Our views on “triaging” your fraud case
To discover a fraud is to discover a breach of trust. Whether the fraud relates to investment matters, employment scenarios, conduct between business associates, or other forms of relationships, the emotional effects resulting from fraud may be significant. It is common for fraud victims to immediately react and contact the fraudster and demand the return of their funds and/or to contact the police. We suggest that fraud victims restrain themselves from these natural retributive inclinations. Rather, we suggest fraud victims consider the following checklist to “triage” their loss.
Checklist to “triage” loss due to fraud
1. contact a trusted friend or family member not connected in any way to the fraudster to review the scenario, to provide support, and to be a source of sound judgment;
2. preserve and organize documents relating to communications with the fraudster and to the transfers of money, together with any other evidence that is clearly relevant to the loss;
3. research or seek a reference for an appropriate civil fraud recovery lawyer or law firm;
4. have the appropriate response to the loss professionally assessed by a lawyer who will focus on recovery first and retribution second.
We recommend that fraud victims also consider the following issues.
Consideration No. 1 — Do Not Contact the Fraudster
Fraud, in its essence, is “theft by lies.” There are no persuasive reasons to believe that those who have lied in order to obtain money will later provide a straight answer when confronted with their lies. Rather, after having violated the trust of their victim, the tendency of fraudsters is to deny their wrongdoing and to offer a myriad of excuses, often blaming the victim for their own “misfortune.” Further, often fraudsters who realize that their scheme has been discovered will attempt to cover their tracks by deleting the electronic communications evidencing their fraud, as well as to transfer the fruits of their dishonesty out of the victim’s reach, and to otherwise destroy the record of their wrongful conduct.
Instead of confronting the fraudster, we suggest that fraud victims contact someone they trust such as a family member, a friend or a professional with whom they deal, in order to confirm the reasonableness of their beliefs that they have been defrauded, and to preserve and organize any electronic and paper documents relating to the fraud, and then research a lawyer whose law practice focuses on fraud recovery. Documents relating to the transfer of funds and representations made by the fraudster are most important. Organizing documents in chronological order assists in explaining the story to a lawyer and maybe later to police.
Consideration No. 2 — Do Not Contact Witnesses or Anyone Known to the Fraudster
If a victim immediately confronts the fraudster, they run the risk that the fraudster will destroy the evidence to support the case and will dissipate the funds the victim seeks to recover. If the victim contacts anyone who knows the fraudster, they run the risk that they will inadvertently or sometimes intentionally alert the fraudster, despite whatever assurances they give. It is best for fraud victims to have their case assessed by a lawyer to determine its strength before seeking to obtain further evidence held by the fraudster and/or by third parties. An element of surprise often enhances a fraud victim’s chances of recovery and of later seeking retribution.
Consideration No. 3 — Do Not Immediately Contact the Police
Many victims of fraud are inexperienced in dealing with the police and do not realize that the police are not well-equipped to recover their funds. If you contact the police before assessing your case with your own civil counsel, you assume the risk that the fraudster will be alerted to a potential criminal investigation and may then use the victim’s own money to retain criminal defense lawyers, or may simply transfer the victim’s money out of the jurisdiction and/or into the hands of accomplices. Stated otherwise, in most scenarios, the police are neither equipped to bring emergency motions to freeze the victim’s funds in the hands of the fraudsters, nor are they equipped to trace the funds into the hands of third parties. Freezing the funds in the possession of fraudsters and their accomplices is the most important factor in increasing the chances of obtaining a recovery. This reason alone should be sufficient to convince a victim to delay reporting the fraud to the police until such time as when a lawyer specializing in fraud litigation and asset recovery can evaluate the victim’s case. There are also numerous other issues to consider before contacting the police — see our blog: Should Fraud Victims Immediately Contact Police Upon Discovery of a Fraud?
Consideration No. 4 — Who is the Appropriate Fraud Lawyer for Your Case
Finding the right lawyer for a fraud case is not a “one size fits all” consideration. Fraud victims should consider the expertise and experience of the lawyers they are considering to handle their fraud recovery case, together with the rates the lawyers charge, and the types of retainers to which the lawyers are willing to agree. With respect to the rates the lawyers may charge, in addition to experience and expertise, this is often a function of the overhead that their firm carries and the number of lawyers and staff that are assigned to the file. With respect to the types of retainers into which lawyers are willing to enter, this is often a function of the willingness of the lawyer to share in the risk of recovery. For further information on considerations when selecting the appropriate fraud lawyer, see our blog: Considerations in Selecting Your Fraud Lawyer.
From the foregoing, it should be apparent that triaging your fraud loss involves the consideration of numerous issues. For further information, contact us at www.investigationcounsel.com.
Norman Groot, LLB, CFE, CFI