At the end of 2022, we saw huge developments with large-scale Ponzi schemes, scams, and frauds, FTX allegedly being one of them. With these scams coming to the surface, one significant question being asked is, how can victims of a scam get their money back if the principal took all the money and spent it already? Well, it comes from third-party liability.
According to this article from The Oregonian/OregonLive, investors were approved by a judge to sue an Oregon bank over one of their customer’s Ponzi schemes. So what happened?
According to the article, a customer of Umpqua bank was running a Ponzi scheme. The bank itself didn’t know anything about it, they weren’t directly involved. However, it was later found that because they didn’t do a few minor details about managing the customer’s account, they’re now on the hook for paying back the victims.
The investors claim that the bank enabled the scheme by allowing the scammer to open a bank account. Official records show that the bank’s own fraud detection software actually issued 140+ alerts of suspicious activity for this particular account, which showed clearly that the transactions were fraudulent, but nothing was done to stop it.
So if you’re the victim of a Ponzi scheme or another type of fraud and you’re worried that the scammer can’t be found or won’t have any assets, keep in mind that third-party liability may be your saving grace. It could be an insurance company, a bank, a website registrant, etc. Before pursuing recovery from a third party, get good legal advice. We’re not attorneys and this isn’t legal advice, but as an investigative agency, we’ve seen instances where third-party liability allows investors to recoup their stolen funds. Especially when the scammer can’t be located, is overseas, or doesn’t have the assets for you to recover.