FILED JUN 27 2023 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: BAP No. NV-23-1030-BGC WELSCORP, INC., Debtor. Bk. No. 19-18056-ABL

STEVEN LORE, Adv. No. 21-01175-ABL Appellant, v. MEMORANDUM∗ LENARD SCHWARTZER, Chapter 7 Trustee, Appellee.

Appeal from the United States Bankruptcy Court for the District of Nevada August B. Landis, Chief Bankruptcy Judge, Presiding

Before: BRAND, GAN, and CORBIT, Bankruptcy Judges.

INTRODUCTION

Appellant Steven Lore appeals an order granting appellee, chapter 7 1

trustee Lenard Schwartzer ("Trustee"), summary judgment against him under

§§ 544, 548, 2 and 550 and Nevada law, NRS § 112.180(1)(a). Trustee sought to

∗ This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value, see 9th Cir. BAP Rule 8024-1. 1 Unless specified otherwise, all chapter and section references are to the

Bankruptcy Code,

, all "Rule" references are to the Federal Rules of Bankruptcy Procedure, and all "NRS" references are to the Nevada Revised Statutes. 2 To the extent the bankruptcy court granted relief under § 548, it erred. Trustee did

not seek relief under § 548 in his complaint, and none of the transfers to Lore occurred 1 avoid and recover the debtors'3 actual fraudulent transfers to Lore in

furtherance of an alleged Ponzi scheme. Because Lore failed to establish that

any genuine issue of material fact existed for trial, particularly whether the

debtors were running a Ponzi scheme, the bankruptcy court did not err in

granting Trustee summary judgment and entering a judgment against Lore

for $227,565.16. Accordingly, we AFFIRM.

FACTS

A. Events leading to the adversary complaint against Lore

The relevant facts are essentially undisputed. From August 2014 until

shortly before creditors filed their involuntary chapter 7 petitions on

December 20, 2019, debtors Welscorp, Inc. and its affiliates and principals

(collectively, "Debtors") operated an investment scheme that offered investors

250% to 600% returns from a pooled investor fund used to bet on sporting

events. Debtors' principals, John F. Thomas, III (aka Jonathan West, John

Rodgers, John Frank, and John Marshall) and Thomas Becker, claimed to

have created a proprietary sports betting algorithm that was highly accurate

in predicting the outcome of sporting events. 4 Thomas and Becker, through

within two years of the petition date. However, such error was harmless since the relevant transfers occurred within four years of the petition date and relief was warranted under Nevada law and § 544(b)(1). 3 Debtors include several entities and their principals: Welscorp, Inc.; Einstein

Sports Advisory Ltd.; QSA LLC; Wellington Sports Club LLC; Vegas Basketball Club LLC; Vegas Football Club LLC; Boston Biometrics LLC; Sports Psychometrics LLC; ESA Ltd.; No-More-Bad-Hires, Inc.; John F. Thomas, III, and Thomas Becker. 4 In 1991, Thomas and Becker were convicted of felony money laundering and

conspiracy arising from another fraudulent scheme. Thomas used the alias "Jonathan West" during the time Debtors ran their sports betting investment scheme. 2 the Debtor entities and the services of their broker-agents, raised at least $29.5

million from 600 investors in more than 40 states with their "low-risk, high-

yield" sports betting investment scheme. The individual investors deposited

amounts ranging from less than $10,000 to over $500,000. Debtors did not do

any vetting of their investors to determine if they were accredited and could

survive a financial loss. Many investors were unsophisticated and placed a

substantial percentage of their net worth (including savings and retirement

accounts) with Debtors.

Debtors had more than 150 brokers and agents. Each broker signed a

"sports investment broker agreement" agreeing to "promote, market, and sell"

the investor agreements in return for a certain percentage of front-end and

back-end commissions. For every agent a broker brought in, the broker

received a certain percentage of the agent's commissions as well.

Debtors promised their investors "absolute security and instant

liquidity," compounding returns that grow "a quadrillion times faster" than

Warren Buffet's investments, or total growth of funds "a quintillion-fold". The

investor agreements set forth how Debtors would grow the investor's initial

investment to a target amount. Once the target was reached, the investor

could cash out and get 50% of the target amount; Debtors would get the other

50%. An investor could also choose to roll over some or all of the earnings

into a new agreement.

Prospective investors were lured into investing through personalized

access to a website that would provide them with "demonstrations" of how

3 their potential investment would grow over time. Once committing money to

Debtors, the investors' login credentials allowed them to monitor bets and

track their individual "winnings" online.

