Pukke accused of hiding assets

ASSOCIATED PRESS

The founder of a credit-counseling firm that was accused of bilking its former customers continues to defy a court order by hiding his assets from investigators, according to recent court filings.

In filings last week in U.S. District Court, a court-appointed receiver probing Andris Pukke's financial holdings said it will ask a federal judge later this month to determine whether the founder of now defunct AmeriDebt Inc. should be held in contempt of court for reputedly using friends and family to cover up his holdings.

"We have had a long and arduous battle trying to get the straight story with respect to his assets, and we are not through yet," said Gary Caris, an attorney for Robb Evans and Associates, the receiver that is tracking down Mr. Pukke's money to help reimburse AmeriDebt customers.

Lawyers for Mr. Pukke, former chairman and chief executive officer of Germantown-based AmeriDebt, strongly denied the accusations, saying the investigation into Mr. Pukke's assets has uncovered no hidden funds and that the receiver has "personal animus" for Mr. Pukke and his legal team.

In court filings, Mr. Pukke's lawyers also contend the receiver's estimate of $35 million for Mr. Pukke's estate -- the amount he agreed to reimburse AmeriDebt customers while settling a Federal Trade Commission lawsuit in January -- is inflated. The filings contend that the receiver's "questionable handling of the assets" has lowered their value.

"Unless checked by the Court, the receiver and the lawyers will take more than consumers receive," the July 28 filing states. Mr. Pukke's attorney, John Williams, estimated Mr. Pukke's estate between $15 million and $20 million.

The dispute is the latest in an ongoing legal battle between Mr. Pukke and federal regulators, who said he and AmeriDebt made $172 million through hidden fees charged to 300,000 customers who sought credit counseling.

Mr. Pukke admitted no wrongdoing in the settlement but agreed to use his personal assets, including several mansions, to create the restitution fund. A federal judge froze Mr. Pukke's assets in April 2005 and appointed the receiver.

This isn't the first time Mr. Pukke has been accused of hiding his money from the receiver. In September, the receiver said Mr. Pukke did not accurately report holdings -- including a Belize shrimp farm and large insurance policies.

In the most recent receiver report, filed in late June, Mr. Pukke is accused of concealing his stake in a luxury home development in Belize. The project, run by one of Mr. Pukke's friends, was worth about $20 million as of July 2005, according to the receiver.

The report suggests that Mr. Pukke is using the business dealings and Latvian bank accounts held by his father, John Pukke, for his own purposes. Those include an $8 million windfall from the sale of stock in a British gambling company. Mr. Pukke is also accused of using a friend to hide his ownership of a Laguna Beach, Calif., mansion -- one of 10 properties found by the receiver.

Mr. Pukke has disclosed some assets, but he has not cooperated fully, according to the receiver. So far, $16 million has been recovered, with another $2 million expected soon.

It remains vague how much money will be available to pay former AmeriDebt customers. Mr. Pukke is only required to pay $35 million .

In addition, the Internal Revenue Service is entitled to 30 percent of the fund to settle tax claims against Mr. Pukke and AmeriDebt, and attorneys for a class-action lawsuit that was settled along with the January FTC agreement want $2.75 million.

The FTC hopes to have at least $21 million left over for consumers, said FTC attorney Lucy Morris. But, "I don't think there are any guarantees here," she said.