife, Toni Jo Wilder, estimated that $5.2 million would be available for distribution to victims holding nearly $220 million in approved claims. Both Gary and Toni Jo Wilder pled guilty to fraud and money laundering charges, and are currently serving prison sentences of 15 years and 7 years, respectively.
The Wilders owned Wildwood Industries ("Wildwood"), which was based in Bloomington, Indiana, and once operated a thriving leaf and vacuum-bag manufacturing business. Wildwood solicited investors to 'lend' funds that would be used to buy machinery, and in turn promised a healthy guaranteed annual return. The company represented that it had healthy demand for its machines, obtaining numerous loans from creditors based on purported invoices. In total, approximately 85 lenders loaned the company nearly $215 million.
However, rather than manufacture leaf- and vacuum-bags, the Wilders masterminded an elaborate Ponzi scheme that caused devastating losses. The severity of the scheme was aided by several Wildwood employees who admitted to playing a role in continuing the scheme, including one who altered serial numbers on existing machines to make it appear that new ones were being manufactured and another who approved invoices and documents that led to false financial statements. In total, six people were convicted of various crimes related to their role in the fraud.
Along with the lenders, also included in the victims were the nearly 700 employees who lost their jobs when Wildwood went out of business after news of the fraud broke. Besides failing to make machines as promised, Wildwood also failed to contribute to employee 401(k) plans and various benefit plans including medical, dental and disability. Following news of the fraud, Wildwood was placed into bankruptcy by its creditors, and was later sold for $2 million.
Gary Wilder pled guilty in July 2010 to one count of bank fraud and one count of money laundering, while his wife pled guilty to one count of conspiracy to commit money laundering.
While creditors filed nearly $600 million in claims with the bankruptcy trustee overseeing the Wilders' personal bankruptcy, approximately $217 million in claims were approved. A trustee is also overseeing the bankruptcy estate of Wildwood Industries, where asset recovery efforts remain ongoing nearly four years later.