During the tax shelter years, individuals would invest in schemes to save money on federal income tax owed. As a result, scores of people lost money and became part of a con man’s “sucker list.” In early 2001, there was a fraud scheme in Las Vegas where sales personnel contacted victims on a “sucker list” to attempt to take more money from them. They would call people on this sucker list and advise them that they could recover the investment; all they needed was a small fee to cause it to take place. The small fee grew into larger fees and had no return on their investment. It became a significant and well-organized criminal effort. The perpetrators racked in millions from the victims on this sucker list. Before it was over, the FBI, IRS CI, and the DOJ investigated and prosecuted many of the executives involved in the scheme. Congress passed the Elder Justice Act as part of the Patient Protection and Affordable Care Act. The prison term for these defendants was enhanced by five years for taking advantage of senior citizens over 60 years.

When fast-forwarding to 2022, victims lose money to cryptocurrency, forex, and other investment schemes. There is a new generation of scammers, and they are internet scammers that are working with a crypto flare and creating their own “sucker list.”[1] These schemes promise a recovery, and after gaining the victim’s confidence, they request an advanced fee to defray their cost. Internet recovery schemes allow scammers to create fictitious websites, advertisements, press releases, and communications and to build confidence in the victim. They solicit the victim’s name, address, phone number, date of birth, Social Security number, and other personal information. The information is captured for future use, resale, and to create a “sucker list.”

To protect your clients if solicited, they should: [2]

  1. Not pay any money upfront.
  2. Research the website and look for the physical address of the recovery company on Google maps.
  3. Avoid communicating on WhatsApp and chatting online.
  4. Not provide their bank account information and not allow themselves to be pressured to make a decision.
  5. Always contact a trusted friend or banker before giving money or credit card information.
  6. Not use a debit card because the transaction cannot be reimbursed as readily as a credit card.
  7. Look for grammar and spelling errors in correspondence.
  8. Set up a separate email account if they consider a recovery company. Once they commit to their program, there will be other solicitations.
  9. Independently verify the source and content of notices received, and do not send any money or click on any links in the emails.
  10. They will be notified by mail, not email or telephone, if they are entitled to restitution from the court or an agency.

In this situation, your client’s best defense is to avoid using a recovery company. They generally cannot recover the money because the money and scammer are gone. They should call the FBI and local police and file a complaint. It will likely not generate an investigation, but you could be of value for a future investigation.

If your law firm requires a private investigator or forensic accountant regarding advanced fee solicitation for recovery of victim funds, please contact Chief Investigator Edmond Martin of Sage Investigations, LLC at 512-659-3179 as soon as possible, or email him at edmartin@sageinvestigations.com. We offer a free 20-minute consult. Visit our website at www.Sageinvestigations.ComClick to read about our team and their CVs.

[1] https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/RecoveryFrauds.html

[2] https://www.aging.senate.gov/imo/media/doc/Fraud%20Book%202021.pdf