Investors fear bankruptcy waiver permitted former Pickleball Rocks CEO to escape prosecution
Ponder, a retiree from Oklahoma who referees pickleball games, met Grubbs in 2017 at an international tournament in Spain. A few years later, after Grubbs pitched him an investment opportunity, Ponder gave him $65,000 over the course of several transactions beginning in 2022.
More: 5 things to know about Rodney Grubbs and the fraud accusations involving Pickleball Rocks
Grubbs, a resident of Brookville in southeastern Indiana, used a similar approach to solicit other short-term loans: invest $25,000 for 18 months in exchange for 12% monthly interest. In the case of a default, the deal called for Grubbs to repay investors their principle plus 18% interest.
The money, he told potential investors, would help expand All About Pickleball LLC, his equipment and apparel business better known as Pickleball Rocks. Drawn in by Grubbs' personable demeanor, his presence on the national pickleball scene and his outward professions of faith, hundreds of people from across the U.S. took the offer.
But when the first of Ponder's loans came due, Grubbs didn't pay him back. Ponder soon discovered he wasn't alone. In late 2023, a group of unpaid investors decided to file a lawsuit to force Grubbs into bankruptcy and stop him from soliciting more investors for money. Ponder joined the case.
They've now waited more than 18 months to see if they will get any of their money back — and if Grubbs will be criminally charged for operating what they allege was a nationwide Ponzi Scheme. So far, neither has happened, leaving jilted investors frustrated and feeling hopeless.
More: Indiana Secretary of State orders pickleball apparel CEO to halt alleged investment scheme
Grubbs did not respond to IndyStar inquiries sent via Facebook Messenger. A phone number listed for him no longer works. In court documents, he has denied operating a Ponzi Scheme and defrauding investors — though he has conceded to poor bookkeeping practices.
So far, Grubbs hasn't explained what happened to the $47 million he acknowledged owing investors. He also hasn't been charged with any crimes.
"It's just not right," says Ponder. "It's not right that he gets to walk free."
Investors were temporarily buoyed after federal agents, with assistance from local police in Brookville, raided Grubbs' home in December. The FBI removed a phone, laptop and other personal and business documents.
The FBI also opened a portal for victims to submit their information if they wished to be interviewed by federal agents. Some investors hoped the raid would lead to criminal charges, but nearly seven months later a spokesperson for the FBI declined to discuss the status of the case.
"It's moved incredibly slow," Ponder said. "You know he's old. He could very very easily die before anything is adjudicated."
Ponder said he can deal with not getting his money back. Financially, he is OK, but some unpaid investors are struggling to adjust to losing their financial safety net. Others invested all they had with Grubbs — likely to never see any of their money again. Those are the victims Ponder worries about the most.
Many of those investors are retired professionals who played pickleball for fun or to stay active. Some made multiple investments with Grubbs believing they could make money off the increasingly popular sport. Many permitted him to roll over their loans several times, convinced an even bigger guaranteed payment was on the horizon.
But as time moves on, Ponder said some investors are giving up and trying to come to terms with their financial losses.
"They're like, 'Oh well, yeah, he got us. Gosh, that really sucks,' and then they're going on with their lives," said Ponder, who added he's not sure what his next move will be or whether he'll keep pushing for justice.
There was another glimmer of good news for victims in June, when the U.S. Department of Justice issued a press release about the bankruptcy case. It said Grubbs agreed to forever waive his ability to discharge $47 million in unsecured debt through the bankruptcy case. The waiver does not equate to an admission of guilt, but means Grubbs still is legally on the hook for the debt.
The statement said the action came after an investigation by the agency's U.S. Trustee Program obtained personal and business records and examined Grubbs under oath. Transcripts of those examinations, which were not conducted in open court, have not been made public.
The Justice Department declined to confirm or deny an ongoing investigation.
In the meantime, Grubbs assets have been sold off as part of the bankruptcy case to raise money to repay creditors. Roughly $1.2 million was raised from the sale of real estate and pickleball assets, according to court documents.
Grubbs' agreement with the trustee left open a door for creditors to pursue payment through other legal means even after the bankruptcy case is closed.
That's not good enough to investors who feel victimized by Grubbs.
Teri Siewert of Florida pressured Grubbs to repay her before the bankruptcy case and led the charge to stop him from seeking new investors. Siewert also is part of the original group of investors who successfully forced Grubbs into bankruptcy.
Now, she is focusing on finding alternative options to hold him accountable, such as asking Case Western Reserve Law School in Cleveland to provide pro bono legal help to elderly people allegedly defrauded by Grubbs. Siewert said she started exploring options after learning from her attorney, Matt Foster, that the U.S. Attorney is not likely not charge Grubbs with any federal crime.
Foster could not be reached for comment. Meanwhile, Wayne Greeson, an attorney who also loaned Grubbs money and is representing several other claimants, said he has not received an update on the federal investigation and is unsure about its status.
Siewert fears the waiver was a back door that permitted Grubbs to escape criminal prosecution.
"How is that even remotely in the public's interest? The victims are left with no faith in the justice system," she said via text message to IndyStar. "Seems all that matters is money. Since there's no money to be had — justice is denied the victim. No restitution is possible since no criminal charges were adjudicated. Travesty."
While hundreds of creditors wait for repayment, the bankruptcy trustee assigned to oversee case has reached a settlement agreement with Grubbs' sons and their wives.
The family members had sought to recoup more than $1.2 million they claimed Grubbs owed them and joined the bankruptcy cases as creditors. Zack and Amy Grubbs filed a claim totaling $964,706. Josh and Abby Grubbs filed a claim nearly $250,000.
Trustee Joanne Friedmeyer objected to the claims. According to a filing submitted by Friedmeyer, Grubbs paid his sons and daughter-in-laws a salary and reimbursements in exchange for their work marketing and selling Pickleball Rocks products.
"Based on records obtained from FCN Bank via subpoena," she wrote, "it appears that the transfers were made in the ordinary course of business ... and in exchange for reasonably equivalent value in the form of the labor of claimants."
Grubbs sons and their wives signed the agreement without admitting or denying any responsibility for liability, but with the understanding they would file no other claims against the estate.
James O'Connor, the Fort Wayne attorney who represents the sons and their wives, declined to comment on why they entered into the agreement with the trustee. He called the matter a sensitive issue wrapped in a sad family dynamic.
"It's just no one else's business," O'Connor said.
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