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Old 06-24-2014, 01:12 PM   #21
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I am right now looking at my Quicken screen: 27 26 accounts.

Schwab alone has 7 of our accounts (his/her IRA, Roth, Educational accts for children, etc...). There are other brokerages, including 3 accounts at Vanguard. There are a couple of MF accounts. Then, there are credit cards, Amex, Discover, B of A checking, etc... One click on Quicken and everything gets downloaded and updated.

The accounts that I have to log in manually each month include the Treasury Direct accounts, and an MM account at Ford Credit. My wife's 401K has to be logged in daily to get the funds' price. It's a pain that the latter has no Quicken access, and I have been debating for a while about doing an IRA rollover.

My wife keeps track of a couple of accounts by hand, such as the HSA and some credit cards she uses but I don't.
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Old 06-24-2014, 01:47 PM   #22
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Thanks for the information so far.

The current understanding is that this was set up as a bill pay. The perps did not set up any kind of online access.

So it sounds like anyone who knows your account number and your bank (e.g., anyone who has received a check from my friend over the last 20 years, in this case) can simply start paying their bills from his account. And there is no verification by the bank that names match, no trial deposits, etc.? The bank simply approves any and all incoming requests?

When I set up money transfers to/from my brokerage accounts there were two trial deposits of random amounts under $1.00 (there is only a 1 in 10,000 chance you can guess these) that had to be reported back before approval and the names had to match. But I don't recall doing any of that for a bill pay.
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Old 06-24-2014, 01:57 PM   #23
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When I set up money transfers to/from my brokerage accounts there were two trial deposits of random amounts under $1.00 (there is only a 1 in 10,000 chance you can guess these) that had to be reported back before approval and the names had to match...
I went through that trial deposit once to link my checking account with a brokerage account. Vanguard wanted more: a signature guarantee from B of A. I thought Vanguard was silly; I opened the account with them using a check from the same bank account.

Here's an interesting story. I once observed 2 small deposits into my checking account. While wondering what that was all about, I got a voice message on my phone recorder, asking to know the values of these small random deposits!!!

I reported this to the bank, and I did not know what they did with it. However, I am sure that some innocent naive people might just tell a stranger on the phone about the amounts, which then let them validate the link and steal all the money!!!
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Old 06-24-2014, 02:07 PM   #24
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Banks r regulated thru the state they r located in. The dept of the respective state has a complaint process. Friend needs to file a complaint about the bank.
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Old 06-24-2014, 02:29 PM   #25
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So far his actions have been:
* Notify bank to close account and went in to talk with them
* Make police report including documentation of each transaction
* He is sort of waiting for the bank to deliver to him the first 60 days of losses before getting aggressive about being made whole for the remainder
* He has a lawyer for his business who already has power of attorney so he can handle stuff when he is traveling -- but the lawyer is clueless about this kind of crime
* He has asked the bank to get as much information as they can about the destination accounts where the money went

What else should he do? Should he freeze his credit bureau accounts to prevent any access to his credit records?
Kramer, sorry for your friend's bad luck. He has little recourse, the law is clear here. Only consumer accounts are covered and the bank liability is 60 days from the date the monthly account statement was mailed. In fact, the bank is under no legal requirement to even investigate. The Electronic Funds Transfer Act is governing regulation (see here). Freezing his credit report won't help, but it also won't hurt. The police report may help.

He should not take a confrontational position with the bank. He needs them to investigate and provide him with details, pursue the possibility that some funds may be recovered. He will have time later to file a complaint.

If this is indeed bill pay, there is an audit trail to the payee's bank account and the payee's identity must have been established. It could be an error by the payee's bank that the payee exploited, if so, your friend can initiate funds recovery through his bank.

If the payee's account is bogus and it was fraud from day 1 it will be difficult to claim negligence because the account holder did not report it in a timely way. Still, it might help his case to file a complaint to the bank regulator (Comptroller of the Currency if it's a national bank).

