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The Expert Podcast brings you firsthand narratives from experts across diverse industries, including private investigators, general contractors and builders, insurance agencies, vehicle specialists, lawyers, and many others.
So what is the fastest growing area of fraud that we see in our investigative agency? If you've been watching our channel for years, you've known that we've talked about Ponzi schemes, other types of corporate fraud, and embezzlement. But there's a new type that's popping up that, just in the last 12 to 18 months, is going through the roof. Now, before we go further, make sure that you know about our other two YouTube channels: we have ActualHuman.com YouTube channel and also one at Describe.tv. You'll see the links below, where we talk about many of these subjects in more detail. We have live events on a daily basis and large-scale interactive events where you can talk back and forth with the executives and the professionals. So make sure you check out those channels for our loyal viewers and subscribers. Go look at those and see if those are adventurous.
So, that being said, what's going on with fraud? The biggest and fastest growing area of fraud is what we call Family Law fraud. Now, remember, we're not attorneys; we're not giving you legal advice, but we're seeing cases skyrocket in two or three areas. If you are in any family that has any one of these events happening in it—someone going through a divorce, a death in the family, or the birth of a baby—keep these things in mind. Make sure you're aware of them and pass this along to people that you know that have one of these events.
What are these frauds in family law? First, we'll talk about probate fraud. But actually, let's talk about divorce fraud because that's an easier one to understand. You have two people fighting because they're breaking up, right? It's acrimonious, there's a lot of conflict, and they hate each other for one reason or another. They're both trying to get out of this divorce with as much money as possible, right? It's called settlement, division of assets, community property. There may be spousal maintenance, child support, alimony—all these things are being settled and negotiated. So, these parties don't care about each other; they are out for themselves.
What they do is they try to conceal or divert assets so they can get a bigger share of the pie than they are supposed to. Both parties do this, not just one. We look at 10 to 12 divorce asset cases a week, and in almost every single case, we find that both parties are actually trying to improperly divert money. You want to make sure that doesn't happen because it’s cheating you out of what's coming to you, what you deserve. You want to get a good asset search on that divorce case.
So how do they do it? Well, everything from hidden bank accounts. Many times, somebody in a divorce will know that they're going to start this divorce or be afraid of it, or be aware of it, many months or years in advance. So they may start this process years before. They may open up a hidden bank account that you don’t know about. They may put money into one of their relatives' names, or a friend's name, or a co-worker's. They may take assets and put them in somebody else's name or hide them—vehicles, real estate, corporate assets, business assets—they may hide those. Another way to do it, which is kind of sneaky, is they might overpay their taxes. They might write a check to the IRS, to the treasury, for more than what their tax bill is, or they might set up their withholdings on their payroll to actually put more money in their tax account.
If you overpay your taxes, at some point, you can either credit it to what you owe in the future, or just get a cash refund. We had one client who wasn't aware of any of this; they just thought there was hiding money in a bank account because there wasn’t enough money compared to what the other person was making. What we found is, we did a look at their withholdings on their paycheck, and it was too much money. They had actually told their employer to put an extra $800 a week in withholdings—that was $40,000 a year for two years. They had put into overpayment of taxes—$80,000 that they had overpaid their taxes, knowing full well that at some point they were going to get a divorce. And what they were planning on doing was, after the divorce, taking the $80,000 and saying, “Oh, my bad. I paid too much. Give it back and get cash.” If they owed some taxes, they would put it towards that. So make sure you get tax transcripts and look at those things.
Another way of doing it is by putting the money into some other form—cryptocurrency. It could be even things like casino chips. We've seen people go to the casino, buy a bunch of chips, gamble a little bit, but not all the chips, and then hide those casino chips. That can happen. Or buy things like Rolex watches or something you could resell. Now, that's a case where the people are fighting. You expect them to try to rip each other off. What about probate cases? How does that work?
Well, usually, what happens is somebody dies in a family—Grandpa Joe, 92 years old, God bless him, knock on wood, he dies, right? Okay. Well, Grandpa Joe has assets—real estate, bank accounts, insurance, maybe vehicles, maybe antiques, maybe corporate assets. Who knows what Grandpa Joe has? And that is willed or given to different heirs, different descendants, or maybe not even in the family. So, what happens is, as Grandpa Joe's getting older, maybe everybody knows in advance that he has dementia, maybe he's in a nursing home, maybe he's sick in hospice, or maybe he just dies suddenly. But at some point, when people realize that this person is going to die, they start to say, "Well, what's in it for me? How can I conceal these assets?"
Maybe they start writing checks from his bank account and put the money somewhere. Maybe they do a quit claim deed on a piece of real estate, a piece of hunting land that he had up in the woods that nobody will know about. Maybe they find an old antique car in a garage or a barn and then they put that somewhere, right? There are hundreds of ways to conceal assets in a probate. What's worse about this is these are people that like each other. So when you are a member of a family and are stealing money from that estate, you're essentially stealing it from the other living relatives that are still alive and that you should be respecting. You're going to see them at the family reunion, you're going to go to their wedding, right? These are your siblings, your cousins, your aunts, your uncles, and they're stealing money. They do it all the time.
So anytime there's a death in the family, it doesn't matter who the executor is; sometimes the executor is in on it. Get a good asset search and asset tracing. Get a good inventory of those assets to make sure that what's rightfully yours or even other people's go to them. Because here's the thing: if you let them get away with it, you are disrespecting the will of the person who died. A will is literally what you're talking about—it’s their will; they want this to happen, and a will is a document that evidences that. So if you are letting somebody get away with it, you're disrespecting that dead person's wishes, right? You don't want to do that. They lived a good life, and you want them to have whatever they wanted to happen after their death. So probate case, man—get asset searches. We're seeing hundreds of them.
The last one is, what about if there's a new baby, somebody gets born in a family? Well, you may not realize this, but when a person’s born, it creates an opportunity for what’s called a synthetic identity. There are scammers out there, sometimes within the family, that will use the identity of that baby to open up credit accounts, to get a social security number, to do things. What happens is, because a baby doesn't have any financial activity until they're maybe 12, 14, 16, depending upon how they live their life, there's nothing watching this, there's no observation of it. So if a family member or even someone outside the family knows this person is born, they say, "Hmm, what can I do?" They get a new social security number, they open accounts, they start running up credit.
Of course, if you're going to do something like this, you're not running up credit to get a good credit score. If you would do that, you'd do it on your own credit. They do this to ruin the credit. So now, this poor kid, at 16, wants to buy a car, or maybe co-sign on a loan, or get a credit card. At 18, they find out their credit's been trashed for the last 15 years. So if you have a new member of the family, maybe it's your kid, maybe you have a new baby as a couple or as a mother, the first thing you want to do is get a social security number, freeze the credit, lock the credit, and monitor it every year or two. Get a credit report on that social security number, get a credit profile. You can do all this for free through the credit bureaus. Credit freeze, credit lock—you can do all these things.
There are companies out there that will charge you a fee to monitor your credit. You probably don't need to do that if you do it yourself; it’s pretty much free. But definitely keep an eye on it because you hate to wake up 20 years down the road and have your son, your daughter, or somebody in your family realize that somebody took out a car loan and ruined their life 10 years before.