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Financial Fraud Interview
Old 01-17-2020, 06:30 PM   #1
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Financial Fraud Interview

Interview with Ben Carlson I found interesting:

https://www.thinkadvisor.com/2020/01...20200017132033


This really jumped out at me:


There are “six signs of financial fraud: When the money manager has custody of your assets; when there’s an aura of exclusivity in the pitch; when the strategy is too complicated to understand; and when the story is too good to be true,” you write. What’s the most glaring red flag?
The biggest one in terms of financial fraud is the custody of assets. That’s where people missed the boat with the Madoff scandal. Their assets weren’t held at a third-party bank or custodian. Madoff had control of the assets and was also making up the statements.
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Old 01-17-2020, 10:27 PM   #2
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Old 01-18-2020, 10:36 AM   #3
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In our area by far the two biggest reasons for financial fraud are..

1. Affinity fraud. Primarily faith based groups. Trust but no verify. Lambs to the slaughter. Huge losses-particularly with people in their mid/late 50's who have retirement nest eggs that have not done well in the recent past. They go anywhere from a $500M fraud by two former Pentacostal Pastors to the bankrupcy of the areas Lutheran Church Ass. and losses for seniors who invest on false pretences. Why on earth would people assume that these people knew anything about real estate/land investment yet they seemed to think because they were men of God that all would be well?

2. Incredibly unrealistic returns combined with the 'guaranteed' words. Why on earth would someone think that an investment that promises 15-30 percent returns be 'safe as houses'..like money in the bank.


You cannot fix stupid. Trust but verify.
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Old 01-18-2020, 12:20 PM   #4
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In our area by far the two biggest reasons for financial fraud are..

1. Affinity fraud. Primarily faith based groups. Trust but no verify. Lambs to the slaughter. Huge losses-particularly with people in their mid/late 50's who have retirement nest eggs that have not done well in the recent past. They go anywhere from a $500M fraud by two former Pentacostal Pastors to the bankrupcy of the areas Lutheran Church Ass. and losses for seniors who invest on false pretences. Why on earth would people assume that these people knew anything about real estate/land investment yet they seemed to think because they were men of God that all would be well?

2. Incredibly unrealistic returns combined with the 'guaranteed' words. Why on earth would someone think that an investment that promises 15-30 percent returns be 'safe as houses'..like money in the bank.


You cannot fix stupid. Trust but verify.
DW used to be quite active in the "elder" business including being an invited delegate to the White House Conference on Aging. The data she has says that the overwhelmingly most common financial abuse of elders is by relatives. This kind of abuse is substantially under-reported because the elder is ashamed and does not want to upset family relationships.

The schemes are wide ranging. Everything from pilferage and sale of valuable jewelry to using a legal power of attorney to raid the elder's assets. "Trust but verify" is a good mantra for any situation where one family member might be tempted by opportunity.
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Old 01-18-2020, 12:48 PM   #5
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DW used to be quite active in the "elder" business including being an invited delegate to the White House Conference on Aging. The data she has says that the overwhelmingly most common financial abuse of elders is by relatives. This kind of abuse is substantially under-reported because the elder is ashamed and does not want to upset family relationships.
Wow

That is really sad
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Old 01-18-2020, 05:28 PM   #6
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DW used to be quite active in the "elder" business including being an invited delegate to the White House Conference on Aging. The data she has says that the overwhelmingly most common financial abuse of elders is by relatives. This kind of abuse is substantially under-reported because the elder is ashamed and does not want to upset family relationships.
My own experience doing fraud investigations corroborates that. I often wondered how many I didn't know about because they were never reported.
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Old 01-18-2020, 09:15 PM   #7
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....Everything from pilferage and sale of valuable jewelry ...
When my great-aunt was moved into a nursing home, her POA was my aunt who lved over 1,000 miles away and as a result I got involved in her finances along with my aunt. Being a affluent single woman who appreciated such things, we knew that that my great-aunt had a lot of really nice jewelry pieces. However, according to her nephew, who lived near to her and was involved in her care until she went into the nursing home, the jewelry was all "missing"... my aunt and I suspect that they were missing in the nephew's wife's jewelry box.

Luckily, as it turned out when my aunt died by a fluke of luck we ended up with complete control of her finances and the evenutual settement of her estate. In her will she named certain female neices as heirs to certain pieces of jewelry (the missing)... since we had control, we paid money to each named heir in lieu of the missing jewelry and reduced the nephew's share of the residual estate accordingly. Payback's a bitch.
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Old 01-18-2020, 09:47 PM   #8
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Luckily, as it turned out when my aunt died by a fluke of luck we ended up with complete control of her finances and the evenutual settement of her estate. In her will she named certain female neices as heirs to certain pieces of jewelry (the missing)... since we had control, we paid money to each named heir in lieu of the missing jewelry and reduced the nephew's share of the residual estate accordingly. Payback's a bitch.

pb, that is absolutely beautiful!!!
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Old 01-19-2020, 10:03 AM   #9
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Originally Posted by pb4uski View Post
When my great-aunt was moved into a nursing home, her POA was my aunt who lved over 1,000 miles away and as a result I got involved in her finances along with my aunt. Being a affluent single woman who appreciated such things, we knew that that my great-aunt had a lot of really nice jewelry pieces. However, according to her nephew, who lived near to her and was involved in her care until she went into the nursing home, the jewelry was all "missing"... my aunt and I suspect that they were missing in the nephew's wife's jewelry box.

Luckily, as it turned out when my aunt died by a fluke of luck we ended up with complete control of her finances and the evenutual settement of her estate. In her will she named certain female neices as heirs to certain pieces of jewelry (the missing)... since we had control, we paid money to each named heir in lieu of the missing jewelry and reduced the nephew's share of the residual estate accordingly. Payback's a bitch.
did you use the appraised value or an estate sale estimate?
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Old 01-19-2020, 10:33 AM   #10
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Originally Posted by pb4uski View Post
When my great-aunt was moved into a nursing home, her POA was my aunt who lved over 1,000 miles away and as a result I got involved in her finances along with my aunt. Being a affluent single woman who appreciated such things, we knew that that my great-aunt had a lot of really nice jewelry pieces. However, according to her nephew, who lived near to her and was involved in her care until she went into the nursing home, the jewelry was all "missing"... my aunt and I suspect that they were missing in the nephew's wife's jewelry box.

Luckily, as it turned out when my aunt died by a fluke of luck we ended up with complete control of her finances and the evenutual settement of her estate. In her will she named certain female neices as heirs to certain pieces of jewelry (the missing)... since we had control, we paid money to each named heir in lieu of the missing jewelry and reduced the nephew's share of the residual estate accordingly. Payback's a bitch.
Great for you, very well played, very right!
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