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So can anyone start taking money out of your checking account and the only thing really stopping this is the customer looking over their statements? What sort of controls are normal for a bank? Does he have recourse here?
No, not anyone can withdraw from your account. Entities that have established themselves as legitimate businesses with the bank can attest to preauthorization and submit debits to your account. This is one way to set up automatic bill. If a payee does not have a relationship with the bank there usually needs to be some confirmation device that confirms to the bank the account holder authorization.
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Old 06-24-2014, 02:30 PM   #26
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Banks r regulated thru the state they r located in. The dept of the respective state has a complaint process.
Depending on their charter, banks can be regulated by either the state or the feds: The Banking System: Commercial Banking - How Banks Are Regulated | Investopedia
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Old 06-24-2014, 02:37 PM   #27
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So it sounds like anyone who knows your account number and your bank (e.g., anyone who has received a check from my friend over the last 20 years, in this case) can simply start paying their bills from his account. And there is no verification by the bank that names match, no trial deposits, etc.? The bank simply approves any and all incoming requests?
Apparently so at least at that bank. And yes your friend is on the hook for any transactions older than 60 days before he reported it to the bank.

While I doubt the FBI would take it (dollar amount too small) the local police should be able to deal with it just fine. Since where the money went is easily determined with subpoenas/court orders (depends on the state) it shouldn't be that hard. Because of the time it takes to get the information is measured in weeks these take from six weeks to several months to investigate, especially if "following the money trail" leads to other banks/financial institutions down the chain. I had one case open for eight months because of this but did nail the guy.

When I had cases like this (I used to do fraud investigation) my first question to the victim was this: "Are you willing to spend the time to come to court for this?" If they're not coming to court I immediately lost interest because if I can't put a warm body on the witness stand to say that he/she was harmed by this action then I don't have a case.

So if your friend expects the police to do anything about this, he has to be prepared to do his part - have good records and show up for court. Every time. If he misses a hearing chances are good the judge will grant a defense motion for dismissal.

Next, if the thief is convicted, the judge can, but is not required, to make restitution a part of sentencing. Sometimes they do, sometimes they don't. If not then your friend has a good civil case but as with any civil case collecting on the judgement is a different thing from being awarded a judgment. If the guy has a net worth of $2.87 there isn't much point in going after him.

Good luck to him.
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Old 06-24-2014, 03:44 PM   #28
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His bank has to know how the thief set up the auto-payment. And with the destination accounts known, it should not be hard to track down the thief.
Same thought I had, not too likely the thief was crediting some random accounts.

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I have a story you will find interesting. A few years ago, I was not able to get into a brokerage account one day...

What I eventually learned was that there was another account holder at that brokerage with my last name...

What I have learned is that a dumb clerk doing bad data entries can wreak havoc with modern computer-run financial systems.
This reminded me of a similar situation I ran into with a local credit union. I noted a withdrawal I knew was not mine (by checking my online account access) and called my local branch - and they said yes, it was. When I asked when and where they told me which branch, and I immediately understood what had happened. An individual with same first and last name as myself lives relatively nearby, they apparently had an account with same CU but did banking at a different branch and had made a cash withdrawal. The teller must have not bothered to check account numbers and simply stopped looking when finding a matching name on an account, which happened to be mine.

While on the phone, I stated where I was on that date and time, which was no where near that branch. Could hear some keystrokes being keyed in, followed by a few moments of silence that were quite telling, and then an apology coming from the person on the other end. In the minute or two it took me to log back into my account, all sign of that phantom withdrawal had vanished.
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Old 06-24-2014, 03:51 PM   #29
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Same thought I had, not too likely the thief was crediting some random accounts.



This reminded me of a similar situation I ran into with a local credit union. I noted a withdrawal I knew was not mine (by checking my online account access) and called my local branch - and they said yes, it was. When I asked when and where they told me which branch, and I immediately understood what had happened. An individual with same first and last name as myself lives relatively nearby, they apparently had an account with same CU but did banking at a different branch and had made a cash withdrawal. The teller must have not bothered to check account numbers and simply stopped looking when finding a matching name on an account, which happened to be mine.

While on the phone, I stated where I was on that date and time, which was no where near that branch. Could hear some keystrokes being keyed in, followed by a few moments of silence that were quite telling, and then an apology coming from the person on the other end. In the minute or two it took me to log back into my account, all sign of that phantom withdrawal had vanished.
That's an interesting story. I don't think it could happen at my bank, though. When I visit the teller I am required to insert my chip card into a reader and verify it with my PIN before the teller gets access to my account.
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Old 06-24-2014, 05:23 PM   #30
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Update: It was all done by one guy with a common sounding name, it is probably a false identity. The location is a large city about 250 miles away from my friend in the same state. The credit cards are the type given out to people with bad credit.

