Many of our fraud victim clients come to us late in the game; that is long after they have lost their money. Invariably there are several common themes and reasons for waiting so long.
First, most fraudsters continue to make promises of payments even though the investors’ money is long gone. For the fraudsters, the false promises are often based on some ridiculous hope that they can scam some new investors in order to generate enough funds to quiet the old ones. Sometimes the intent of the fraudster is more sinister – continuous promises of payment simply made to string along victims in the hopes that they give up or provide the fraudster more time to hide their ill-gotten gains.
For their part, most victims are ordinary people who want to believe in the basic goodness of people. They want to believe the promises made by the fraudster. They also don’t want to believe they were taken for a ride. We have represented lawyers, doctors, accountants and financial planners – many smart people are victims. There is an emotional loss that comes with realizing you were the victim of a fraud and for many, its easier to ignore the obvious than deal with that loss.
Victims also delay because they think the FBI or law enforcement will get back their money. Another bad assumption. The mission of law enforcement is to punish offenders. Although prosecutors will often seek restitution orders, those orders aren’t usually payable until the fraudster has served his prison sentence. By then there are few assets, if any, left and the employment prospects of convicted felons are usually quite limited. Prosecutors too have long moved on to the next case.
Finally, many victims of fraud are simply embarrassed to seek help.
All of this means that most folks delay before calling an asset recovery lawyer. Unfortunately every day you delay greatly reduces your chance of success. Hiring an inexperienced lawyer can make the problem worse. Often that means just tipping off the fraudster allowing him or her to better hide the money.
Case Study: Nicholas Cosmo + Agape World Ponzi
In the same year that Bernard Madoff became a household name a much bigger Ponzi scheme unraveled. Although Madoff’s case was the largest Ponzi scheme ever in terms of total dollars, almost all of his investors were very wealthy individuals. Nicholas Cosmo held a different record, his scheme had the largest number of victims. And unlike Bernie Madoff, most of his victims were not wealthy and could not afford to lose their money.
At its peak, Agape World had nearly 6,500 investors. Teachers, cops, judges and retirees. What they didn’t know was that founder Nicholas Cosmo was a convicted felon who had been jailed for another financial fraud a few years earlier. More than $400 million was raised throughout the course of the scheme, though after investor payouts court papers say more than 3,000 victims ended up losing a combined $179 million.
Cosmo’s two largest salesmen weren’t much better. Although not convicted criminals, one was a postal clerk and the other a surfer.
This week prosecutors sentenced Nicholas Cosmo, the con artist at the center of the Agape World Ponzi scheme that defrauded thousands of investors. Cosmo, who is 40, was sentenced to 25 years in prison. Even with good time, he wont be released until his early 60’s. At that time the court has ordered him to pay over $400,000,000 in restitution. The chances of him paying that are incredibly slim.
Why Hire an Asset Recovery Lawyer?
Many victims hope a court appointed receiver or prosecutor will get back their money. Sometimes that works… the trustee appointed in the Bernie Madoff case, Irving Picard, has collected hundreds of millions of dollars. Many receivers, however, don’t look for assets very well or don’t know where to look.
Then too are the receivers who are paid on an hourly rate and seem more interested in how much money they can make than how much the investors get back. This week David Quinones, executive director of the International Association for Asset Recovery*, wrote about Vantis PLC, the liquidator of alleged Ponzi schemer Allen Stanford’s empire. Vantis was terminated but not before racking up a bill of $18 million. How much did they collect for investors? A mere $300,000.
Delay never works to the advantage of the victim. It’s a simple truth that most victims don’t want to face. Even if a very aggressive receiver is appointed, its still good to have a seasoned asset recovery lawyer working for you to get back your hard earned money.
Even if the money is gone or spent, often we can hold third parties such as banks responsible for facilitating the fraudster.
If you have been the victim of a Ponzi scheme, bank fraud, investment fraud or other scam, contact the asset recovery lawyers at Mahany Law. Our attorneys have helped people across the United States get back their hard earned money. For more information, contact attorney Brian Mahany at online by email at or by phone at 202-800-9791.
All inquiries kept strictly confidential. Most cases can be handled on a contingency fee basis. We consider individual cases where the loss exceeds $1 million although we can often small cases as a class action. We consider cases on a nationwide basis.
* Ed. Note – The author, Brian Mahany, is a member of the advisory board for the International Association for Asset Recovery.