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If you own a business and you have an employee embezzling from you, the last thing you want to do is call the police. Because the IRS swoops in and takes the assets of the embezzler, considering it to be income for which they haven't received taxes. Yes, that's f'd up, but it happens.
Likewise, the order of operations here is extremely crucial. If he's providing K1s, then it's likely he's committing fraud. But if they have him arrested as the first step, then it really narrows your options. Because, in truth, if this guy is bilking your parents, then he's bilking other people as well. Once he is arrested, then everybody comes for their money. Better for your parents to get their money back and THEN have him prosecuted.
So a boffo, ballcutter plaintiff attorney would be your best bet. By that I mean someone scary who will essentially perform the legal equivalent of burning down the guy's house and shooting his dog. Your dad isn't suing for compensatory damages here. He's suing for punitive damages. If he just sues for compensatory damages, the legal fees will be just enough to pay for the money that's recovered. Meanwhile, the guy who bilked your dad likely has assets in the form of a house, a car, and other fungible items. Go after those. I bet you this guy will settle out of court for the money he owes your dad, plus legal fees, and then some.
Once that happens, lower the boom before he steals from someone else.
Never do business with friends and family if you can possibly avoid it. You risk your money and your friendship at the same time.
Yes. This. Your parents want to be at the front of the line trying to get their money. They need get a lawsuit going fast.
If you own a business and you have an employee embezzling from you, the last resort is to call the police. Because the minute you do, the IRS swoops in and takes the assets of the embezzler, considering it to be income for which they haven't received taxes. Yes, that's f'd up, but it happens. This is essentially the same thing.
I'm not a lawyer, but I know someone who had a situation similar to this. And the order of operations is extremely crucial. If he's providing bogus K1s, then he's committing tax fraud. But if your folks have him arrested as the first step, then it really makes it hard to achieve the prime objective of reclaiming their money. Because, in truth, if this guy is bilking your parents, then he's bilking other people as well. Once he is arrested, then all the guy's clients come for their money, and they'll have to get in line behind the IRS. So it's infinitely better for your parents to get their money back and THEN have him prosecuted.
So a boffo, ballcutter plaintiff attorney would be your best bet. By that I mean don't mean some nice, reputable attorney with whom this clown rubs elbows in the Sunday buffet line at the country club. I mean someone with a reputation for ruthlessness. Someone whose letterhead will strike fear into anyone with a brain. Someone who will essentially perform the legal equivalent of burning down the guy's house and shooting his dog. We're talking the Huns riding into the village. The guy is ripping off your parents. The time to be nice is done.
Why? Because your dad can't just sue for compensatory damages here. If he just sues for compensatory damages in order to be made whole, the settlement might be just enough to pay the legal bills. Instead, he needs to be suing for punitive damages. We're talking Wehrmacht storming France kind of shock and awe. The guy who bilked your dad likely has assets in the form of a house, a car, and other fungible items. Go after those, right up to and including his grandchildren's college funds. Seek to ruin the guy and I bet you this guy will come to heel in a hurry, settling out of court for the money very quickly he owes your dad, plus legal fees, and then some. At that point, this guy will do anything, up to selling his kids in an opium den, to keep his name out of the papers. Your dad might actually come out ahead. It's still a long shot, but it's really the only one your parents have.
Once the settlement check clears the bank, lower the boom before he steals from someone else. Your settlement might preclude prosecution but, hey, the IRS has an anonymous tip line. And they pay commission. Once your parents have their money, the money of other people isn't your problem, sad to say.
One other thing. Never do business with friends and family if you can possibly avoid it. You risk your money and your friendship at the same time.
I agree with all of your logic here. Do whatever to get the money first and then go from there. My mom is so damned freaked out and scared, though, that she seems to believe calling the cops first will solve the problem. We are trying really hard to talk them out of that mindset, but they may go rogue, I don't know.
I agree with all of your logic here. Do whatever to get the money first and then go from there. My mom is so damned freaked out and scared, though, that she seems to believe calling the cops first will solve the problem. We are trying really hard to talk them out of that mindset, but they may go rogue, I don't know.
DO NOT CALL THE COPS. Doing so pretty much guarantees that your parents will never get a dime back. Or, best case scenario, have to wait years for resolution.
Instead, play to this guy's desire to keep out of jail. He will pretty much do anything to avoid legal hot water.
