C. Randel Lewis, solely in his capacity as receiver, Petitioner
Steve Taylor. Respondent
Certiorari to the Colorado Court of Appeals Court of Appeals
Case No. 13CA239
Attorneys for Petitioner: Gilbert Law Office, LLC Michael T.
Gilbert Denver, Colorado
Attorneys for Respondent: Podoll & Podoll, P.C. Richard
B. Podoll Robert A. Kitsmiller Greenwood Village, Colorado
Foley & Mansfield, PLLP Dustin J. Priebe Englewood,
Attorneys for Amici Curiae Gerald Rome, Securities
Commissioner for the State of Colorado, and the North
American Securities Administrators Association: Cynthia H.
Coffman, Attorney General Russell B. Klein, Deputy Attorney
General Charles J. Kooyman, Assistant Attorney General
Steve Taylor unwittingly invested millions of dollars in what
proved to be a massive Ponzi scheme. Under the scheme,
investors such as Taylor provided equity to various
ostensibly legitimate investment companies. Those investors
could withdraw the profits (if any) from their investments,
but there was no guaranteed return. Before the scheme's
collapse, Taylor fortuitously withdrew his entire investment,
plus nearly half a million dollars in profit. Other,
less-fortunate investors failed to escape in time and bore
the brunt of the collapse; they eventually lost millions.
After the Ponzi scheme's collapse, a court-appointed
receiver brought what is commonly referred to as an
"actual fraud" claim under the Colorado Uniform
Fraudulent Transfer Act ("CUFTA") section
38-8-105(1)(a), C.R.S. (2018), to claw back Taylor's
profits. As an innocent investor, Taylor argued he should be
allowed to keep the money, contending (in the words of a
statutory affirmative defense) that he provided
"reasonably equivalent value" in exchange for his
profits. A division of the court of appeals concluded that
Taylor was not precluded as a matter of law from keeping some
of the profit, because he may have provided reasonably
equivalent value in the form of the time value of his
investment. The receiver appealed.
In this opinion, we consider whether Taylor may keep profit
exceeding his initial investment based on the time value of
money. We hold that he may not: Under CUFTA, an innocent
investor who profited from his investment in an equity-type
Ponzi scheme, lacking any right to a return on investment,
does not provide reasonably equivalent value based simply on
the time value of his investment. Therefore, we reverse the
division's judgment and remand for further proceedings
consistent with this opinion.
Facts and Procedural History 
Respondent Steve Taylor invested $3 million in several
investment companies run by Sean Mueller (the "Mueller
Funds"). Within thirteen months, Taylor had withdrawn
his entire investment, along with $487, 305.29 in profit. The
Mueller Funds were later exposed as nothing more than a
multi-million dollar Ponzi scheme. Even before Taylor
invested, the Mueller Funds were already insolvent. They
continued to diminish in value throughout Taylor's
investment period. Mueller used Taylor's $3 million
primarily to fund other investors' withdrawals, including
some of Taylor's own withdrawals. And most of
Taylor's withdrawals were funded by new contributions
from other investors.
Though Taylor was fortunate to have withdrawn his full
investment plus a profit before things went south, other
investors weren't nearly so lucky. About ninety-five
investors lost a total of approximately $72 million in the
Mueller Funds after the scheme collapsed. Following that
collapse, the trial court appointed the petitioner, C. Randel
Lewis, as receiver ("the Receiver") for the Mueller
Funds to collect and distribute assets among the losing
The Receiver sued under CUFTA section 38-8-105(1)(a) to
recover Taylor's nearly $500, 000 profit from the scheme.
Taylor asserted an affirmative defense under CUFTA, arguing
he should be able to keep his profits because (1) he was an
innocent investor who didn't know the Mueller Funds were
a Ponzi scheme, and (2) he provided "reasonably
equivalent value" in exchange for his profits. The
Receiver contended that, as a matter of law, Taylor must
disgorge his profits and was entitled to keep only the $3
million representing his initial investment. The parties
cross-filed motions for summary judgment. The trial court
granted summary judgment in the Receiver's favor,
concluding Taylor did not provide reasonably equivalent value
in exchange for his profits as a matter of law.
Taylor appealed and a division of the court of appeals
reversed. Lewis v. Taylor, 2017 COA 13, ¶ 34,
P.3d . Observing that this was an issue of first impression
in Colorado on which other jurisdictions were split,
id. at ¶ 14, the division concluded the trial
court erred by not considering the time value of Taylor's
$3 million investment when determining whether he provided
reasonably equivalent value in exchange for his profits.
Id. at ¶ 27. It reasoned the case should be
remanded for further factual findings to determine whether
Taylor provided reasonably equivalent value-in the form of
the time value of his initial investment-in exchange for each
transfer of money he received from the Mueller Funds.
Id. at ¶¶ 28-32.
The Receiver petitioned this court to review the
division's judgment, and we granted his
Standard of Review
This case requires us to review a trial court's order
granting summary judgment and questions of statutory
interpretation, both of which we review de novo. Front
Range Res., LLC v. Colo. Ground Water Comm'n, 2018
CO 25, ¶ 15, 415 P.3d 807, 810 (summary judgment);
State Farm Mut. Auto Ins. Co. v. Fisher, 2018 CO 39,
¶ 12, 418 P.3d 501, 504 (statutory interpretation).
We begin with a brief overview of common Ponzi schemes. Then,
we discuss the CUFTA framework at issue here, highlighting
the affirmative defense pertaining to transfers made in good
faith and for reasonably equivalent value. Finally, we turn
to the sole issue this case presents: Whether Taylor provided
reasonably equivalent value in exchange for the profits he
received. We focus on how the legislature has defined the
term "value" and consider whether that definition
encompasses the time value of an equity investor's money.
While we conclude the language of the statute does not
include the time value of money on an investment that an
equity investor knew could be lost entirely, we nonetheless
examine the split in caselaw on which the parties aimed their
attention. In surveying that caselaw, we see an important
distinction between cases in which an investor had a
contractual right to a return on investment and those in
which, as here, the investor had none. We see nothing in the
extra-jurisdictional caselaw that militates against the
conclusion we reach based on Colorado's statutory scheme:
An equity investor in a Ponzi scheme, lacking any right to a
return on investment, is not entitled to keep profits based
simply on the time value of money.
Generally speaking, a Ponzi scheme is a "fraudulent
investment scheme in which money contributed by later
investors generates artificially high dividends or returns
for the original investors, whose example attracts even
larger investments." Ponzi Scheme,
Black's Law Dictionary (10th ed. 2014).
But not all Ponzi schemes take the same form. See Finn v.
All. Bank, 860 N.W.2d 638');">860 N.W.2d 638, 652 (Minn. 2015) (noting in
many Ponzi schemes "there is no legitimate source of
earnings," but that "not every Ponzi scheme lacks a
legitimate source of earnings"). For instance, one
common type of Ponzi scheme involves the Ponzi schemer
entering into a contract with an individual investor, under
which the schemer promises to repay the investor's
principal with interest payments. See Spencer A.
Winters, The Law of Ponzi Payouts, 111 Mich. L. Rev.
119, 137 (2012) (describing different types of Ponzi
schemes). This scheme is commonly called a fixed-income Ponzi
scheme. See id. at 123. By contrast, in an
equity-type Ponzi scheme, the Ponzi schemer does ...