--- title: "The missing end-user funds: how big the shortfall was and who was paid" language: en canonical: https://dossiertwist.com/dossiers/synapse-financial-technologies/missing-funds/ as_of: 2026-10-15 keywords: ["Synapse Financial Technologies","SynapseFi","Synapse Payments","Synapse Brokerage","Synapse Credit","Sankaet Pathak","Evolve Bank & Trust","Evolve Bancorp","AMG National Trust","Lineage Bank","Mercury","Yotta Technologies","banking-as-a-service","FBO accounts","Chapter 11","Jelena McWilliams","TabaPay","CFPB stipulated judgment","FINRA expulsion","end-user funds shortfall"] --- # The missing end-user funds: how big the shortfall was and who was paid **Question.** How much end-user money was missing after Synapse collapsed, and how much has been returned? **Answer.** At the trustee's appointment the four partner banks held about $219 million of FBO funds, while Synapse's ledger showed more: the trustee put the apparent shortfall at $65 million to $95 million and said it appeared to predate the bankruptcy. By November 2024 about 85% of the funds held had been paid out; when the trustee moved to end the case in June 2025, the exact size and sources of the shortfall had not been established. ## Where the money was in May 2024 - Analysis: When Jelena McWilliams became trustee on May 24, 2024, the partner banks had lost access to Synapse's systems, had reason to doubt its ledger and had found unexpected shortfalls in their FBO accounts, and they had no safe way to share data. They paused distributions, and on May 31 the court approved a protective order letting them and the trustee share trial balances. The trustee was told that Synapse and Synapse Brokerage shared employees, functions and systems, including a single ledger database on MongoDB, and that the banks generally regarded May 17, 2024 as the last date the ledger was complete and accessible; with all employees and contractors terminated on May 24 for lack of funds, no one was left to interpret it. [src-017] [src-031] - Analysis: At the appointment the four banks held $219,077,467 of FBO funds connected with Synapse: $43,339 at American Bank, $110,290,040 at AMG, $46,926,558 at Evolve and $61,817,530 at Lineage, whose single FBO account combined DDA and FBO funds. Demand deposit accounts were the smaller part of the problem: the banks told the trustee they had fully reconciled them, and no shortfall was reported. Evolve began paying DDA funds on its regulator's instructions, and by November 12, 2024 about 91% of the roughly $6.5 million of DDA funds held by Evolve and Lineage had been paid. [src-065] [src-017] [src-032] ## Estimating the gap - Analysis: The trustee's first report, filed on June 7, 2024, relayed the banks' figures: about $180 million held in accounts associated with end users and possible platform reserves, against a remaining trial balance of about $265 million, a shortfall of about $85 million whose source was unknown. A week later at least one bank put the FBO shortfall at $65 million to $96 million, the range reflecting about $31 million of interest and rebates whose ownership by end users was unresolved. American Bank and AMG reported no shortfall, Evolve said it had not yet reconciled enough to tell, and Lineage said it lacked the data. [src-031] [src-017] - Analysis: Seeking to end the case in June 2025, the trustee told the court that the apparent shortfall of $65 million to $95 million against Synapse's ledger had persisted throughout and appeared to have existed before the bankruptcy. The banks had completed the reconciliation needed to return funds, but the exact amount and sources of the shortfall had not been established, because the estate lacked resources and some banks declined to share their data voluntarily. The CFPB's 2025 complaint alleges a similar sequence: banks found less money than Synapse's records showed, a shortfall it says the trustee estimated at $60 million to $90 million; consumers waited weeks or months, some distributions took more than eight months, and many consumers had not received their full balance. The trustee and the debtor neither admitted nor denied these allegations in the stipulated judgment, but agreed that they would be taken as true in any proceeding based on it. [src-042] [src-004] [src-073] [src-101] - Analysis: Press reports in June 2024 counted more than 100,000 people locked out, with $265 million of deposits according to the trustee, or more than 200,000 customers; in September 2025 a trade-press report said many end users of