The Expert Podcast

See, now this is what we've been talking about with third-party liability. Here's a great story about a scammer, a Ponzi schemer who took $300 million from victims in Canada. And what happened was the victims discovered that a bank had made this easier for the scammer. Now, the bank allegedly wasn't part of the scam directly, but many times when a scammer, Ponzi schemer, an online fraud does something to take money from victims, they have to use a bank or use other professionals, whether it's an accountant, an attorney, advertising companies, um different types of professional consultants.

And many times those professionals, while they're not really aware directly of the scam, they should know better and sometimes they break their own rules. In this case, the investors have sued a bank, Royal Bank BC, because they're alleging that they lost money because the bank did not do proper oversight on this enterprise. And when banks have certain rules like KYC, know your customer, or certain documents they need to file, if the bank gets lazy or sloppy and doesn't do it, many times that allows the scammer to extend their fraud bigger, to run it longer, to get away with more things, and have more victims.

So, in most large-scale Ponzi schemes or online frauds, a lot of the money that comes back to victims comes from third parties. In this case, the parties are trying to get it from a bank, which is not uncommon. And according to this lawsuit, it says the plaintiffs allege that the Royal Bank failed to detect or prevent misconduct despite having clear regulatory duties. And the scheme was unchecked for years, resulting in massive avoidable losses.

It says that there were several red flags including high volume deposits inconsistent with a mortgage broker. So that's what many times the claim is on a third party is if it's a bank, it's obvious that this account is not used for a legitimate purpose because of the pattern. And how many times have you gotten an email from your bank saying, "Hey, it's a suspicious credit card charge or a suspicious check." And they call you to verify it. So they do this all the time. If they don't do it with a Ponzi scheme, they could have liability.

So if you are a victim of a scam, you want to look at third parties and make sure your investigation—if we do an investigation—we look for this. Make sure that your investigation is looking for potential third parties. It's not guaranteed, but potential third parties that you might want to look at for liability to get some of your money back.

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