Center for Special Needs Trust Administration: Trustee Wind-Down After $100M Shortfall

The Center for Special Needs Trust Administration filed chapter 11 on February 9, 2024, after disclosing that approximately 100 million in trust funds was missing from beneficiary accounts. The St. Petersburg nonprofit had administered more than 2,000 special needs trusts for disabled individuals across the country, and its First Day Declaration tied the shortfall to loans founder Leo Govoni allegedly issued to himself through a company he controlled.

The case moved quickly from a debtor-in-possession filing to a trustee-controlled wind-down. The court appointed Michael Goldberg as chapter 11 trustee on March 21, 2024, after the governing board resigned. Goldberg took over forensic investigation, beneficiary distribution management, trust-transition planning, and litigation against insiders and third parties. In January 2025, the bankruptcy court found Govoni liable for more than $120 million in damages. By June 2025, a federal grand jury indicted Govoni and former accountant John Witeck on wire fraud, mail fraud, money laundering conspiracy, and bank fraud charges.

Debtor(s)	The Center for Special Needs Trust Administration, Inc.
Court	U.S. Bankruptcy Court, Middle District of Florida (Tampa Division)
Case Number	8:24-bk-00676
Petition Date	February 9, 2024
Judge	Hon. Roberta Colton

Filing Background and Trust Operations

The Center for Special Needs Trust Administration was a Clearwater-based 501(c)(3) nonprofit that served as trustee or co-trustee for special needs trusts funded by personal injury settlements, court awards, and other payments. Its First Day Declaration states the organization administered trusts for approximately 2,000 beneficiaries located in nearly every U.S. state and internationally. As of the petition date, the organization managed trusts containing approximately $200 million in assets.

The declaration says an internal investigation discovered that founder Leo Govoni had issued himself loans totaling approximately $100 million between 2009 and 2020 through Boston Finance Group, an entity he controlled. No record existed of any loan being officially approved. The filing was intended to provide notice to beneficiaries, preserve going-concern value, facilitate investigation, and pursue recovery of the diverted funds.

The Center alleged that one of Govoni's companies controlling the organization's IT operations had locked employees out of financial records, limiting the ability to trace funds at the outset of the case. A spokesperson told local media that more than 1,000 client accounts out of approximately 2,000 had been partially or entirely drained.

The debtor's ordinary-course distribution process before bankruptcy involved receiving beneficiary requests for expenses not covered by public assistance, evaluating those requests for legal compliance, and paying vendors or service providers directly from the relevant trust funds if assets were available. Maintaining that process in a bankruptcy setting required immediate court authorization because each beneficiary's trust was a separate legal relationship, not a general unsecured claim against the estate.

Govoni Fraud Scheme and $120 Million Judgment

The First Day Declaration describes a scheme in which Govoni transferred trust funds to Boston Finance Group under the guise of loans, then maintained control over accounting and IT operations through related entities to conceal the diversions. The later federal indictment says the scheme ran from June 2009 through May 2025 and that Govoni and co-conspirators sent fraudulent account statements with false balances to disabled victims and their families.

In January 2025, Judge Roberta Colton entered a summary judgment finding Govoni liable for $88 million plus $32.2 million in interest. Forensic accountants determined the total exceeded $120 million, contradicting Govoni's position that he owed only $30 million. The court also held an ex parte emergency hearing and temporarily restrained Govoni from selling or transferring assets from his nearly 200 corporations.

The later indictment alleged Govoni used stolen funds to purchase real estate and fund a brewery, travel via private jet, and make deposits in personal bank accounts. A local physician separately settled a lawsuit against Big Storm Brewery and its co-owners, Govoni and his son LJ, over ties to the Center.