Yotta, Juno and Copper still could not reach their funds 17 months after the filing. These are press estimates; the trustee's reports count dollars and paid end users bank by bank. [src-027] [src-102] [src-029] [src-093] ## What the banks paid out - Analysis: AMG, which held about $110 million, paid about $55 million just before the appointment and $109,869,963, 99.6% of its FBO funds, to about 91,400 end users by November 12, 2024, including $2,360,734 for Juno's users and $1,289,619 for Yotta's. Evolve completed its reconciliation as of October 18, 2024, began paying on November 4, and by November 12 users had chosen payment methods for more than $21 million of the $46.9 million it had held; it declined, citing litigation, to give the trustee reconciled balances, and the trustee wrote that she was disappointed with results that notified some end users of amounts considerably less than the Synapse ledger showed. Lineage's payments are set out with its account below. [src-065] [src-032] - Analysis: Overall, $187,121,978, about 85% of the $219,077,467 held at the appointment, had been distributed by November 12, 2024 and $31,955,489 remained. The trustee stated that she expressed no opinion on whether any bank's liability to end users was limited to what it held, and the shortfall estimate was unchanged. [src-065] ## Explanations offered - Analysis: Lineage told the trustee that in the autumn of 2023 it found Synapse had moved about $60 million of end-user funds into a Synapse reserve account securing its processing agreement, that it moved the money into an FBO account for the end users, and that it terminated the agreement for cause in March 2024; the reserve account records are not retained. A trade-newsletter headline of October 2024 reported, citing a partner bank and former employees, that Synapse had used customer funds to meet bank reserve requirements. Asked in a November 2024 interview, Pathak said he was not aware of any misappropriation and called that allegation factually false; the interviewer noted that Synapse would have instructed Evolve to move the funds to Lineage and had represented them as its own. Lineage had paid out $49,200,617 of FBO funds by August 29, 2024 and, by November 12, 2024, $55,252,015 to 10,175 end users, 91% of the FBO funds it held at the trustee's appointment by the trustee's count. Separately, in findings of its January 28, 2026 order accepting Mark Paverman's settlement, to which he consented without admitting or denying the allegations and which bind no other respondent, FINRA found that the bank it calls DDA Bank 2 had required a $60 million minimum balance from around December 2022 after finding deficiencies in Synapse's record-keeping. [src-031] [src-094] [src-025] [src-065] [src-009] - Analysis: Lineage also said Synapse's trial balance was contradictory and unverifiable, that Synapse had moved lump sums totalling hundreds of millions of dollars between banks without allocating them, and that its final trial balance assigned missing funds to banks apparently arbitrarily. In November 2024 AMG and Lineage set out their flows with Evolve, a combined net $957,567,777.54 moved to Evolve; they said they had paid out according to Synapse's trial balances as confirmed by reconciliation, rejected Evolve's suggestion that they might still hold substantial funds, noted that AMG had received more than $80 million from American Deposit Management Company during the wind-down for processing end-user payments, and urged the banks to find out why Synapse's trial balances exceeded the money held. These are the positions of the two banks; Evolve's own account of these flows is not retained. [src-032] [src-093] [src-065] - Analysis: In 2023 Synapse's audit committee engaged Kroll to audit and reconcile its ledgers, and in June 2024 the trustee was meeting Kroll to discuss its findings. A February 2025 press report, relaying a newspaper investigation, says Victor Medeiros, formerly a senior director in Synapse's finance department, warned Kroll's accountants in 2023 that customers had not been credited with the full interest due and were more than $3 million short as of mid-2023, that Kroll confirmed the estimate to the board, which demanded that the shortfall be fixed at once, and that Synapse said it could not cover the losses. Kroll's work and board minutes are not retained, no response from Synapse's former directors to this account appears in the record, and Medeiros's lawyer did not respond. Pathak said in November 2024 that the