The websites, however, contained incorrect, falsified, or mismanaged

accounting information. For example, on February 11, 2017, investors were

shown that their accounts increased by $5,344,262, but betting slips from that

day showed they earned only $105,782.50. On May 12, 2018, investors were

shown that betting generated $60.5 million in profits, but betting slips from

that day showed only $119,536.40 in actual winnings. Many investors chose

to reinvest their "winnings" because they were impressed with the rate of

growth they saw in their personalized spreadsheets on the website. In reality,

Debtors' sports betting activity generally lost money. Thomas and Becker

never achieved the winning rates represented to investors.

When investors demanded payment, Thomas and Becker would say

they had the funds but often claimed they could not pay for a host of reasons,

such as the winnings were in cash and they could not deposit large amounts

of cash into bank accounts for fear of being prosecuted for money laundering

or other crimes. Most, if not all, investors were not paid out the full balance

shown in their online accounts, and many were not paid back anything at all,

even their initial investments, despite their accounts reflecting much higher

amounts. If an investor was paid, it was frequently with money from other

investors, not winnings from sports betting. There was evidence that some of

these investors were paid because Debtors' brokers suggested that doing so

4 could lead to a larger amount of new money coming in. The investor

agreements did not disclose any use of investor funds other than for betting,

and investors did not know their funds were being used to pay returns to

other investors – i.e., Ponzi payments – or being used by Debtors' principals

for personal expenses and for payment of broker commissions.

Lore was one of Debtors' brokers and received commissions (and other

compensation) for bringing in new investors, including his family and

friends. Lore met Thomas through a Craigslist ad in February 2016. Lore

admitted that he knew about Thomas's criminal past involving similar fraud

schemes. Lore is still in regular contact with Thomas.

In August 2019, the Securities and Exchange Commission ("SEC") filed

a civil action against Debtors and some associated brokers in the District of

Nevada, alleging multiple securities violations. The SEC alleged that Debtors

conducted little sports betting and used only a small portion of investor

funds for betting. Instead, investor funds were misappropriated to fund

Thomas and Becker's personal lifestyles, pay commissions to brokers and

agents, or make Ponzi payments. The SEC alleged that Thomas and Becker

spent more than 85% of investor funds on something other than betting. In

addition, none of Debtors' investment offerings were registered with the SEC,

and none of the named salespersons were registered securities brokers.

The SEC also obtained an injunction to enjoin Debtors from any further

investment activities and to freeze their monies and assets. In support, the

SEC submitted a declaration from Deborah Russell, a long-time staff

5 accountant in the SEC's Division of Enforcement. Based on her extensive

review of Debtors' bank records and her reconstruction of Debtors' books and

records, Russell opined that Debtors were running a Ponzi scheme. Russell

concluded that, at most, $4,480,847.07 (or 15%) of the nearly $30 million

Debtors raised from investors may have been used for betting activities on

their behalf. Russell further concluded that at least $11,616,332.72 of the

$13,222,296.55 paid to investors (88%) was in Ponzi payments. Thomas and

Becker asserted their Fifth Amendment rights during questioning at their

depositions, failing to answer even basic questions about their enterprise.

Ultimately, Debtors defaulted in the SEC action and final judgments of

default were entered against them in April 2021. The default judgments

enjoined Thomas and Becker from selling securities in the future and ordered

them to disgorge over $8 million of illegal profits and pay a civil penalty of $4

million. The Ninth Circuit Court of Appeals affirmed the default judgments

in June 2022.

The state of Oregon also prosecuted Becker and some of the Debtor

entities for state securities violations involving two investors. In 2018, Becker

signed a consent order admitting to the violations. He was fined $35,000.

In October 2020, a grand jury indicted Thomas and Becker for thirteen

counts of wire fraud and conspiracy to commit wire fraud in connection with

the sports betting investment scheme, which was described in the indictment

as a "Ponzi scheme." Those criminal charges are still pending.

////

6 B. Adversary complaint against Lore

Trustee filed an adversary complaint against Lore, seeking to avoid and

recover what he alleged were Debtors' actual fraudulent transfers of investor

funds to Lore under § 544(b)(1) and NRS § 112.180(1)(a). 5 Trustee alleged that

Debtors' sports betting investment scheme was a Ponzi scheme and that Lore,

as a broker for Debtors, was among the highest paid transferees in the fraud.