The trustee pursued recovery against Govoni-connected entities through multiple adversary proceedings. The trustee obtained a consent final judgment of approximately $8.93 million against Big Storm Real Estate LLC in Adversary Proceeding No. 8:25-ap-00048 on November 4, 2025. An earlier motion to approve the compromise with Big Storm Real Estate had been granted in October 2025 after Briar Capital Real Estate Fund, LLC objected to the settlement terms. Separate adversary proceedings targeted Boston Finance Group (Adv. No. 8:24-ap-00139), Artspace Properties LLC (Adv. No. 8:25-ap-00006), Propertycraft Enterprises LLC (Adv. No. 8:24-ap-00407), and Fiduciary Tax & Accounting Services LLC (Adv. No. 8:24-ap-00343).

Goldberg Appointment and Estate Control

The court appointed Goldberg on March 21, 2024, following the resignation of the governing board. Goldberg, a Fort Lauderdale attorney, took over direction of forensic work, trust-transition efforts, litigation against insiders and third parties, and the liquidation of estate-connected assets.

Trust distribution procedures. A core first-day issue was maintaining beneficiary distributions while investigating the missing funds. The debtor's initial trust-distribution motion sought authority to continue administering distributions, fund critical beneficiary expenses, and preserve flexibility to stop distributions from compromised accounts. The debtor later amended those procedures by July 2024 to increase the cap on advances for critical beneficiary expenses from $20,000 to $30,000. A September 2024 interim order authorized continued ordinary-course distributions for some beneficiaries while permitting cessation for accounts where fund levels required a different approach. The court continued extending distribution authority on an interim basis through 2025 and into 2026; a February 10, 2026 interim order again renewed approval of the trust distribution procedures with a further hearing set for March 26, 2026.

Cash management. The debtor's cash-management motion disclosed nine segregated trust bank accounts, eight held at American Momentum Bank and one at KeyBank, used solely to receive transfers from investment accounts and make beneficiary distributions. The debtor argued that funds in those accounts were not property of the estate but trust funds in which beneficiaries held the equitable interest. The trust cash-management framework remained central throughout the case. A February 10, 2026 interim order continued the debtor's authority to maintain trust bank accounts, use existing business forms and checks, and operate the existing trust cash-management system, with a further hearing scheduled for March 26, 2026.

Class action litigation counsel. In September 2025, the court lifted the automatic stay to permit Kozyak Tropin & Throckmorton LLP to pursue claims against third parties on behalf of class-action beneficiaries. The court subsequently approved KTT's retention as special litigation counsel to the chapter 11 trustee in October 2025, formalizing the firm's role in the adversary proceeding against American Momentum Bank and potential actions against other third-party defendants.

Wind-Down and Trust Transition to CPT Institute

By October 2024, the trustee moved to wind down the debtor's operations and transition trust administration to CPT Institute, Inc. The wind-down motion proposed resigning the debtor as trustee of the administered trusts, transitioning more than 2,000 trust beneficiaries to an independent successor trustee, and terminating the Critical Expense Loan program effective December 31, 2024.

The court's November 6, 2024 order approving the wind-down established a framework under which pooled-trust beneficiaries would transition to CPT unless they opted out, while non-pooled-trust beneficiaries would either opt in to CPT or choose another successor. The order set November 22, 2024 as the election deadline and provided that the debtor would resign as trustee on or before December 31, 2024. It also preserved the chapter 11 trustee's standing to pursue litigation claims on behalf of beneficiaries unless a beneficiary affirmatively opted out of that representation.

Trust-transition work continued into 2025. In July 2025, the trustee sought authority to execute joinders needed to complete transfers for remaining beneficiaries to CPT. The August 13, 2025 order granted that authority and authorized the same process for additional discovered trusts, while making clear that beneficiaries could later move to other qualified successor trustees.

The unsecured creditors' committee in January 2026 issued a notice of a Zoom call to discuss the status of the wind-down and provide important information to all beneficiaries, indicating that beneficiary communication remained an active element of the case administration two years after filing.

American Momentum Bank Litigation

American Momentum Bank held eight of the nine trust accounts and is now a defendant in an adversary proceeding brought by the trustee on behalf of approximately 6,000 beneficiaries.