board, which at various times included directors from Andreessen Horowitz, Trinity Ventures and Core Innovation Capital, was broadly aware of the problems, was trying to do the right thing and asked him not to shut down and escalate; no statement by those directors or their firms is retained, and the investors declined to comment or did not respond to another outlet. [src-017] [src-076] [src-021] [src-025] ## Pressure from end users, Congress and regulators - Analysis: On June 28, 2024 Senators Sherrod Brown, Ron Wyden, Tammy Baldwin and John Fetterman wrote to Pathak and to Synapse's investors and partners, including Evolve's chief executive Scott Stafford, that customers had been cut off since mid-May, that there was a potential shortfall of $65 million to $96 million, and that it was ultimately the recipients' responsibility to ensure the safety and accessibility of end-user funds, urging them to pool resources to release all frozen deposits; the letter is a request and assigns no legal liability. On July 2 the Federal Reserve's general counsel, Mark Van Der Weide, replied to the trustee that exact balances were hard to establish because the funds sat at several banks in pooled accounts, and that the Federal Reserve, as Evolve's primary federal regulator, expected supervised banks to return customer funds consistent with applicable law and would continue to monitor Evolve's progress. The trustee's counsel urged MongoDB not to shut down the database holding Synapse's records, which were needed to distribute more than $100 million and trace the shortfall. [src-007] [src-077] [src-033] - Analysis: After Evolve's November 2024 payouts, Yotta and Juno customers reported receiving small fractions of their balances, such as $0.84 on $10,328, in screenshots seen by the trade press. Yotta, which is in litigation with Evolve, said a survey of more than 8,700 users with deposits of more than $46.7 million showed Evolve payments of $7.7 million, a 16.5% payout ratio, while the Synapse trial balance showed Evolve owing about $158 million; a Yotta spokesperson said Evolve had acknowledged knowing of the shortfall since at least September 2023 without telling Yotta. Evolve declined to comment further and has maintained that the shortfall arose from inaccuracies in Synapse's ledger. It let end users choose a payment method until December 4, 2024, after which it would send checks; the trustee's November 2024 report showed 44% of Evolve's FBO funds distributed. End users appealed Evolve's results, contacted lawmakers and filed claims with the FDIC, the CFPB and the Federal Reserve Bank of St. Louis, Evolve's primary regulator, and a users' website coordinated complaints to the Federal Reserve against Evolve, Lineage, AMG and American Bank. [src-030] [src-051] [src-065] - Analysis: After the CFPB's 2025 judgment, its Civil Penalty Fund allocated $46,248,291 for Synapse victims on November 28, 2025 and a further $8,965,767 on May 29, 2026; Yotta reported that the timing and amounts of the CFPB's payments remained to be determined. [src-060] [src-051] ## Sources - [src-017] Court record source · src-017 - [src-031] Court record source · src-031 - [src-065] Court record source · src-065 - [src-032] Court record source · src-032 - [src-042] Court record source · src-042 - [src-004] Enforcement action page: Synapse Financial Technologies, Inc., Consumer Financial Protection Bureau, 2025-09-15 - [src-073] Complaint, CFPB v. Synapse Financial Technologies, Inc. (Adv. No. 1:25-ap-01052-MB), Consumer Financial Protection Bureau, 2025-08-21 - [src-101] Stipulated final judgment and order, CFPB v. Synapse Financial Technologies, Inc., Consumer Financial Protection Bureau, 2025-09-12 - [src-027] Media source · src-027 - [src-102] Media source · src-102 - [src-029] Media source · src-029 - [src-093] Media source · src-093 - [src-094] Media source · src-094 - [src-025] Media source · src-025 - [src-009] Regulatory record source · src-009 - [src-076] Media source · src-076 - [src-021] Media source · src-021 - [src-007] Senators' letter to Sankaet Pathak of June 28, 2024, Office of Senator Tammy Baldwin, U.S. Senate, 2024-06-28 - [src-077] Senators' letter to W. Scott Stafford, Evolve Bank & Trust, of June 28, 2024, U.S. Senate Committee on Banking, Housing, and Urban Affairs, 2024-06-28 - [src-033] Court record source · src-033 - [src-030] Media source · src-030 - [src-051] Company statement source · src-051 - [src-060] Civil Penalty Fund allocations, Consumer Financial Protection Bureau, 2026-05-29