ATTORNEY NEWSLETTER
Former IRS Agent Pleads Guilty To Fraud
Targeted Older Investors
Warning Signs Of Investment Fraud
Seniors are often targets of various kinds of investment fraud or securities fraud including Ponzi schemes, where money collected from new investors is used to pay existing investors, and there really is no actual investment of funds. Like the infamous Bernie Madoff case, investment fraud schemes like Ponzi schemes can go on for years until they finally collapse or are detected by law enforcement or perceptive investors. Fraud doers cover their tracks with fake statements, and distributions which are in fact the invested money of other, newer investors. Such investment fraud schemes violate securities laws and, when the victims are seniors, also constitute financial elder abuse and may involve other crimes, including federal and State prohibitions of securities fraud. See Penal Code § 368 and Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse). California broadly defines what constitutes financial elder abuse:
(a) “Financial abuse” of an elder or dependent adult occurs when a person or entity does any of the following:
(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.
(2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.
(3) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder or dependent adult by undue influence, as defined in Section 15610.70.
Cal. Welf. & Inst. Code § 15610.30.
Investment frauds like Ponzi schemes constitute wrongful takings of an elder’s money under the statute. Evans Law Firm, Inc. can represent you if you lose money in a Ponzi scheme or any other type of investment fraud or securities fraud or financial elder abuse in the San Francisco Bay Area. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Sentencing In Investment Fraud Case[1]
A Southern California woman was found guilty of defrauding an elderly woman of more than $1.5 million in an elaborate Ponzi scheme, authorities said. The defendant, a former Internal Revenue Service field agent who worked as a tax professional in the Los Angeles area, was charged with money laundering and financial elder abuse. The 73-year-old victim first alerted police in December 2020, saying she had believed she was investing in “lucrative high-yielding investment opportunities,” making 24 transfers to defendant between 2013 and 2019 totaling over $1.5 million. The victim took out a reverse mortgage on her home to keep investing with and eventually wound up more than $270,000 in debt, according to police.
The victim asked for her investments to be liquidated, but defendant’s “demeanor and communications” raised suspicions, and police were notified. In January 2021, detectives found evidence of the financial abuse after serving several search warrants at defendant’s home and place of business in Southern California. At the time, defendant, a former IRS field agent and IRS tax auditor, was working as an enrolled agent and tax return practitioner in Los Angeles.
Over the next year, detectives served more search warrants, audited financial records, and combed through mountains of evidence to uncover the victim’s financial loss. The investigation revealed other suspected victims, living in other cities. It’s suspected that defendant took in over $4.8 million from numerous victims over the course of the scheme, according to police.
“Red Flags” Of Ponzi Schemes
Here are some of the classic “red flags” of Ponzi schemes like the one involved in the reported case:
- High returns with little or no risk. Be especially suspicious of any “guaranteed” investment opportunity.
- Overly consistent/guaranteed returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.
- Unregistered investments. Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company’s management, products, services, and finances.
- Unlicensed sellers. Federal and state securities laws require investment professionals and firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.
- Issues with paperwork. Account statement errors may be a sign that funds are not being invested as promised.
- Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.
Contact Us
If you or a loved one has been the victim of a Ponzi scheme or other form of investment fraud or securities fraud or financial elder abuse in the San Francisco Bay Area contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).
[1] Evans Law Firm, Inc. was not involved in the case in any way.
