Ponzi trustee loses bid to reclaim fees rerouted to Dubai shell entity

A fund director's company rerouted fees to a Dubai shell entity, and a federal court ruled it could not unwind the transfer under Illinois law. 

On April 24, 2026, U.S. District Judge John J. Tharp Jr. in Chicago denied a Ponzi scheme trustee's attempt to claw back management fees that had been shifted away from victim recovery. The ruling is a stark reminder that corporate structures, even flimsy-looking ones, can stand between defrauded investors and the money owed to them. 

Here is what happened. Steve G. Stevanovich, the former director of Capital Strategies Fund Ltd., embezzled money from the fund. The court issued a turnover order against him in the amount of $1,948,670.79. As of May 2025, he had not paid any of it. The whole time, though, he was collecting $50,000 a month in management fees through a company he solely owned and directed called Compass Point Aviation Ltd. He testified under oath that the money was his personal income, to spend however he wished. 

The court eventually held him in contempt and ordered $33,000 of that monthly fee directed to the trustee, Douglas Kelley, who represents victims of the Petters Ponzi scheme. One week later – just seven days – CPA, Stevanovich's company, assigned its entire rights to those fees to an entity called Altemere FZCO. Altemere was founded and directed by Masoud Emami, who also happened to be a director of the company paying the fees and a relative of Stevanovich. Altemere was not incorporated under the laws of the United Arab Emirates until September 8, 2025 – eleven days after the assignment. It did not even legally exist when the transfer took place. Stevanovich then told the court he no longer had access to the money. 

He died while the case was still pending. 

Kelley moved to unwind the transfer under Illinois fraudulent transfer law, arguing the whole arrangement was designed to keep money out of victims' hands. Judge Tharp acknowledged the circumstances were suspicious. He noted that Altemere was formed after the transfer, shared directors with related entities, and was run by someone connected to Stevanovich by family. But suspicion, in this case, was not enough. 

The problem came down to a technicality that matters more than it might sound. Illinois fraudulent transfer law only covers transfers made by a debtor. Stevanovich was the debtor, but it was his company, CPA, that made the transfer to Altemere. Treating CPA's transfer as Stevanovich's would require the court to disregard CPA as a separate entity – something Illinois law does not allow in this type of proceeding. The Seventh Circuit and Illinois appellate courts have both said as much, and the trustee had no argument to get around it. 

The court also rejected the trustee's claim that an earlier payment order had already established the fees as Stevanovich's property. Judge Tharp drew a line: once the fees hit Stevanovich's hands, yes, that was his money and fair game for the turnover order. But that did not mean he owned the right to receive those fees forever. The income stream belonged to CPA, not to him personally, at least in the eyes of the law. 

So where does that leave things? A fund director facing a nearly $2 million turnover order sat by while his company rerouted the very income the court had targeted for repayment – to a brand-new offshore entity run by a family member – and the legal system could not reach it through Illinois fraudulent transfer law. The trustee, who has been pursuing recovery for years on behalf of Petters scheme victims, walked away empty-handed on this front. 

For anyone in the wealth management space, this is worth sitting with. Corporate layering and offshore vehicles are not new, but the fact that a court can recognize the suspicious nature of a transaction and still find its hands tied says something about the limits of current recovery tools. If you are a compliance professional, a fund manager watching enforcement trends, or an advisor tracking how fraud cases play out after the headlines fade, this one is a case study in how form can triumph over substance – even when the substance looks deeply troubling. 

The case is Kelley v. Capital Strategies Fund Ltd. n/k/a Barrington Capital Group Limited, No. 1:18-cv-08394, in the United States District Court for the Northern District of Illinois.