In April 2024, the trustee moved to enforce the automatic stay in response to class-action litigation touching the same allegedly diverted trust funds. That motion identified aiding-and-abetting breach-of-fiduciary-duty allegations against American Momentum.

The dispute continued into late 2025 and 2026. In November 2025, AMB filed a stay-relief motion seeking permission to join the trustee and debtor as parties in the adversary proceeding Goldberg v. American Momentum Bank, Adv. No. 8:25-ap-00347-RCT. AMB argued joinder was required to assert indemnity-related positions and avoid inconsistent obligations. The court denied AMB's request to stay the adversary proceeding on November 21, 2025, allowing documentary discovery to proceed while temporarily staying depositions. The trustee is represented by Kozyak Tropin & Throckmorton LLP, and AMB by Carlton Fields PA and Beck Redden LLP.

AMB's stay-relief motion came up again at a February 24, 2026 hearing. A hearing proceeding memo reflects that the court continued the matter to March 26, 2026 at 3:00 PM with no further notice required. The same hearing granted the trustee's motion to retain Ghiglieri and Company as a banking law expert and litigation consultant under 11 U.S.C. sections 363 and 327, signaling that the trustee is building specialized expertise for the AMB adversary claims. AMB has argued that it functioned as a depository bank with no duty to monitor how the Center used trust funds, a position the trustee disputes.

Asset Sales and Estate Liquidity

The trustee pursued sales of real property tied to Artspace Properties LLC, an estate-related entity. In June 2025, the trustee sought authority to sell 752 2nd Avenue Northeast, Largo, Florida for $380,000 free and clear of liens, with net proceeds expected to satisfy the secured creditor Teal Holdings after costs and a reserve. The court entered sale orders on multiple Artspace properties during 2025, including a July 7, 2025 order authorizing the sale of 3256 and 3258 Adrian Avenue, Largo, and a November 2025 order approving an additional Artspace property sale.

A December 2025 sale motion sought approval to sell 2637 Westview Court, Clearwater, Florida for $725,000 with estimated net proceeds of about $663,822. The court approved the sale and waived the Rule 6004(h) stay to permit immediate closing.

3 Daughters Brewing. In October 2025, the trustee moved to sell the estate's membership interest in 3 Daughters Brewing, LLC free and clear of liens, claims, and encumbrances. The court approved the sale on October 27, 2025. Big Storm Brewing, the Govoni-owned craft brewery that once operated multiple taproom locations across Florida, was sold at auction amid the fraud proceedings in January 2026.

Escrow distribution authority. In December 2025, the trustee moved for an order confirming authority to receive and distribute escrowed sale proceeds and to pay attorney fees from those escrowed funds. The court granted that motion on February 6, 2026, allowing the trustee to direct the disbursement of escrowed proceeds from earlier property closings without returning to court for each individual distribution.

Avoidance action deadline extension. The trustee in December 2025 moved to extend the deadlines for bringing avoidance actions and other estate actions under 11 U.S.C. sections 108, 546, and 549. The court granted the extension on March 2, 2026, preserving the trustee's ability to pursue preference, fraudulent transfer, and other avoidance claims as the investigation of Govoni-connected entities continues.

Domain name recovery. The trustee in February 2026 moved on an expedited basis to compel the transfer of domain name accounts associated with the debtor's operations. The court granted the motion on March 2, 2026 after a February 24 hearing, directing the transfer of the disputed domain accounts to the trustee's control.

Estate liquidity. The September 2025 monthly operating report showed total cash of approximately $361,453, consisting primarily of about $359,508 in the Wells Fargo DIP operating account and about $1,945 at American Momentum. The same MOR reported total assets of approximately $109.17 million, total liabilities of approximately $106.43 million, and ending equity of about $2.74 million. The trustee filed a January 2026 monthly operating report on February 27, 2026, and a December 2025 monthly operating report on February 2, 2026, continuing the regular cadence of financial reporting to the court and parties in interest.

