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We can help when your trustee has committed fraud

TRUSTEE FRAUD
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You may have met him at church. He attends regularly and always stays around after the service to chat. He’s even given free financial planning and investment seminars to the church’s Seniors Group. When you move all your investments to Bill, you do no due diligence or background check; you don’t even Google him. (It would be so awkward to ask for references because he’s a church member and everyone seems to know him.) You asked more questions of the contractor who remodeled your kitchen. Bill knows this, which is why he joined your church . . . and others.
Or perhaps you met him at a tax avoidance seminar, where he convinced you that by putting your assets in a “constitutional,” “pure,” “common law,” or “offshore” trust you wouldn’t have to pay taxes. Naturally, Bill is the trustee, and the trust is irrevocable. Most professional trustees take a 1-2% trustee fee; Bill takes 10%. After your house is titled in his name as trustee, Bill can borrow against your home and drain your equity.
Bill will allow you to participate in his “hedge fund,” which purportedly invests in small startup companies and various real estate ventures. He’ll promise fantastic returns, and provide financial statements and reports showing that your investment has exploded in value. If you ask to redeem your shares, Bill has a ready excuse for why he can’t do it—usually because your money is tied up in a big, lucrative investment that’s about to take off. He’s always on the lookout for new investors, and may offer you a finder’s fee if you have family or friends who might be interested.
If you or your children discover Bill’s fraud, you might assume that it’s a matter for the police. But when the police learn that you appointed Bill as trustee, and as your agent under a power of attorney, they will tell you it’s a civil matter. You’ll be forced to sue, and will be shocked to learn that Bill has been sued several times.
Bill will avoid your process server, so it will take several weeks or even months to start the lawsuit. He’ll file several motions before he answers your complaint. He’ll fail to answer your discovery requests, requiring your attorney to file serial motions to compel. He’ll fail to appear for his deposition. He’ll hire an attorney who he has used several times, then fire the attorney and represent himself. Then he’ll hire another attorney who will “need time to get up to speed.”
Bill’s objective is to make you spend so much money on the lawsuit that you will give up or accept a low settlement offer. This strategy has always worked for Bill.
Winning a judgment against Bill is only the beginning of the case, because the judgment is worthless if you can’t collect it, and Bill has been hiding his assets for years.
Years ago, Bill deeded his house to “Intrepid Investments.” Intrepid Investments, described as a “business trust organization,” then recorded a deed of trust against the property to secure a loan amounting to most of the house’s value. Intrepid Investments doesn’t exist. Bill put the name on title so it would be more difficult to find his assets. The loan is a sham to make it appear he has little equity in the property. If he has other assets, you may have to hire a private investigator to find them.
When your lawyers get too close to collecting on the judgment, Bill will declare bankruptcy even though you can’t discharge a fraud judgment in bankruptcy. Bill knows this; but he also knows that the bankruptcy judge may require your children to prove fraud again, this time in the bankruptcy court.
If Bill’s fraud comes to light before you die, you may feel so ashamed that you don’t tell your children or the police.
Are you or someone you know in a similar situation?
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6 ATTORNEYS READY TO HELP

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Loren Barr

Partner
Loren Barr specializes in estate and trust litigation, estate planning, and trust and estate administration.
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Gordon Young is a 25-year litigator who practices in securities, financial, and trust & estate...
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Heidi Imsand

ESTATE PLANNING & TRUST ADMINISTRATION
Heidi’s focus is Estates & Trusts, serving clients from Contra Costa, Alameda, Santa Clara, San...
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Donald J. Slater

TRUST & ESTATE LITIGATION
Donald’s focus is Trust & Estate Litigation, serving clients from Contra Costa, Alameda, Santa Clara,...
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David Monsour

SECURITIES LITIGATION & TRUST AND ESTATE LITIGATION
David practices in the areas of Securities Litigation and Trust and Estate Litigation.
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Graham D. Douds

TRUST & ESTATE LITIGATION
Graham’s focus is Trust & Estate Litigation, serving clients from Contra Costa, Alameda, Santa Clara,...
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