Restitution after a Ponzi scheme collapses

We're continuing to play around with some questions in the law of restitution, which is the subject of a new book I've written. Here's another. A Ponzi schemer takes $10,000 of my money and $10,000 of yours. Then he is caught. We gave him our money in cash, and he kept it separate. My money has all been spent. Your money is still sitting in a briefcase (or envelope) on his desk. Do you get all of your money back, or do we share it?

The older rule was that you took all of your money back. The schemer never got good title to it (his title was "voidable"); so until your money gets mixed with someone else's so that it can't be identified, you can always reclaim it. This isn't a question of what's fair to me. The money is yours, and did not stop being yours when you were tricked into handing it over.

But other recent decisions say that we share the money. Why get hung up on technicalities about ownership when you and I made the same decisions and the rest was happenstance? Giving you all of your money in this case bothers courts partly because it means that the Ponzi schemer got to decide which of us would be "made whole" and which would get nothing. The schemer spent my money, not yours, so you get lucky and I don't. No fair!

And maybe it wasn't a question of luck. A schemer might decide to spend the money of strangers first, and leave the money of his friends and associates unspent and separate, so that the people he cares about will do better if the house of cards collapses. Does that strike you as a realistic train of thought, and thus a plausible worry? It seems that way to me. A court could try to have it both ways by saying it will force victims to share their money when it's clear that the Ponzi schemers were playing favorites in this way. How good do you think judges would be at figuring that out?

As you can imagine, Ponzi schemes create lots of chances to think about restitution, and to suffer if those chances are overlooked.