The Expert Podcast

So, if you lost money in a scam due to some kind of online fraud or Ponzi scheme, how do you get a bank to pay you back? The bank didn't steal your money, but how do you get a financial institution to give you your money back? Well, here's a good example: it's called third-party liability.

Here's an example where a Swiss bank will have to pay back a hundred million dollars because they helped some scammers hide billions. Now, this has to do with back taxes, meaning that the scammers were scamming the IRS out of tax money, but the logic is the same and the legal theory is the same.
Now remember, we're not attorneys, not giving legal advice, but in many cases we've seen CA situations where a fraudster, a scammer, has stolen money from a person using fraud or a Ponzi scheme, and they spent a lot of the money. Even if they were caught, they were prosecuted, a fraud investigation discovered them, and the fraudster may have spent half the money, so the victims can't get all their money back. Where does the rest come from?

Well, you can go after third parties who enabled the fraud, who extended the fraud, and who made it possible for the fraud to go as long as it did. Many times these third parties are banks, and you might not think the bank has liability, but if they did something either intentionally or even accidentally that let that scammer run their scam longer or made it easier for them to do, they may have liability, and even if they don't see it directly, a lot of times their insurer or the regulators will force them to pay restitution. We've seen this in many Ponzi scheme cases, including the Bernie Madoff case and the Scott Rothstein case. In this case, the victim was the federal government.

So what kind of scams are there out there? Well, here's a big crypto and romance scam. They may sound different, but they're the same. A lot of times, somebody will present themselves as a possible romantic partner online, a dating partner, or some type of friend. It starts out with a friendship, and then it turns into romance, and they start steering you towards investments or putting money into crypto. It turns out it's a scam, and many times there's a bank behind it.

Here's another one that's an embezzlement. This woman stole money directly from her employer—a million dollars—and there's going to be a repayment, but there were also third parties that enabled this. So anytime you have a scam or a fraud, you also want to include in your investigation what third parties may have liability because, in reality, the principal, the scammer, may not have the resources to do it. And as you can see right in this article, let her try to repay; "try" is the key word. Many times, the scammers don't have all the money, so you want to look for third parties to make you whole as a victim.