The payments, though, will represent only 18.6 percent of the net principal each party lost in the Ponzi scheme operated by the once well-respected businessman, said James Askew, lead attorney for the bankruptcy trustee.
The payment plan was approved by Chief Judge Robert H. Jacobvitz in federal bankruptcy court on May 2, and distributions began Wednesday, according to a news release.
The average distribution is about $10,000, with the largest amount of $287,373 going to Wickens Revocable Trust, a family trust.
Also receiving payment are general unsecured creditors, such as businesses that lost money when Vaughan Company Realtors collapsed.
The total amount paid out is $3.35 million.
Vaughan ran a classic Ponzi scheme that defrauded 600 investors out of $75 million, according to civil and criminal investigations. A Ponzi scheme is a kind of investment scam in which money put up by later investors is used to pay fake profits to earlier ones.
Early investors in a Ponzi scheme, especially if they were getting a high rate of return, can make a profit. On the other hand, late investors lose most or all of their money because the payments of fake profits get cut short by the inevitable collapse of such schemes.
Vaughan was charged with 30 criminal counts ranging from wire and mail fraud to money laundering in February 2011. In December of that year in U.S. District Court, Vaughan entered a guilty plea on two counts of fraud. When he was sentenced to 12 years in federal prison in September 2012, Chief Judge Bruce D. Black described him as “the most infamous criminal in New Mexico history.”
Bankruptcy trustee Judith Wagner earlier made $162,000 in payments to those with priority claims in the case, including taxes owed to the state and federal government and Vaughan company employees and agents who were owed money.
One more round of payments will be made later after the sale of other assets, such an 84-acre tract in the East Mountains, Askew said.
The bankruptcy case was filed in February 2010.