(Asset and Fraud Recovery Blog)
by Brian Mahany
Recently an unemployed woodsman from Washington state was convicted of nine federal offenses including blowing up his own mailbox (destruction of a mail box is a federal crime.) What was he doing? Trying to convince victims of a Ponzi scheme to give him money in exchange for information on where their assets were hidden. Information he never possessed.
While this crook was particularly inept, re-victimizing the victims of Ponzi schemes (commonly called “reloading”) is common.
Kevin Williams of Chehalis, Washington approached victims of an Atlanta based $90 million dollar Ponzi scheme. Posing as an investigator, he began contacting victims and their attorneys offering information about where the proceeds of the Ponzi scheme were hidden. When no one would pay him, he made a homemade bomb and blew up his own mailbox, apparently to show victims that the information he had was so valuable that the Ponzi scheme fraudsters were trying to kill him. That didn’t work either.
Finally, Williams sent threatening letters to the victims and was subsequently arrested when he showed up in Atlanta for the Ponzi scheme trial armed with explosives and guns.
Williams appears to be a fool and thankfully was caught before he hurt someone or collected any money. Not all victims are so lucky. I participated in a Ponzi scheme prosecution earlier this year in California in which a private investigator reloaded the victims and collected money from them by posing as federal agent. He was ultimately convicted earlier this year for conspiracy to falsely impersonate a federal law enforcement officer.
A girlfriend of the original fraudster apparently was also able to raise tens of thousands of dollars, allegedly to “help” the victims “recoup” their losses.
Although these stories sound bizarre, ask any lawyer or investigator familiar with Ponzi schemes and fraud cases and they will tell you that reloading is all to familiar.
In many cases, victims of these economic crimes have lost just about everything. A “white knight” that promises to help them get their money back sounds to good to be true – and it often is. We want to believe in the basic goodness of people and many victims cannot even begin to believe that a person offering to help them could also be a fraudster too.
If the reloader is successful, the victims are usually left completely broke at that point, too broke to hire counsel to pursue their losses. Psychologically, the victims are often too humiliated to report the crime and too traumatized to ever trust anyone again. When the real help does arrive, the victims have already lost all trust and will often fail to cooperate. I know of one victim this year who had to be hospitalized after suffering a complete mental breakdown from being reloaded.
Even more shocking, in some instances, the original criminal is behind the reloading effort. Why? He already knows the victims vulnerabilities and can use a third party to take whatever money they have left. It also insures that many victims will be too embarrassed to report the crime and have too little trust to seek help in recovering their loss.
Courts are finally beginning to take Ponzi schemes and economic frauds seriously. Perhaps those criminals that seek to take whatever crumbs are left should suffer even harsher treatment.
Brian Mahany is a lawyer concentrating in asset recovery and fraud recovery. He is also an advisory board member of the International Association for Asset Recovery. Brian has helped victims across the United States get back their hard earned money.
If you believe you have been the victim of a fraud or scam, do not be embarrassed to call. Today’s fraudsters are very sophisticated and you are certainly not alone. Our asset recovery lawyers can provide you a no obligation, no nonsense evaluation of your case. In many cases, we will handle your matter on a reduced fee or contingent fee basis.
Have questions? Call Brian Mahany at (414) 704-6731 or through the website, https://www.mahanyertl.com