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Author Topic: Johny Cee's Story Time  (Read 4752 times)
Johny Cee
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on: April 05, 2022, 04:12:38 PM

I need to tell this story, because I don't think there is anything I can do about and it is both ridiculous and crazy.   Sanitized for names and identifying information, but if the lawyers want to chime in with ways forward thats fine.  I have a client who is a Little Old Person, for reference we will call them Jack and he after "Jack and the Bean Stalk", though that is not their name and may or may not be their gender.

Set up:

1. Jack makes good money in retirement, and has a secure pension with pretty good Social Security.  Jack in their retirement likes to play around with investments.  Daytrading and investing in less well regulated things.  Jack ran into trouble with their spouse because Jack lost a bunch of money on an internet scam...  who could've known that an unregulated diamond trading "Magic Beans" scheme was fraudulent?

2. Just assume I am a clever tax accountant, and Johny Cee manages to score some money back for Jack by not too aggressive application of Tax Code and bootstraping this onto the Ponzi Loss acceptions ("One Neat Trick").  IRS was fine with it, though having a FBI case number and documentation on the fraud probably helped.

3. Jack's spouse finds out about Jack getting bilked for buying Magic Beans.  Divorce is in the works.

4. Johny Cee the next year gets spouses in the same room and reviews all financial matters and returns with both sides, makes sure Johny Cee isn't going to get fucked by Jack's propensity to throw money to shady people.

5. Jack calls Johny Cee later that year and asks about taking money out to invest in purchase Large Asset from Out of State ("Magic Beans v2").  Johny Cee maintains that he is not a financial advisor and he can not give advice on this.


Current Year:

Everything seemed super!  Jack and spouse are doing fine.  Jack is no longer losing money by day trading and penny stocks.  Return is easier, everything seems hunkey dory.

I had to open my mouth and ask about the Magic Beans v2.  Well, that didn't go through!  Jack kept his money!  Happy Days!  What's that? Oh no....

Jack had been talking to his buddy BOB who had been the one behind the Magic Beans v2 scheme...  Well BOB had also given him some great advice on hiding his assets because of the presumptive divorce and how BOB had seen friends lose everything in divorce cases....  so Jack had sold his portable assets of large value ("Cow") to BOB for a de minimus price and an oral promise to sell them back after divorce.  Well, unfortunately someone Ne'er do well had broken into BOB's garage where he had been storing that Cow and made off with the Cow!  Sorry Jack!  Your Cow is gone!  Jack asked if Johny Cee could use One Neat Trick to write off that loss too!

Johny Cee thought this all sounded suspiciously like some other things he had heard and asked about the identity of BOB, and surprise!  Johny Cee knew that BOB was actually Shady.BOB!  Shady.BOB is a flim-flam man, a crook, a conman. 

1. Jack had not gone to the police.  Well, he had actually signed a contract selling his COW for a fraction of its FMV... with the oral stipulation he could buy them back at the set price.  I asked Jack if he wanted to go to the police and admit that he was defrauded in his attempt to hide marital assets/defraud his spouse?

2. I told Jack he could consult an attorney, but any civil litigation runs afoul of his explaining how he was cheated of COW in his attempt to cheat his spouse of COW.

3. One Neat Trick only works if it was a documented investment scheme due to some statutes hanging around in the Revenue Code related to Ponzi/Financial Schemes.  Off the top of my head, those exceptions may have expired.... but also none of this is documented as an investment scheme and we don't have a fancy FBI letter and case number.


So yah. 

tldr:

Jack and Jill were having a rough patch due to Jack's propensity for buying Magic Beans.  Jack took legal advice from Shady.BOB and sold his favorite COW for not even Magic Beans, but pocket lint and a wink-wink to cheat that mean old Jill.  Jack and Jill mended some fences, and now Jack is now missing that COW that just walked out of the barn... so sad Shady.BOB has no idea how that happened.  Shady.BOB probably said that while still covered in blood from cutting up the COW for cheap steaks.