You need to be proactive here. I would have your attorney husband find out who the most ruthless bastard there is in town and make the call and negotiate the arrangement. And then drive over to your parents house with the guy with a plan of action. He'll tell them what's what in a hurry so that they don't do something stupid. But your parents aren't making rational decisions, so you need to make decisions for them.
Last edited by MinivanDriver; 05-02-2019 at 11:58 AM..
I'm guessing the money is gone. I'd have your parents hire an attorney now and have the attorney send a demand letter for repayment ASAP. Maybe even file an injunction to freeze this person's accounts. If there is any money left then you want to be sure to grab it before it's gone. I would call the police but I'd get an attorney to send a letter to this guy now. There is nothing to be gained by waiting.
I agree with this. Show the attorney all paperwork your parents have, if any, and have the attorney seize what he can now, before any others do the same thing.
A lawyer is going to ask for a sizeable retainer up front, and every hour is billable. This is not a contingency fee situation. But waste your time on this idea to figure out what I'm telling you if you want, it's your time.
I like the idea of a wellness check - if the cops have reason to suspect that this guy is either dead or in trouble, they can go in without a warrant. It's entirely possible he lost all of his and the father's money trading and offed himself.
A lawyer is going to ask for a sizeable retainer up front, and every hour is billable. This is not a contingency fee situation. But waste your time on this idea to figure out what I'm telling you if you want, it's your time.
I like the idea of a wellness check - if the cops have reason to suspect that this guy is either dead or in trouble, they can go in without a warrant. It's entirely possible he lost all of his and the father's money trading and offed himself.
The OP's husband is a lawyer. He knows how the game is played, so there's likely some room for negotiation. In fact, if the OP's hubby has a good relationship with a ballcutter, then a lot could be done on a favor basis. And plaintiff's attorneys often take compensation only if they win.
The OP's husband is a lawyer. He knows how the game is played, so there's likely some room for negotiation. In fact, if the OP's hubby has a good relationship with a ballcutter, then a lot could be done on a favor basis. And plaintiff's attorneys often take compensation only if they win.
First step is figuring out if he's still alive or hasn't left the country. After that, they need to figure out if he lost the money trading - because if he did, the father is OUT OF LUCK. He took the risk when he agreed to let the guy trade with his money, and there is absolutely no legal argument he has that will recoup it if it was lost trading.
Just trying to help, focus on the most important steps first before going guns blazing with an attorney and lawsuit.
First step is figuring out if he's still alive or hasn't left the country. After that, they need to figure out if he lost the money trading - because if he did, the father is OUT OF LUCK. He took the risk when he agreed to let the guy trade with his money, and there is absolutely no legal argument he has that will recoup it if it was lost trading.
Just trying to help, focus on the most important steps first before going guns blazing with an attorney and lawsuit.
Anything that doesn't involve hiring an attorney is temporizing. And time is what matters here. If the attorney feels that a welfare check is important, then so be it.
As far as your argument regarding no legal argument, you're wrong there. A court trustee managed to recover $13 billion for Bernard Madoff's victims. But the trick here is to get the money before it gets to that point, rather than wait for years.
Anything that doesn't involve hiring an attorney is temporizing. And time is what matters here. If the attorney feels that a welfare check is important, then so be it.
As far as your argument regarding no legal argument, you're wrong there. A court trustee managed to recover $13 billion for Bernard Madoff's victims. But the trick here is to get the money before it gets to that point, rather than wait for years.
Madoff ran a ponzi scheme, this is much different from a guy who tried to make money trading but failed and lost it. But the bigger issue is if he lost it trading, he's almost certain to be broke and judgement proof.
Madoff ran a ponzi scheme, this is much different from a guy who tried to make money trading but failed and lost it. But the bigger issue is if he lost it trading, he's almost certain to be broke and judgement proof.
The flaw in your logic is one of assuming that the guy was a legit trader. Madoff claimed to be a legit trader, too, providing similar documentation to his supposed clients. The fact that there is no documentation available for trades or transactions is a gigantic red flag. Again, a good attorney will get to the bottom of this PDQ. If he learns this money was lost in legit trades, oh well. But if he is indeed committing fraud as I suspect, then damn the torpedoes and full speed ahead. It is so important to move quickly in a situation like this.
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