The Expert Podcast

Over the years you've heard us talk a lot about third-party liability on Ponzi schemes and scams. How does that work? Well, when somebody scams money from victims like a Ponzi scheme or embezzlement, many times the victims look to recover their money, recover their funds, recover their assets by going and finding out where the bank account is for that person that stole their money, or suing them, or grabbing their real estate. But in some cases, the person or maybe are tough to find, maybe they don't have as too many assets. So what happens is there's a legal Theory called third-party liability or vicarious liability and that means that there may be third parties even though they weren't part of the actual fraud or the crime that enabled the fraud that enabled the scam or extended the scam that may have liability because they basically made it easy for the scammer to do this.

A lot of times those third parties are banks, they're accountants, they're attorneys, they're advertising companies and there's been many cases where this has proved successful. The Bernie Madoff case, one of the biggest Ponzi schemes in the history, had third-party liability. The Scott Rothstein fake attorney case in fake lawsuit case in Florida had that and here we go again, here's a major bank that was sued for $300 million Ponzi scheme over 10 years, 1,000 investors lost money and what they're alleging is that the scammer was able to commit their fraud easier because of this Bank not making it hard for them to open up accounts or to identify fraud or to Red Flag activity that's usually what the process is.

Now remember we're not attorneys we're not giving legal advice so get good legal advice on this but make sure that your investigation into a fraud is also looking for possible third party are there accountants are there business agents are there sales that enable this fraud that may have liability that may help get the recovery back because it's a whole lot easier to find the assets and get money from a bank than some scammer Ponzi scheme fraudster that's hiding somewhere overseas, a lot of times the low hanging fruit is coming from more obvious targets.