(Also, Jill may be of Eastern European extraction and 20+ years younger than Jack....)
______

I am wondering though, would Jack's attempt to hide the COW actually be fraud in the first place?  I mean, it's totally traceable and laughably obvious if the divorce had started and Jack would have been fucked...  but I'm not 100% sure it would have been fraud as I am not an attorney and fuck you ask your attorney I'm just an overworked accountant, shut up Jack shut up lalalalalalalalalalala.

Johny Cee
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Reply #1 on: April 05, 2022, 04:19:22 PM

Little known fact:

In my 20 years of practice, I have actually had to decode not one but TWO incoherent voice mails from clients who HAD JUST HAD FUCKING STROKES and instead of getting in an ambulance ASAP decided it was far more important to call me to explain why they had to cancel their upcoming tax appointments.  The first time, I was just worried and found out later what had happened.  The second time, I was like... I know that speech patterent...  oh shit this guy had a stroke why the fuck isn't he calling the fucking hospital.
Engels
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Reply #2 on: April 05, 2022, 05:11:27 PM

The potential for a successful comedy Netflix series is definitely here.

I should get back to nature, too.  You know, like going to a shop for groceries instead of the computer.  Maybe a condo in the woods that doesn't even have a health club or restaurant attached.  Buy a car with only two cup holders or something. -Signe

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Hawkbit
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Reply #3 on: April 05, 2022, 06:05:27 PM

By thread title alone I wanted this to be about a lawn dispute.
Khaldun
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Reply #4 on: April 05, 2022, 06:14:55 PM

[mixed up Jimbo and Johny Cee...entertaining stories all around]

I think there's a TON of stories out there like this one that nobody but Johny Cee et all are seeing.
« Last Edit: April 05, 2022, 06:21:13 PM by Khaldun »
Sky
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Reply #5 on: April 06, 2022, 09:18:21 AM

I worked with some con men in the 90s, kind of got forced into a bad situation (that I promptly got myself the fuck out of). The most ironic thing about most of them is that they were all the easiest marks in the world because they always thought they were the smartest guys in the room. Which was lucky for me, as that was my ticket out of said situation. One main guy got busted by the IRS a year later after fucking me over in a hard and particularly douchey way, so I was pretty happy with how it all turned out in the end.

In fact, almost everyone I've known who has considered themselves the smartest person in the room has ended up in legal trouble with the IRS.
TheWalrus
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Reply #6 on: April 06, 2022, 10:25:46 AM

Not a lawyer, but Jack needs to cede all decision making ability to Jill. Jesus.

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Trippy
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Reply #7 on: April 06, 2022, 10:36:16 AM

The divorce is still progressing, though, so that isn't an option anymore.
TheWalrus
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Reply #8 on: April 06, 2022, 10:38:53 AM

Sure it is.  why so serious?

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Johny Cee
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Reply #9 on: April 06, 2022, 11:43:47 AM

The divorce is still progressing, though, so that isn't an option anymore.


No.  Jack and Jill mended fences. 

I specifically asked Jack "So, we can try getting a consult with an attorney's office but if we push on this it is going to get out to your wife that you tried to hide marital assets"


Not a lawyer, but Jack needs to cede all decision making ability to Jill. Jesus.

I'm not saying Jill is a golddigger, but....  Russian that is 20+ years younger then Jack, da?  Someone else is trying to pluck her pigeon. 

Honestly, I wouldn't be surprised if Jack gets dumped in a home relatively soon.
TheWalrus
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Reply #10 on: April 06, 2022, 01:05:05 PM

Oh sure. Certainly not sayin there's a right side.

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Samwise
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Reply #11 on: April 06, 2022, 02:08:41 PM

If Jack doesn't get put in a home, he'll be on the street within ten years.  Clearly not capable of managing his own life any more.

"I have not actually recommended many games, and I'll go on the record here saying my track record is probably best in the industry." - schild
Johny Cee
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Reply #12 on: April 06, 2022, 03:22:03 PM

If Jack doesn't get put in a home, he'll be on the street within ten years.  Clearly not capable of managing his own life any more.