Between August 3, 2016 6 and December 12, 2017, Lore received $227,565.16 in

commission payments and other compensation in exchange for his services

which Trustee alleged perpetuated Debtors' Ponzi scheme ("Net Transfers").

Lore denied that Debtors ran a Ponzi scheme, and he took issue with

Russell's opinion. Attached to his answer were betting slips for sporting

events from February 11, 2017, which Lore implied proved that Debtors had

not run a Ponzi scheme. Lore maintained that Trustee could not recover the

transfers because they were made in exchange for value and he received them

in good faith.

Trustee then moved for summary judgment. ("MSJ"). The MSJ was

supported by a statement of undisputed facts, which in turn was supported

by numerous documents, including evidence demonstrating that Debtors'

sports betting investment scheme was a Ponzi scheme, and the amount of the

5 Trustee also alleged a constructive fraudulent transfer claim under Nevada law. However, since he established an actual fraudulent transfer claim, we do not discuss the constructive fraud claim any further. 6 Trustee's Exhibit D showing the payments to Lore contained errors. The first two

checks listed for January 23 and February 3, 2016, were actually drafted on January 23 and February 3, 2017. So, the first transfer to Lore was on August 3, 2016. 7 Net Transfers to Lore. Trustee argued that the Net Transfers were made by

Debtors with actual intent to defraud existing and future investors in

furtherance of their Ponzi scheme. Trustee argued that Lore had no

affirmative defense to the transfers under Nevada law; he did not give

reasonably equivalent value in exchange for the transfers because he was

paid that money solely for bringing in new investors in furtherance of the

fraud, and he lacked good faith. Lore admitted that he did not see the betting

take place, did not know who placed bets, did not know how betting tickets

were handled, stored, or accounted for, and only saw one set of betting

tickets provided to him by Thomas, which Lore admitted he did not know the

value of or how to calculate their value. Further, argued Trustee, Lore had no

credible explanation for why hundreds of investors were not paid returns on

time or at all.

Trustee's expert accountant, Marc Ross, reviewed accountant Russell's

declaration and the "tens of thousands of pages" of supporting documentary

evidence from the SEC's litigation against Debtors. Ross also conducted his

own independent investigation. While Ross conceded that he could not

review Russell's privileged work product, he did not doubt the validity of her

conclusions. Ross shared Russell's opinion that Debtors were running a Ponzi

scheme that defrauded their investors out of millions of dollars and allowed

them to fund lavish lifestyles for Thomas and Becker and their families. Ross

opined that approximately $5.9 million (or 20%) of the nearly $30 million

raised from investors may have been placed on actual bets, either for the

8 benefit of the investors or Debtors' principals, and that the vast majority of

funds returned to investors as "winnings" were actually funded by Ponzi

payments; there was no evidence of deposits of winnings into Debtors' bank

accounts that would have accounted for payment of any significant returns to

investors. Ross opined that Debtors could not have done sufficient betting to

pay the returns promised by the contracts and represented on the websites.

Lore opposed the MSJ. He did not file a statement of undisputed facts

or properly respond to Trustee's statement as required by local rule. Lore

disputed Trustee's assertion that Debtors ran a Ponzi scheme. He argued that

the existence of a Ponzi scheme had not been proven in any court and that,

based on over 5,000 betting picks he witnessed in real time, there was "no

way" Debtors "could fake their ability to make a very high percentage of

winning picks." Lore argued that none of Trustee's exhibits proved Debtors

ran a Ponzi scheme, but he disputed only a portion of them and did not offer

any of his own exhibits. Lore also did not address or deny the specific facts

Trustee stated in support of the conclusion that Debtors ran a fraudulent and

illegal Ponzi scheme.

In reply, Trustee argued that Lore had failed to show that any genuine

issue of material fact was in dispute as to the Ponzi scheme, which is the only

fact Lore disputed. Trustee argued that Lore's position that Debtors were

engaged in a legitimate business was highly implausible and not supported

with any evidence. Trustee disputed Lore's claim that Debtors' business was

legitimate because of the high percentage of winning picks made. Debtors,

9 argued Trustee, did not commit fraud with fake picks; they committed fraud

by misrepresenting the profits those picks could generate, the effectiveness of

their betting strategy, and the amount of betting performed and returns

actually won. It was entirely possible for Debtors to have transparent, high-

win-rate picks and still commit sports-betting fraud.

