At long last, the government has closed the books on a $194 million fraud scheme run out of the Van Dusen mansion in Minneapolis that bilked more than 700 mostly elderly investors out of their savings, leaving many destitute.

After 10 years of work, U.S. District Judge Michael Davis ruled Thursday that the receiver he appointed on Nov. 23, 2009, had done everything possible to recover assets from the fraud scheme, and that it was in the investors' best interest to make a final payment.

The bottom line: The receiver recovered just under $21.7 million and, after expenses, returned $11.7 million to investors, a recovery rate of about 8%. Lawyers with the U.S. Securities and Exchange Commission and the U. S. Commodity Futures Trading Commission said under the circumstances, it was a great result.

"What an outstanding job that you have done for the court and the 700 individuals who've lost close to $200 million," Davis told Tara Norgard, a lawyer with the Carlson Caspers law firm in Minneapolis, who worked on the receivership since its inception.

"These were not individuals who had money to burn and could sustain the losses," Davis said. "I wanted to collect as much money as we could for these individuals who were victims of this Ponzi scheme. Unfortunately, it's not a lot of money."

The Ponzi scheme was revealed in summer 2009, when the Great Recession led some Ohio investors to try to withdraw their money from a foreign exchange investment program run out of Minneapolis by Trevor Cook, a former precious metals salesman. Though Cook had promised returns of 10 to 12% and guaranteed that the investments were fully liquid and safe, he couldn't come up with the cash to pay off the Ohio investors.

Trevor Cook.

They sued, causing a run on Cook's investment scheme. It imploded, exposing the second-largest Ponzi scheme in Minnesota history after the $3.65 billion scheme run by convicted fraudster Tom Petters.

The receiver in the Cook case seized bank accounts, real estate, personal property, cash, coins, vehicles and other assets for the benefit of the victims, whose average age was 62. The receiver tracked down money and property around the U.S. and in Panama, Switzerland, the Cayman Islands, Canada and Jordan, and when necessary, sued to obtain settlements on the investors' behalf. Every professional who worked for the receivership discounted their fees, and some worked at no charge, Norgard said.

"We clawed back every cent allowed by law," she said.

Davis praised Norgard and her associate, Brian Hayes, for trying novel legal tactics to get back the investors' money.

"There's no doubt in my mind that the work the receiver has done is the best work that has ever been done in this district," he said.

Davis presided over several criminal cases related to the scheme.

Norgard said Cook and his co-conspirators had portrayed their foreign currency investment program as a completely safe way to get high returns in a volatile market. But in fact, there was no real investment program, she said. Instead, they "looted" their clients' money for a variety of high-risk commodities trades and spent much of the cash on themselves. Norgard said the profits Cook and his associates showed on investor statements were "simply made up with third-grade math."

Nothing about them was real, Norgard said. The collectible Faberge eggs seized from Cook were fakes, she said, as were the Rolex watches.

"Even the cars that they drove were fakes — they were kit cars," Norgard said.

Cook pleaded guilty and is serving a 25-year prison term. His partner, Patrick Kiley, had pitched the scheme on Christian radio networks and through paid programming on radio stations around the country. Kiley was tried and convicted and is serving a 20-year sentence. Financial adviser Jason Bo-Alan Beckman, who had claimed to be one of the nation's top money managers, solicited investors for the scheme. He is serving a 30-year sentence. Gerald Durand, a former gold and silver coin dealer who had solicited investors for the scheme, is serving a 20-year sentence. And Christopher Pettengill, a securities broker who helped market the scheme, pleaded guilty and has been released after serving a 7½-year sentence.

Dan Browning • 612-673-4493