Texas Court Blocks Ponzi Scheme Operator From Discharging Debts in Bankruptcy

A Texas bankruptcy court has barred the founder of failed investment platform Privvy from eliminating his debts, siding with the U.S. Trustee Program. The ruling highlights systemic limits when debtors attempt to conceal fraud through bankruptcy proceedings.

Fuller, Privvy's founder, admitted the platform operated as a Ponzi scheme during contempt hearings. He acknowledged fabricating documents, providing false testimony, and altering bankruptcy filings. The U.S. Trustee accused him of hiding assets and lying under oath in both personal and business matters.

After the Justice Department filed a complaint and Fuller failed to respond, the court issued a default judgment on August 1. Creditors may now pursue repayment directly. The case underscores heightened scrutiny of fraudulent actors attempting to abuse bankruptcy protections.