Criminal Charges Against Govoni and Witeck

On June 23, 2025, a federal grand jury unsealed an indictment charging Leo Joseph Govoni, 67, and John Leo Witeck, 60, in connection with the fraud scheme. The indictment charges one count of conspiracy to commit wire and mail fraud, three counts of mail fraud, six counts of wire fraud, and one count of conspiracy to commit money laundering. Govoni faces additional charges of bank fraud related to a $3 million mortgage refinance loan, an illegal monetary transaction, and making a false bankruptcy declaration.

The bank fraud charge carries a maximum penalty of 30 years in prison. Each wire fraud, mail fraud, and conspiracy count carries a maximum of 20 years. The case was investigated by the FBI, IRS Criminal Investigation, HHS Office of Inspector General, and SSA Office of Inspector General.

Unlike banks and trust companies subject to regulatory oversight, the Center operated as a nonprofit whose operations were not closely scrutinized or audited by the government.

In the bankruptcy case, mediation was ordered regarding Witeck's role in the fraud. A notice of mediator selection filed February 3, 2026 identified Roy Kobert as the appointed mediator, with a hybrid mediation session scheduled for March 6, 2026. Separately, Melissa Beck filed a notice of appeal challenging the court's compensation award order, but the court dismissed the appeal on February 18, 2026 for failure to pay the filing fee and denied Beck's motion for a stay pending appeal.

Akerman Fees and Interim Compensation Orders

The first interim compensation order, entered October 15, 2024, approved $601,700 in fees and $4,820 in expenses for Akerman LLP, $44,300 in fees for trustee Goldberg, and $51,890 in fees plus $27,569 in expenses for Akerman's eDiscovery Services Team, covering approximately March through July 2024.

The second interim compensation round, as amended in September 2025, approved $2,234,846 in fees and $44,695 in expenses for Akerman, $58,200 in fees for Goldberg, and $654,137 in fees plus $421,140 in expenses for Akerman's eDiscovery team for the period August 2024 through July 2025. The amended order authorized immediate payment of 100% of approved expenses and 50% of approved fees, with the remaining half payable when funds became available and after committee consultation.

Other approved professional awards include $568,644 in fees for Soneet Kapila and $397,023 in fees for Megan Wilson Murray. The court denied Melissa Beck's motion to reconsider the committee counsel compensation award in January 2026. Beck subsequently moved to vacate that order under Rule 60(b) in February 2026, but the court denied the vacatur motion on February 3, 2026.

The September 2025 monthly operating report showed year-to-date professional fees of about $2.78 million against total cash of approximately $361,453.

Frequently Asked Questions

What happened at the Center for Special Needs Trust Administration?

The Center filed chapter 11 on February 9, 2024, after disclosing that approximately $100 million in trust funds was missing. Court filings and the later federal indictment allege that founder Leo Govoni diverted trust funds through Boston Finance Group between 2009 and 2020.

Who is the chapter 11 trustee?

Michael Goldberg was appointed chapter 11 trustee on March 21, 2024. He directs forensic investigation, trust-transition efforts, litigation against insiders and third parties, and asset liquidation.

What happened to trust beneficiaries?

The trustee arranged a transition of more than 2,000 trusts to CPT Institute, Inc. as successor trustee. The court approved the wind-down and transition framework in November 2024, with subsequent orders in 2025 authorizing joinder execution for remaining trust transfers.

Were criminal charges filed?

Leo Govoni and John Witeck were indicted on June 23, 2025, on charges including wire fraud conspiracy, mail fraud, money laundering conspiracy, and bank fraud.

What is the status of the American Momentum Bank litigation?

The trustee's adversary proceeding against AMB (Adv. No. 8:25-ap-00347-RCT) is in active discovery. The court denied AMB's motion to stay the proceeding in November 2025 and continued AMB's stay-relief motion to March 26, 2026. The trustee has retained a banking law expert to support the claims.

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