There was a recent settlement in a case regarding a Ponzi scheme connected to mortgage fraud. Thomson Reuters reported on June 21, 2012 that the size of this scheme was $900 million. This case relied on Arizona laws. Federal laws, as established in a 2008 Supreme Court case, do not allow parties to sue certain third parties, like law firms, that provided advice on financial matters. The Arizona laws, however, give parties broader protection against third parties. This protection gives the party the right to sue the law firm that provided advice in what turned out to be a Ponzi scheme.

The plaintiffs alleged that a law firm played a role in the scheme when advising Mortgages Ltd and Radical Bunny. Both companies, the first a lender, the second an investment firm, filed for bankruptcy after having caused their clients monetary damage. They will pay the combined $87.5 million settlement with insurance money.

The firms deny the Ponzi scheme and illegal securities sales allegations but have decided to settle in Phoenix, Arizona because they want to avoid uncertain expenses related to this matter in the future.

If you are considering filing for bankruptcy, then you should contact a qualified attorney who can help determine if bankruptcy is right for you and answer your questions. Jayson Lutzky is a New York lawyer offering free in office consultations for personal bankruptcy matters. The attorney has over 30 years of experience practicing law. Call 718-514-6619 to set up an appointment or visit for more resources.