In the harsh reality of scams, frauds, and Ponzi schemes, victims often find themselves grappling with the aftermath, seeking ways to recover what they lost. However, the primary fraudster, the one directly responsible for the scam, may only have limited funds to return. This discrepancy leads us to a crucial concept we’ve emphasized before—third-party liability.
Understanding the Shortfall in Recovery
When victims undergo an extensive asset search and asset recovery investigation, they may retrieve a portion of their lost funds, perhaps 40 to 60 cents on the dollar. However, a shortfall often persists. How is this gap addressed? In numerous fraud cases, the majority of recovered funds for victims stem from third parties—entities that, albeit indirectly, enabled the scam to unfold.
Identifying Third Parties: The Key to Holistic Recovery
Any comprehensive investigation into a scam must involve identifying the third parties that facilitated the fraudster, even unknowingly. These third parties could range from banks and attorneys to advertising or marketing companies. Employees who inadvertently aided the scammer’s activities also fall into this category. Unearthing the role of these third parties is a critical step in the pursuit of complete recovery.
A Case in Point: TD Bank and the $7 Billion Ponzi Scheme
A prime illustration of third-party liability involves a $7 billion Ponzi scheme where victims were left short of $1.2 billion. TD Bank, although not the direct perpetrator of the scam, had to pay a substantial sum. The bank had unwittingly assisted the fraudster by opening accounts for them. While TD Bank may not have been aware of the fraudulent activities, the incident underscores the importance of due diligence by third parties.
Third Party Liability: Banks, Attorneys, and More
Banks, as seen in the TD Bank case, are frequent third-party players. However, the scope extends to other entities like law firms, accountants, advertising companies, and any other collaborators that, knowingly or unknowingly, contributed to the success of the scam. Even if these third parties were not directly involved in the scam, any lapse in due diligence or oversight could make them liable for the losses incurred by victims.
Uncovering Third-Party Assets: A Visible Path to Recovery
Unlike the sometimes elusive primary fraudster, third parties are often more visible in terms of assets. Banks, law firms, and other organizations have tangible assets, including real estate and insurance policies. Many of these third parties carry errors and omissions insurance or professional liability insurance, ready to pay out in case of proven liability.
Incorporating Third-Party Liability in Legal Action
For victims seeking recourse, it’s imperative to include an examination of third-party liability in their investigation and legal action. Attorneys working on behalf of victims often scrutinize the roles played by these third parties to ensure that no avenue for recovery is left unexplored.
A Holistic Approach to Fraud Recovery
In the pursuit of justice and recovery from a scam, understanding and pursuing third-party liability can be the key to unlocking additional funds. While the primary fraudster may not have enough resources, third parties often do, and they may hold a degree of responsibility for the extended impact of the scam. Victims should collaborate with legal professionals to ensure a thorough investigation that leaves no stone unturned in the quest for comprehensive recovery.