The Reality of Fraud Victim Recovery
You have heard us discuss numerous times previously about if you are a fraud victim, you’ve been defrauded out of your money, perhaps it was a crypto fraud, some type of an online investment fraud, that you want to look for third-party liability to help you recover any lost funds. Why do we say that? Well, in many cases, the fraudster, the fraudmer may not have all the money. They may have spent some, they may have hidden some.
Historical Examples of Third-Party Recovery
So in order to become whole, many large-scale frauds like the Bernie Madoff case, the Scott Rothstein case, Enron, all these cases have had money that has been recovered from third parties to help fulfill the losses of the victims. Who are these third parties? They could be banks, attorneys, they could be advertising companies, accountants.
How Foreign Fraudmers Exploit US Banking Systems
And this is a great article from ProPublica about how foreign fraudmers use US banks to fleece Americans. And this is exactly what it talks about. How these fraudsters, these fraud agents have to use US banks to do the frauds. Because of that, the bank is enabling them. They’re allowing them to do this. They may not be directly involved with the fraud, but they should know better because they see the activity.
Banking Regulations and Suspicious Activity Reports
In fact, there are requirements for financial institutions in the US to file what’s called an SAR, suspicious activity report for certain types of patterns. If you see a pattern on a bank account that doesn’t seem like it’s correct for that type of business, you’re supposed to file an SAR. In many cases, you’re supposed to notify your customer.
Banks’ Pattern Detection Capabilities
In fact, I’m sure that everybody watching this video has had a situation where you’ve gone to a store. You went online to buy something with your credit card and you’re buying, you know, let’s say a computer or some lawn furniture or something online or you go into Walmart and you buy want to buy a TV and you get a text message on your phone from your bank that says, “Hey, do you confirm this transaction? Do you recognize this transaction?” They’re asking you that because they’re detecting something that’s out of the norm for you as a consumer.
Inconsistent Application of Detection Systems
Maybe you never shopped there before. Maybe you never did that high of a transaction before. Whatever the case might be. So, they already, as we can see, are looking at patterns. So, why wouldn’t they be able to detect a fraud happening if you’re being defrauded? If they’re seeing one and not the other, that may create liability for them because they’re not applying their expertise equally. And that’s part of what the bullet points are.
Money Laundering and Unverified Accounts
Vent large-scale money laundering. Chinese fraudsters are renting US bank accounts to fraudmers who use accounts to move victims money. Bank of America allowed hundreds of unverified customers to open accounts, including 176 who claim the same home address as their location. It’s a big deal. So, you always want to look at third parties to see if there’s liability.
Case Study: New Jersey Fraud Victim
Here’s a case of somebody in New Jersey that was defrauded out of $130,000. And Chase Bank was used to collect the payment. And this is something that banks could see if they wanted to, but a lot of times they overlook. These fraudmers are opening false accounts and transporting cash from fraud victims. This is something where if you even accidentally do something that harms another person, there may be liability for that bank. You always want to look at it.
Legal Considerations and Investigation Approach
Again, it’s more of a legal question. We’re not attorneys, but when we do an investigation, we always look to see, are there potential third parties that you can look at that may have some liability or may have contributed to your losses. There’s a huge demand for bank accounts to use for fraud. Banks are now gatekeepers, a responsibility required by US law to prevent criminals from opening accounts or engaging in money laundering.
Bank Failures and Major Institution Involvement
Banks have consistently failed at that responsibility according to the article. So that could create liability and all the big banks are in this article. Bank of America, Chase, City Bank, HSBC, and the list goes on. The main law governing the banks is called the Bank Secrecy Act. It requires financial institutions to maintain programs to know their customers. That’s called KYC, know your customer, and to detect suspicious activity.
Red Flags Banks Should Notice
This might mean, as an example, noticing, keyword noticing that a newly opened account is suddenly receiving hundreds of thousands of dollars from wire payments. This is where you want to not be complacent. You want to look at your options. See where all the available resources are to get your money back so you don’t just give away your money to a fraudmer and never try to get it back.