My friend cannot get more information due to privacy laws, but that is what the bank told him so far.

Police say it might be 4 to 6 months to get subpoena to get required information.
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Old 06-24-2014, 05:26 PM   #31
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The banks will cover losses for ~90 days. The rest you will have to recover in Civil court. It should be easy to track. You know who received the money.
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Old 06-24-2014, 09:31 PM   #32
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Apparently so at least at that bank. And yes your friend is on the hook for any transactions older than 60 days before he reported it to the bank.

While I doubt the FBI would take it (dollar amount too small) the local police should be able to deal with it just fine. Since where the money went is easily determined with subpoenas/court orders (depends on the state) it shouldn't be that hard. Because of the time it takes to get the information is measured in weeks these take from six weeks to several months to investigate, especially if "following the money trail" leads to other banks/financial institutions down the chain. I had one case open for eight months because of this but did nail the guy.

When I had cases like this (I used to do fraud investigation) my first question to the victim was this: "Are you willing to spend the time to come to court for this?" If they're not coming to court I immediately lost interest because if I can't put a warm body on the witness stand to say that he/she was harmed by this action then I don't have a case.

So if your friend expects the police to do anything about this, he has to be prepared to do his part - have good records and show up for court. Every time. If he misses a hearing chances are good the judge will grant a defense motion for dismissal.

Next, if the thief is convicted, the judge can, but is not required, to make restitution a part of sentencing. Sometimes they do, sometimes they don't. If not then your friend has a good civil case but as with any civil case collecting on the judgement is a different thing from being awarded a judgment. If the guy has a net worth of $2.87 there isn't much point in going after him.

Good luck to him.

Although I have never been a victim, I have an odd fascination with tv show "American Greed". The sentences handed out for ruining peoples lives makes my blood boil. And then like you mentioned, judgements never get dispensed to the aggrieved party. Stealing peoples money really fires me up. In my fantasy world the criminal unable to pay back would receive a public whipping he wouldn't forget. Yea, I know I was born a few centuries too late.


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Old 06-24-2014, 09:59 PM   #33
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In my fantasy world the criminal unable to pay back would receive a public whipping he wouldn't forget. Yea, I know I was born a few centuries too late...
Like the following photo shows? It's still happening...

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Old 06-24-2014, 10:34 PM   #34
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Like the following photo shows? It's still happening...




If that guy was the one who stole the $35,000 I say give an extra swing for me!


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Old 06-24-2014, 10:41 PM   #35
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Would the victim of the theft feel better if he is allowed to be the flogger?

How about "the flogging will continue until all the money is paid back"?
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Old 06-24-2014, 10:55 PM   #36
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Would the victim of the theft feel better if he is allowed to be the flogger?

How about "the flogging will continue until all the money is paid back"?

Personally I would leave it to the expert, but I would be there to witness the same yell I would have made after I found out my money was gone.


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Old 06-24-2014, 11:20 PM   #37
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I dunno. Some guys still willfully risk this flogging to get $35K, I am sure.

And if we increase the penalty with the loss, you will have to cane these thieving CEOs to death. White collar crimes cause really big losses. What do we do?
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Old 06-25-2014, 12:59 AM   #38
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...What else should he do? ...
He can probably take a casualty loss deduction on his taxes for any unrecovered losses.
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Old 06-25-2014, 02:38 AM   #39
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Regarding casualty loss, my understanding is that you can only deduct the portion above 10% of your MAGI. So he may not even be able to deduct any, or perhaps just a small amount. OK gotta get on my flight now . .

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Old 06-25-2014, 04:58 AM   #40
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Although I have never been a victim, I have an odd fascination with tv show "American Greed". The sentences handed out for ruining peoples lives makes my blood boil. And then like you mentioned, judgements never get dispensed to the aggrieved party. Stealing peoples money really fires me up. In my fantasy world the criminal unable to pay back would receive a public whipping he wouldn't forget. Yea, I know I was born a few centuries too late.


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I'm not as kind and forgiving as you. On something like this I'm probably more old testament. Stealing gets a hand removed. It only takes a couple of times before they would require voice recognition to continue and there is a solution for that too.

Cheers!
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