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Couple seeks to dodge Ponzi clawback suit

Copyright © 2013 Albuquerque Journal

An Albuquerque couple has filed for bankruptcy court protection in an effort to dodge a clawback lawsuit stemming from their lost investment with convicted Ponzi schemer Doug Vaughan.

Real-estate veterans Mark and Maura Dahrling, who already face a $338,056 court-awarded judgment from a clawback against their now-closed custom homebuilding business, filed a petition for a Chapter 7 liquidation in July, according to court records.

Their bankruptcy petition lists their only substantial debt as $1 million from a “clawback suit.” A Chapter 7 bankruptcy is a recognized way to get rid of a civil judgment under many circumstances.

“Doug Vaughan took everything from us and now (court-appointed trustee) Judith Wagner is trying to take even more,” Mark Dahrling said in a statement emailed to the Journal.

“We are good people and have done nothing wrong,” he said. “We have been forced into bankruptcy in order to stop this sinister clawback litigation against us and hopefully put an end to this unbelievable nightmare.”

WAGNER: Vaughan bankruptcy trustee

WAGNER: Vaughan bankruptcy trustee

The Dahrlings are among about 600 investors who lost about $75 million in what’s been called the biggest Ponzi scheme in New Mexico history. A type of investment swindle, the scheme was operated between about 1993 and early 2010 by Vaughan, a former real-estate executive and now federal prison inmate.

The Dahrlings were sued in late 2011 in a clawback action by the court-appointed trustee in charge of the bankruptcy estate of Vaughan Company Realtors, the long-closed residential real estate brokerage that Vaughan used to issue his notorious promissory notes to investors.

Typically based on provisions of both federal and state law, clawbacks are civil lawsuits that seek to recover or “claw back” certain types of payments made by an individual, company or other bankrupt party before the actual filing of a bankruptcy petition. The goal is to use the recovered money to pay off creditors.

The Dahrlings are among defendants in about 150 clawbacks filed by Vaughan Company Realtors trustee Judith Wagner in Bankruptcy Court in Albuquerque. Most of the defendants are investors who loaned money to Vaughan in exchange for what proved to be worthless promissory notes.

Clawbacks in bankruptcy cases involving widespread fraud can be controversial since they often target crime victims.

The Dahrlings, who invested with Vaughan both as individuals and through their company, Dahrling Enterprises, appear to be “net losers,” according to a court document.

The original 35-page clawback “complaint,” as it is formally called, alleges they received “at least $627,636.54 in transfers from VCR” against a total investment of $1,250,849. All of the promissory notes that Vaughan issued to them carried interest rates of 20 percent, the complaint alleges.

In May 2010, the Dahrlings filed a 130-page, signed “proof of claim,” on file in Bankruptcy Court, that says they were owed $1,516,787, an amount that includes both principal and scheduled interest payments. Their proof of claim confirms the 20 percent interest rates on their notes.

The Dahrling’s relatively high interest rate – the average interest rate for all investors has been variously pegged at 16.3 percent and 17.5 percent – likely was a factor in the clawback against them.

In addition, the clawback complaint alleges that the Dahrlings received $119,743 in payments from Vaughan in the 90 days before Vaughan Company Realtors filed its bankruptcy petition, a period during which an increasing number of rank-and-file investors were going unpaid.

The so-called “preferential transfers” within 90 days of the bankruptcy filing were also a likely factor in the clawback.

In early 2009, Maura Dahrling was hired as a broker at NAI The Vaughan Co., the commercial real estate brokerage where Vaughan had his office, according to a company press release at the time. As a result, the Dahrlings may have gotten preferential treatment from Vaughan because she was an employee.

VAUGHAN: Current federal prison inmate

VAUGHAN: Current federal prison inmate

The Dahrlings also were among defendants in more than 50 clawbacks who exercised the right to switch their cases from Bankruptcy Court to U.S. District Court in spring 2012. The switch was interpreted as a strategy to have their cases tried by juries.

In February of this year, District Court Judge William P. Johnson issued the judgment against Dahrling Enterprises for $338,056, which was the maximum amount sought by Wagner in the clawback lawsuit. The clawbacks against Mark and Maura Dahrling as individuals were still pending.

In May of this year, Maura Dahrling filed a motion for a protective order to avoid giving a court-ordered deposition. The motion says she wanted to stop incurring the costs and legal fees in the case and that the “defendant has decided to file a personal bankruptcy in order to terminate this litigation.”

Their bankruptcy petition gives an address for the Dahrlings in an exclusive part of the Tanoan Community in the Northeast Heights, not far from Vaughan’s former mansion on the Tanoan Country Club golf course.

Although the petition says their house is valued at $735,000 and they own eight vehicles, it paints a picture of a household that appears to be relatively cash poor but not carrying much debt.

The clawbacks against the Dahrlings as individuals are still pending in District Court, thus they hadn’t incurred the cost of the judgments at the time of their bankruptcy filing. The $1 million of debt from the “clawback suit” is largely an estimate.