Singer John Mayer Sued in $130M Eastside Ponzi Scheme Bankruptcy

Bankruptcy trustees of former Mercer Island resident Frederick Darren Berg say Mayer was paid for a 2008 performance from money stolen from investors. They are attempting to recover more than $130 million that Berg never repaid.

The state's largest-ever Ponzi scheme run by a Mercer Island man has now pulled musician John Mayer into a web of ill-gotten gains that a sprawling bankruptcy lawsuit is trying to recover.

According to TMZ.com in a story published on Sunday, new legal documents filed by creditors of former say Mayer was paid from Ponzi scheme money to perform at a corporate event hosted by Berg and his investment fund Meridian Group in 2008.

The fund was declared bankrupt in 2010 and Berg was later arrested in October 2010 and relating to a Ponzi Scheme he ran that involved investments of up to $245 million (some estimates of Meridian's assets place that number at approximately $280 million).

TMZ.com reports that booking agency Grabow & Associates — and Mayer by extension — were paid by Berg and Meridian as much as $465,000 from the Ponzi scheme.

Mayer's lawyer told TMZ, "John Mayer performed at a corporate event in 2008 and was paid for his services.  The opportunity was brought to John through his talent agency, CAA.”

Bankruptcy trustees filed suit against to recover some of the cost, and US District Court Judge Richard A. Jones ruled in April that Berg is responsible for repaying $140,356,155 in restitution as part of his sentence.  

According to federal prosecutors, the restitution cannot be waived by bankruptcy. Following his prison term, no less than 10 percent of his monthly income will be required to go for restitution.

Berg's in early 2011 for just over $6 million. He is .

Bob McCoy September 12, 2012 at 03:47 PM
It's certainly unhappy circumstances for the people that lost their savings in Berg's, or anyone else's, scheme. Regardless of the victim’s age, the losses are a significant setback in terms of time and energy, with seniors having the least opportunity to recover. The suit against John Mayer is hard to comprehend. Unless Mayer was part of the scheme, by what measure was his payment for services fraudulently obtained? Probably Berg purchased the MI home with gains from his scheme. Will investors sue the real estate agent for the commission on the sale? Will the contractor that did the remodel (http://mercerisland.patch.com/articles/darren-berg-home-sold-for-nearly-6-million) pay back the investors, and so on? Reconstructing all purchases made by Berg and his company might be difficult, indeed, to regain all moneys lost. I hope Patch will follow-up with an article explaining the basis to drag Mayer into the fray. Certainly the argument cannot be that suppliers must perform due diligence on the source of funds paid to them, especially considering that the investors' own diligence was apparently insufficient. Successful Ponzis seem to tout high returns. Returns usually reflect risk to the investor, risk rising as the return on investment rises. I don't believe the latter will ever change, and probably, pyramid schemes would not succeed if offering market rate returns. One should always investigate the underlying wealth-generator of any investment.
Hilary Kimbel May 15, 2013 at 04:35 PM
Thanks so much for posting this great information! I have also been looking for bankruptcy trustees in Woodstock... I found this website to be pretty helpful: http://www.mclay.ca/company/offices/index.php.


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