Scammers and Fraudsters Getting Caught
Okay here’s another story in our series of do scammers ever get caught do fraudsters ever get caught. That’s the big question we get from a lot of our clients who are victims. Do these uh criminals ever get busted? Well here’s another article. The SEC (Securities and Exchange Commission) charged a CEO and a convicted felon spouse in a $56 million Ponzi scheme. Here’s the key: obtains emergency relief. What does that mean for victims? Let’s take a look. In this case, the SEC filed an emergency action and obtained asset.

Asset Freeze and Fraud Details
Frees—that’s the key right there—asset freeze against Wells Real Estate Investment based in West Palm Beach, Florida. It has the names of the people. This is all alleged at this point. It charges them with fraudulently raising $56 million from 650 investors nationwide. A substantial portion of the money came from investors’ retirement savings. They also had 23 related companies that were shell companies and interrelated companies that were in on this fraud. So it was a very complicated type of operation. In many cases, that’s how these scams work.

Scam Tactics and False Promises
The fraudsters, the scammer, will put together this network web of all these companies and represent to the victims that they have a huge portfolio of money and that they’re making you big profits. They’ll tell you, “If you put in $10,000, we’ll double your money in six months,” right? Or whatever the high return is. In this case, they said that they had $450 million in a real estate portfolio and only used investor funds to invest and improve real estate in South Florida. But they really just took the money, and they didn’t really invest that much.

Misuse of Funds
Approximately $11 million of the funds were used to purchase properties which are heavily financed through mortgages. So here’s the thing: they bought the properties but put debt on them, so there was really no return on investment. But at least they could show some properties. They misused $28 million of the proceeds by diverting those funds to dozens of brokerage accounts in highly speculative futures and options tradings, losing $11 million of investor funds. Defendants have paid $6.99 million in undisclosed commissions to sales agents.

Identifying Beneficiaries of Fraud
That’s another very important factor anytime there’s a scam or fraud. You want to look at who are the third parties that benefited from it that may be liable for return of money. If a salesperson or an agent or an accountant or anybody got commission or benefit from a fraud, that’s a good place to look to see if some of that money can come back. It’s called a clawback or a chargeback. We always like to look at any fraud to see: Are there any third parties that benefited from it, even unknowingly? Because if they did, they might have liability.

Recovering Unrecoverable Losses
More importantly, they might have an insurance policy that might cover some of these losses. Many times, the scammer, the fraudster, has spent some of the money that they stole, and it’s unrecoverable. Look, if the scammer spent a million dollars going on vacation, you can’t sell—you can’t get those vacations back. That’s gone. So how do you fill the gaps? Many times, it comes from third parties. It comes from banks. It comes from insurance companies. But the first thing you have to do is shut down the fraud.

The Role of the SEC and Private Investigators
This is a good example of where the SEC stepped in. They did have some private investigative assistance with this to give them some information from the sellers. They were charged with anti-fraud broker dealer representation. They also appointed a receiver. This is an important fact of the case. When a scam is discovered, many times the government will want to appoint somebody to step in and control the assets and finances of that company. That way, the money can’t get further diminished.

Reporting Fraud and Seeking Legal Advice
So if you are a victim of a fraud, the first thing you want to do is report it. If it’s an internet fraud, you want to report it to IC3. Also, consider getting legal advice or contacting a private investigator. You can click the link below to see what options you have. At least do a consultation to find out what’s possible and what’s not possible.

Common Types of Scams
Either way, these scams and frauds are really rampant. They either are crypto scams, real estate scams, bond scams—all kinds of different reasons for sending somebody some money. But they’re never really accurate. They’re never really legitimate. They’re always really just sending money to somebody for the purpose of them lining their own pockets.