Starting a Business Scammers using LLCs and Trusts to steal money

Redemptionman

Redemptionman

Active Member
Jurisdiction
Louisiana
I have a question regarding LLCs and unscrupulous owner operators who do bad business deals. (well good for them I guess) So, I am not sure how this scheme works per say, but lets an LLC owner has a million dollar home. The list this house under an residential address trust, the name of the trustee changes every year or so. I believe this trust operates at lets say 1-2 percent for the listed trusted agent and the house listed under it. The LLC owner has one company which already declared bankruptcy and dissolved due to multiple civil cases filled against the business. This person starts another business of course an LLC and proceeds to initiate another contract scamming another person out of $60k in cash for the purpose of building them a house. The work of course never gets completed and through information and belief the money went towards (LLC owners) his house. The people who were scammed of course will sue the LLC for breach and not completing the contract. Maybe some states would lock up LLC owners who did these type of contracts knowing they would never finish the job? I am not sure but it does look like a loop hole to protect a this scammers house which they couldn't afford to begin with. I think there is a whole network of these type of Trustee scams which protect houses and keep these idiots in them with short sales and by clouding the title in a ongoing spider web of decent and deception.

Personally, I know I research every person I do business with and will not transfer any money till I get an assurance that they will complete the job. I will also not do business with anyone who is not licensed and bonded. Is there any recourse? anyway to lock this person up? there is nothing truly free in this world and this is shady. What do you all feel like can be done or should be done for surely society pays when a persons hard owned money is scammed and the scammer lives high on the hog if you will.
 
Ok ignore the grammar issues, but does anyone know of way to pierce the veil if you will and hold a bad LLC actor personally liable or is this just a shady case of the law protecting unscrupulous activity in the name of new business creation?
 
adjusterjack said:
Yes, there is.

Numerous articles on piercing the LLC veil appear in this search result.

piercing the llc veil at DuckDuckGo
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this person is being sued personally so I am guessing that is what they are trying to do, but it is not easy. This person bankrupted one business to avoid a collection and I am sure he will declare personally to get out of doing this. Funny how scammers usually graduate to larger scams due to the fact they can not cover up all their lies.
 
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Redemptionman said:
What do you all feel like can be done or should be done for surely society pays when a persons hard owned money is scammed and the scammer lives high on the hog if you will.
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The persons who believe they were the victims of a scam may report it to the local police/sheriff department, report it to the state's consumer protection agency (which in some states is simply a division of the state attorney general's office) and to the Federal Trade Comission (FTC). There is no guarantee that any of these agencies will take action particularly as I've not seen the details of what occurred.

The victims may also sue the scammer and the LLC that he uses. The LLC limited liability won't protect an LLC owner from liability for fraud, so generally it would be a good idea to include in the complaint an allegation of fraud and the facts that support the fraud claim in addition to a claim to pierce the LLC liability shield. If the owner is found liable for fraud, he's personally liable for the damages that resulted from the fraud and in many states that amount is increased as a penalty, as much as three times the proven damages. A judgment for fraud also may not be discharged in bankruptcy. If they are going to do, they want to do it ASAP. That's because in general priority of payment on judgments in a forced sale is done based on the date the judgment was recorded. So the first one to get the judgment protected stands a better chance to get paid than the guy filing at the end of a long chain of judgments.

If they want a decent shot at getting their money back they'll likely need a lawyer to assist them. The scammers will take advantage of any opening or mistake that the victim makes, and if the victim goes pro se it'll be a lot harder for them to pin down the crook and shake the money out of him.
 
Tax Counsel said:
The persons who believe they were the victims of a scam may report it to the local police/sheriff department, report it to the state's consumer protection agency (which in some states is simply a division of the state attorney general's office) and to the Federal Trade Comission (FTC). There is no guarantee that any of these agencies will take action particularly as I've not seen the details of what occurred.

The victims may also sue the scammer and the LLC that he uses. The LLC limited liability won't protect an LLC owner from liability for fraud, so generally it would be a good idea to include in the complaint an allegation of fraud and the facts that support the fraud claim in addition to a claim to pierce the LLC liability shield. If the owner is found liable for fraud, he's personally liable for the damages that resulted from the fraud and in many states that amount is increased as a penalty, as much as three times the proven damages. A judgment for fraud also may not be discharged in bankruptcy. If they are going to do, they want to do it ASAP. That's because in general priority of payment on judgments in a forced sale is done based on the date the judgment was recorded. So the first one to get the judgment protected stands a better chance to get paid than the guy filing at the end of a long chain of judgments.

If they want a decent shot at getting their money back they'll likely need a lawyer to assist them. The scammers will take advantage of any opening or mistake that the victim makes, and if the victim goes pro se it'll be a lot harder for them to pin down the crook and shake the money out of him.
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Thank you for the reply, first off I doubt any of those agencies would do anything nor care. I reviewed the complaint and it states 3 counts. Mainly it is dealing with Breach of Contract and Unjust Enrichment. Not sure if any of those counts would allow for non discharge at bankruptcy. The main issue is the person has bankrupted his first company and depending on you else joins in I am not sure how he can or could hold on to assets. It looks to me to be a complete Ponzi scheme involving several individuals who evidentially would not be anyone you want to do business with.
 

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