After a hearing, the bankruptcy court entered its oral ruling on the

record granting the MSJ in its entirety. Lore did not order a transcript. The

court's written order incorporated its oral ruling by reference and stated that:

(1) Debtors made the Net Transfers to Lore with actual intent to hinder,

delay, or defraud creditors; (2) the Net Transfers were deemed avoided; and

(3) Trustee shall recover from Lore $227,656.16, plus fees, costs, and

prejudgment interest. This timely appeal followed.

JURISDICTION

The bankruptcy court had jurisdiction under

and

157(b)(2)(H). We have jurisdiction under

.

ISSUE

Did the bankruptcy court err when it granted summary judgment in

favor of Trustee?

STANDARDS OF REVIEW

We review the appeal of a summary judgment ruling de novo.

Stadtmueller v. Sarkisian (In re Medina),

, 240 (9th Cir. BAP 2020),

aff'd, No. 20-60045,

(9th Cir. July 29, 2021). Under de novo

review, we view the evidence in the light most favorable to the nonmoving

10 party to determine whether the moving party was entitled to judgment as a

matter of law because no genuinely disputed issues of material fact needed to

be tried. Wolkowitz v. Beverly (In re Beverly),

(9th Cir. BAP

2007), aff'd in part, dismissed in part,

(9th Cir. 2008). "When the

material facts are not in dispute, our only function is to determine whether

the bankruptcy court correctly applied the law." Patow v. Marshack (In re

Patow),

, 202 (9th Cir. BAP 2021) (citation omitted), aff'd, No. 21-

60051,

(9th Cir. June 23, 2022).

DISCUSSION

A. Incomplete appellate record

Lore had the burden of filing an adequate record to allow review of the

order he appeals. Drysdale v. Educ. Credit Mgmt. Corp (In re Drysdale),

(9th Cir. BAP 2000). Although we ordered him to do so, Lore failed

to order and submit a transcript of the bankruptcy court's oral ruling granting

the MSJ. When findings of fact and conclusions of law are made orally on the

record, a transcript of those findings is mandatory for appellate review.

McCarthy v. Prince (In re McCarthy),

(9th Cir. BAP 1999).

The lack of the transcript hinders our appellate review.

In addition, Lore's opening brief does not contain a statement of facts,

standard of review, summary of the argument, or any citations to legal

authorities. See Rule 8014. Moreover, he attempts to raise issues on appeal

that were not presented to the bankruptcy court. Despite his pro se status,

Lore must follow the same rules of procedure that govern other litigants.

11 Warrick v. Birdsell (In re Warrick),

(9th Cir. BAP 2002).

Based on Lore's noncompliance with the rules and his failure to provide

a sufficient record, we can dismiss the appeal or summarily affirm the

bankruptcy court's ruling. Kyle v. Dye (In re Kyle),

(9th Cir.

BAP 2004), aff’d,

(9th Cir. 2006). However, before summarily

affirming or dismissing, we may exercise our discretion and consider

whether an informed review can be conducted with the incomplete record

provided. Id. Here, we will exercise our discretion to examine what record we

have been provided, keeping in mind that we need only look for any

plausible basis upon which the bankruptcy court could have made the

decision it did. In re McCarthy,

. "If we find any such basis, then

we must affirm."

We find such basis here.

B. Summary judgment standards

Civil Rule 56(a), applicable here by Rule 7056, provides that summary

judgment is appropriate when "there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law." A dispute

over material facts is genuine where a reasonable jury could return a verdict

for the nonmoving party based on the evidence presented. Anderson v. Liberty

Lobby, Inc.,

(1986).

Once the movant has come forward with uncontroverted facts entitling

it to relief, the burden shifts to the nonmovant to establish that there is a

specific and genuine issue of material fact for trial. See Celotex Corp. v. Catrett,

, 322 n.3 (1986). The nonmovant "may not rely on denials in the

12 pleadings but must produce specific evidence, through affidavits or

admissible discovery materials, to show that the dispute exists." Barboza v.

New Form, Inc. (In re Barboza),

(9th Cir. 2008) (citation

omitted). Conjecture, surmise or "metaphysical doubt" by the nonmovant of

the movant's assertions will not defeat a summary judgment motion. See

Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

(1986). The

nonmovant's evidence must be probative. Gertsch v. Johnson & Johnson, Fin.

Corp. (In re Gertsch),

(9th Cir. BAP 1999). Even in cases where

intent is at issue, summary judgment may be appropriate if the nonmovant

rests merely upon conclusory allegations, improbable inferences, and

unsupported speculation.

