This petition presents two important questions concerning the pursuit of Ponzi-scheme proceeds in bankruptcy proceedings—including one that has provoked conflicting decisions by the Fourth and Fifth Circuits.

1. The Bankruptcy Code grants transferees an affirmative defense to a trustee's avoidance power allowing them to retain any transfer received for value, in good faith, and without knowledge of voidability. The Code does not define good faith. Here, the Fifth Circuit affirmed a jury finding of good faith for a transferee that admitted violating a criminal statute in connection with every transfer it received from a $485-million Ponzi scheme. In essence, the court deemed the transferee a "good faith criminal" based on testimony that other members of the same industry commit the same crime. But the Fourth Circuit rejects this approach, holding that evidence of routine criminal violations in an industry cannot establish the observance of reasonable commercial standards necessary to prove good faith.

This Court should grant review to resolve this division over the following question:

Can a party who receives transfers that are the undisputed proceeds of a Ponzi scheme—and who admits committing a crime in connection with every transfer—act in good faith as a matter of law?

2. The transferee faced mounting evidence of fraud in 197 transfers occurring over eight months. Because the transferee had greater reason to question the later transfers than earlier ones—and bore the burden of proof—the trustee asked that the jury decide good faith separately for each transfer. Instead, the district court folded all 197 transactions into a single question on good faith.

The question presented is:

Where a transferee receives multiple transfers over many months, and the evidence of fraud grows during that period, must the jury decide whether the transferee proved good faith as to each transfer?

Can a party who receives transfers that are the undisputed proceeds of a Ponzi scheme—and who admits committing a crime in connection with every transfer—act in good faith as a matter of law?