If you’ve been a victim of a scam, fraud, or a Ponzi scheme, you may find that the primary fraudster only returns some of your money when you go through the entire asset search and recovery investigation process. Fund recovery from scammers can be especially frustrating for fraud victims as funds can be moved and spent to avoid detection. So, how does that get resolved and get your money back from online fraud?
That’s where third-party liability comes in. Like in many fraud cases, the primary source of money that comes to victims, such as in the Bernie Madoff case, comes from third parties. Many third parties, even if they weren’t directly involved with the scam, inadvertently enabled that scammer to help the fraudster take your money. It could be a bank, an attorney, an advertising company, a marketing company, or employees that allowed that scammer to do as much damage as they did. In many cases, there’s recovery available from those third parties.
Part of any investigation is discovering which third parties enabled that scammer to take your money and perpetuate the scam, even by accident. It could be a website company, or it could be a registrar of domain names. Here’s a perfect example: there was a $7 billion Ponzi scheme, and the victims were short $1.2 billion. The bank TD Bank involved with this had to pay out, even though they didn’t do the actual scam. They weren’t the ones who took the money or were the Ponzi schemer; they just opened up bank accounts for this scammer.
Now, they didn’t necessarily know that this person was committing fraud. They probably didn’t realize that the person was doing a Ponzi scheme, but they may not have performed enough due diligence or missed some paperwork when they let them open the accounts. There will always be something that the third party did unknowingly that allowed that scam to extend or become more significant or last longer. And that’s where third-party liability comes in. So, when you investigate fraud, check out these third parties.
It’s not something you have to chase down and find TD Bank has $1.2 billion. The scammer, you might have to chase down all their bank accounts and real estate. The third parties cannot hide their assets; they have real estate and all the assets out in plain sight. Plus, many of these third parties have insurance. They have errors and omissions insurance and professional liability insurance. If it’s an accountant or attorney, they will have insurance policies that will immediately pay out if they’re discovered to have third-party liability.
If you are a victim of fraud, be sure to include the observation of what third parties may have liability that owes you money in your investigation, legal action, and research. Remember, we’re not attorneys, and we’re not giving you legal advice. This is something that a lot of our clients and attorneys will look at for their clients to make sure that they’re not left out in the dark and don’t miss out on all the money that’s coming to them, which they lost in a scam because some bank, accountant, or law firm didn’t do their due diligence and let that scammer get away with taking your money. They owe it to you to get it back.
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