In deciding whether material factual issues exist, the court must resolve

all ambiguities and draw all reasonable inferences against the moving party.

Matsushita Elec. Indus. Co.,

. However, the court is required

to do so only in circumstances where a fact specifically averred by the

moving party is contradicted by specific evidence submitted in opposition to

the motion. Lujan v. Nat'l Wildlife Fed'n,

(1990). If a motion

for summary judgment is properly supported and the nonmovant does not

set forth specific facts showing a genuine issue for trial, summary judgment

must be entered. Civil Rule 56(a); Rule 7056.

C. The bankruptcy court did not err in granting summary judgment.

To prevail on his fraudulent transfer claim under Nevada law, Trustee

had to show that:

13 (1) Debtors transferred an interest in property to Lore; (2) Debtors transferred the property during the four years prior to the petition date; and (3) Debtors made the transfer with actual intent to hinder, delay, or defraud a present or future creditor.

NRS § 112.180(1)(a); Leonard v. Coolidge (In re Nat'l Audit Def. Network),

(Bankr. D. Nev. 2007); § 544(b)(1) (authorizing trustee to

avoid fraudulent transfers under state law). "[T]he required intent to hinder,

delay or defraud is the debtor's; no collusion with the transferee is necessary."

In re Nat'l Audit Def. Network,

. It was undisputed that the Net

Transfers to Lore were Debtors' property, and that they were made within

four years of the petition date. The only dispute was whether Debtors made

the Net Transfers with actual intent to hinder, delay, or defraud a creditor.

Trustee asserted that Debtors were running a Ponzi scheme with their

sports betting enterprise and that the Net Transfers to Lore were made in

furtherance of that scheme. The Ninth Circuit has defined a Ponzi scheme as:

an arrangement whereby an enterprise makes payments to investors from the proceeds of a later investment rather than from profits of the underlying business venture, as the investors expected. The fraud consists of transferring proceeds received from the new investors to the previous investors, thereby giving other investors the impression that a legitimate profit making business opportunity exists, where in fact no such opportunity exists.

Hayes v. Palm Seedlings Partners-A, L.P. (In re Agric. Rsch. & Tech. Grp., Inc.),

, 531 (9th Cir. 1990).

14 "Transfers made in furtherance of Ponzi schemes have achieved a

special status in fraudulent transfer law." Plotkin v. Pomona Valley Imps., Inc.

(In re Cohen),

(9th Cir. BAP 1996). The mere existence of a

Ponzi scheme is sufficient to establish the debtor's actual intent to hinder,

delay, or defraud creditors under § 548(a)(1) or a state's equivalent fraudulent

transfer statute. Johnson v. Neilson (In re Slatkin),

(9th Cir.

2008); Barclay v. Mackenzie (In re AFI Holding, Inc.),

(9th Cir.

2008); Hayes, 916 F.2d at 534-35; In re Cohen,

. And once the

existence of a Ponzi scheme is established, payments received by the

transferee that exceed his or her initial investment are deemed to be

fraudulent transfers as a matter of law. In re Slatkin,

. That is

because the source of the so-called "profits" received by the transferee is "a

theft by the debtor from other investors."

(cleaned up).

In support of his position that Debtors were running a Ponzi scheme,

Trustee set forth uncontroverted evidence from accounting experts Russell

and Ross that only 15% to 20% of the nearly $30 million Debtors raised from

investors may have been used for betting activities on their behalf, and that

the vast majority of the money paid to investors was by Ponzi payments. Lore

argues that the bankruptcy court erred in determining that Debtors were

running a Ponzi scheme. Given the record, we disagree.

Other than denying that Debtors were running a Ponzi scheme, Lore

did not present an affidavit or any other admissible evidence specifically

challenging any of the facts Trustee set forth supporting a Ponzi scheme.

15 Trustee's evidence demonstrated the existence of a Ponzi scheme, and Lore

failed to produce any specific evidence, through affidavits or admissible

discovery materials, that created a genuine issue of material fact as to that

issue. The one-day's betting tickets he submitted and his unsupported "say

so" failed to create a triable issue of material fact. What betting did occur did

not generate meaningful profits and could not have paid the promised

returns, and no significant deposits were made that would evidence other

successful betting activity. If Debtors were as successful as Lore claimed, then

it did not follow that hundreds of investors were not paid returns on time, or

at all. Despite his diligence, Trustee has been unable to locate any significant

assets for Debtors' victims.

