The Expert Podcast

So, we had a great conversation with a client this week about scams, frauds, Ponzi schemes, and online scammers that try to take your money. And the question came up: how often do these people get caught, and what can you do for them to get caught? In this person's opinion, part of the reason for an investigation wasn't just to try to get their money back; it was also to make sure that the scammer actually faces consequences, that they have some type of retribution for what they've done, and that they're not able to do it to other people. So, the question is, do these people ever get caught? Do scammers get prosecuted? And that's a good question. And we assume that clients know about this and see it, but it's important to discuss it. Yes, scammers do get caught; fraudsters get prosecuted all the time. We're going to look at four or five examples of it, and what is the difference between those who do get caught and those who continue to get away with it?

And there's a couple examples of modern-day scams like these pig butchering scammers that you've heard a lot about where they start out really small, they take a little bit of your money, show you a false profit, ask for more, show you more profit, and they keep repeating that until you've dumped a lot of money into their scam, and then when you look to take money out, they say, Hey, there's some taxes you have to pay or an accounting fee, and then that's when it blows up. But one of the ones that's important to look at first is an old one. This is a guy named Scott Rothstein, and Scott Rothstein actually was a kind of old-school scammer back in the mid-2000s; I think it was 2007, 2008, when his scam blew up. He was actually an attorney, and he presented to investors that he had these secret lawsuit settlements that you could invest in so people could get their money right away, and then the money that came in from the settlement payments would go to the investors at big profits. It turned out to be a scam, a billion-dollar Ponzi scheme in South Florida, and this is a case we did some work on. We did some investigations for clients and for victims. It turns out that, in the long run, the scammers got all their money back. The scammer Scott Rothstein was sentenced to 50 years in federal prison, so that was good retribution. The side story is that you can see here in the news article that TD Bank is still feeling financial pain. Why is that? This is one of the reasons why you want to get scammers and Ponzi fraud perpetrators in trouble because there are third parties that may have to make up the difference for losses. Scott Rothstein spent a lot of the money he stole from investors. He bought watches, dinners, vacations, and all kinds of stuff, so a lot of it was gone; more than half of it had been spent, but the victims got all their money back. Why is that? There were third parties that had to kick in money to make sure that the investors were made whole. TD Bank was one of them because they allowed him to open bank accounts without proper documentation.

So, let's look at some other cases. Here's Naville, who's in Illinois, charged with a high-dollar crypto scam. We've heard about those; you may have been a victim of them. It's important to know that a lot of people think these crypto scams are operated outside the country. This was in the Chicago suburbs. Here's one in Texas where they had a cattle Ponzi scheme. All these Ponzi schemes have different types of investments supposedly behind them. Crypto, bonds, cattle, cars, real estate—it doesn't matter what they say the money's for; it's all a scam. And this one was in Texas; it was a Ponzi scheme, and the FEDS are prosecuting this person. Here's another Ponzi schemer arrested in Parkland; this is in Florida, right? $1 million Ponzi scheme. This is in Florida, and he tried to flee prosecution, but eventually he got caught. Here's another one that had a Ponzi scheme for wine. He did wine fraud; he said I have all these bottles of wine; it's worth all this money; you put in an investment; you'll make a big profit—$100 million, right? And now he's extradited; he fled the country; he was in the US, but they got him back.

Why is it important to know about these? It's important to know about these because not every fraud is investigated by law enforcement, and not every crime is prosecuted. What makes the difference? First of all, in some jurisdictions, it has to do with the dollar amount. If somebody stole $10,000 from you, they're probably not going to drop everything and jump on this case. The other part is how to make it visible to the investigators. We work with government agencies all the time, and they tell us very clearly that part of it is, is there a clear probability that they can prevail in this prosecution, and sometimes it's a combination of private sector and public sector, where private investigators do some of the heavy lifting, leg work to kind of hand it to them on a silver platter so they don't have to do as much determination and due diligence to find out is it really a scam because, look, lots of people lose money on various types of business losses, some of them aren't really scams or frauds, they're just a business loss, and they can't look at every single one. Certainly, report your fraud to the IC3. That'll put it on the radar screen, but don't expect that every case, even at the IC3, is going to turn into a government investigation. But you do want to get these people caught because if they are caught, it triggers third-party liability for your losses. Also, if there's a trustee installed by the government, they can do some of the investigation on your behalf, where the heavy lifting at the expense of it isn't borne by the investors, but sometimes you have to prime the pump a little bit and get some of the evidence available to them so they can see clearly, not just your words or your verbal statements, to get them kind of off the dime to start the investigation.

Look, the government agencies, FBI, Local District Attorneys, even local police departments, they do great work, they're looking out for victims but they have a big caseload and there's many other tasks they have and you've heard many of these government research and investigative agencies have been defunded, they don't have as many personnel as they used to have so sometimes priming the pump, getting them some documentation in the form of an investigative report, in the form of certified records will get them to see yeah this really is a scam let's see what else is there but if you're asking them to start from scratch and do all the work for you they don't have enough manpower to do every single case sometimes they'll just tell you no this is a civil matter we can't do it but you can increase your odds of having a case rise to the level of being prosecuted by giving them a clear picture of exactly what's done because again as a victim you have certain baggage where you know it's affected you financially it's hurt you financially you may have trust issues now so the way you describe it to the person is going to be very personal way you describe it to the agency and they may not be able to see through the personal side of it to see the logical practical side of it so do yourself a favor and present a good rational argument if you'd like more information about that you can click the link below we you can schedule a consultation with a licensed investigator to discuss your case further and see how it can be made more likely to rise to the level of proper prosecution to keep the fraudster from making more victims and maybe looking at getting some of your investment back.