Accordingly, the bankruptcy court did not err in determining that

Debtors were running a Ponzi scheme. We reject Lore's argument that he was

deprived of any opportunity to challenge the Ponzi presumption. Because

Debtors were running a Ponzi scheme, the payments made to Lore in

furtherance of that scheme were actual fraudulent transfers as a matter of

law. In re Slatkin,

. Lore's argument that the transfers would be

considered illegal only if Debtors either pleaded guilty to or were found

guilty of running a Ponzi scheme is without merit. No guilty plea or verdict

in a criminal case is needed to determine that the transfers to Lore were

illegal. The bankruptcy court had full authority to decide as a civil matter

whether or not Debtors were running a Ponzi scheme.

Lore argues that the bankruptcy court erred in finding that he was

16 a "net winner." Lore is unable to cite in the record where the court made this

finding because he failed to submit a transcript of the court's oral ruling. He

also argues that Trustee relied entirely on Russell's testimony for the case

against him, but that is untrue. Trustee retained his own accountant who

shared Russell's opinion that Debtors were running a Ponzi scheme. Further,

Lore never contested the amount Trustee asserted Lore received in

commissions for bringing other investors into the scheme, so he cannot do so

now on appeal.

Next, Lore argues that the bankruptcy court erred in finding that the

law allowing claw backs is constitutional. Lore never raised this issue before

the bankruptcy court. Therefore, we need not consider it. Smith v. Marsh,

(9th Cir. 1999) (we generally will not consider arguments

raised for the first time on appeal). In any case, Lore has failed to cite a single

case calling into question the constitutionality of fraudulent transfer

avoidance, which every state has adopted. We also reject his related claim

that the bankruptcy court erred in finding that the law permits claw backs

further back than 90 days prior to the bankruptcy filing. NRS § 112.230(1)(a)

provides for a four-year reach back from the petition date.

Finally, Lore argues that the bankruptcy court erred in finding that the

settlements were not arbitrary. Here, Lore seems to be asserting that Trustee

pursued individuals for fraudulent transfer claims differently, settling some

cases for less money than what was transferred or dismissing some cases

altogether, which he views as unfair. We fail to see how this, even if true, has

17 any relevance. And it is certainly nothing that Lore raised before the

bankruptcy court in opposing the MSJ. Lore also lacks standing to attack

orders out of other adversary proceedings, especially when he made no

oppositions to those settlements and has alleged no particular injury or

impact on his own proceedings.

There are defenses to an actual fraudulent transfer under Nevada law.

NRS § 112.220(1) provides that such transfers are not avoidable against a

transferee who took in good faith and for a reasonably equivalent value. Once

Trustee met his burden of showing that the Net Transfers were made with the

requisite intent, it was Lore's burden to prove the existence of good faith and

reasonably equivalent value. In re Nat'l Audit Def. Network,

.

Lore does not raise this issue on appeal. We can only assume the

bankruptcy court determined that he failed to show there were any triable

issues of fact regarding reasonably equivalent value or his good faith for the

Net Transfers. Even if Lore could arguably show good faith, he cannot show

reasonably equivalent value. Transfers from a Ponzi scheme given in

exchange for value, where that value is solely participation in or continuation

of a Ponzi scheme, are made without reasonably equivalent value required to

defend against liability. Hoffman v. Markowitz,

, 642 (9th Cir.

2018) (holding that referral fees paid in exchange for referring others to the

Ponzi scheme do not constitute "reasonably equivalent value") (citing Warfield

v. Byron,

(5th Cir. 2006) (holding that no reasonably

equivalent value is exchanged when a broker is paid commissions for

18 bringing new investors into the Ponzi scheme because the funds received by

the broker were funds skimmed from later investors' payments into the

scheme; "It takes cheek to contend that in exchange for the payments [the

broker] received, the . . . Ponzi scheme benefitted from his efforts to extend

the fraud by securing new investments.")).

There were no triable issues of fact that: (1) Debtors operated a Ponzi

scheme; (2) the Net Transfers were made to Lore with actual intent to hinder,

delay, or defraud Debtors' creditors in furtherance of that scheme and were

avoidable under Nevada law; and (3) Lore had no defense to avoidance of the

Net Transfers. Accordingly, the bankruptcy court did not err in granting

Trustee summary judgment.

CONCLUSION

For the reasons stated above, we AFFIRM.

19