Nah.  Jack has a good pension and pretty high social security.  Jack is fine.
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Reply #13 on: April 06, 2022, 05:57:35 PM

Lots of people have that and still end up losing it all by being easy marks.

'Reality' is the only word in the language that should always be used in quotes.
Goumindong
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Reply #14 on: April 07, 2022, 06:49:34 PM


I am wondering though, would Jack's attempt to hide the COW actually be fraud in the first place?  I mean, it's totally traceable and laughably obvious if the divorce had started and Jack would have been fucked...  but I'm not 100% sure it would have been fraud as I am not an attorney and fuck you ask your attorney I'm just an overworked accountant, shut up Jack shut up lalalalalalalalalalala.

I am also not an attorney but yes; that is fraud.

Consider the non-shady version of this. You sell and have a repurchase agreement. The repurchase agreement has a value like any financial asset. It is, indeed, no different than an option. So if he is not carrying that option on his books at its listed value then he is defrauding whomever he lied about his asset value in order prevent them from receiving that money.

Consider ye olde mail fraud : https://www.law.cornell.edu/uscode/text/18/1341

Mail fraud is defined as such not because fraud is undefined but because the federal government needs a tie in in order to prosecute when a crime might have occurred over state lines without the person having done it ever actually crossing state lines or talking to someone in another state. You can think of it as "fraud but you used the mail". Fraud is still illegal, 'you used the mail' is just how they claim jurisdiction. If you do any of those things and don't use the mail its still fraud its just "only" fraud in the state it occurred in. And your client did.

While the mail fraud definition is fairly specific most times fraud is not specifically defined. Here is a note from the DoJ regarding a different kind of fraud (misappropriation of federal funds) https://www.justice.gov/archives/jm/criminal-resource-manual-1007-fraud. Which is not so strictly defined in the statute as mail fraud is.

So most likely your state is going to have a law on the books that either looks like the mail fraud law (relatively expansive and covers what your client did) or a law on the books like the federal funds fraud law (non specific but also definitely covering what your client did)

So does your clients action constitute fraud? Yea. Yea it does. You may have a reporting requirement regarding this in addition to this but i am not a lawyer and do not know the privilege relationship inherent in your profession. You may want to discuss with one to inquire about requirements you have regarding reporting the fraud. You almost certainly do not want to take any action that would help cover up the fraud or support a tax write off for the loss of the fraud without consulting a lawyer first because you could have exposure if you do that

edit: you should also talk to a lawyer because you may have exposure regardless because your client effectively told you he committed a crime
« Last Edit: April 07, 2022, 06:56:51 PM by Goumindong »
Abagadro
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Reply #15 on: April 07, 2022, 07:27:56 PM

"I am not a lawyer."

proceeds to make multiple legal conclusions

 Ohhhhh, I see.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

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Goumindong
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Reply #16 on: April 07, 2022, 07:53:25 PM

Sorry my disclaimer should have read. I have not passed the bar but I am familiar enough with the law to know that that is fraud in almost every English speaking nation on the planet, that you should talk with a lawyer before you do things that might be considered abetting that fraud and should also check with one regarding the legal and professional obligations you have as a tax preparer.
Abagadro
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Reply #17 on: April 07, 2022, 10:50:25 PM

Oh. Ooooooooooooooooh.  "Familiar."

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

-H.L. Mencken
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Reply #18 on: April 08, 2022, 06:36:14 AM

lol
Goumindong
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Reply #19 on: April 08, 2022, 10:17:38 PM

I don’t know what to tell you. Hiding assets by deception with intent to deprive someone of any portion of those assets is fraud.

Hiding assets in divorce is such common fraud that your locality probably has a law firm that specializes in finding it.
Abagadro
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Reply #20 on: April 08, 2022, 11:08:15 PM

Ya, they are called fucking divorce lawyers and there's.......no divorce here.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

-H.L. Mencken
Goumindong
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Reply #21 on: April 09, 2022, 06:16:02 PM

Ya, they are called fucking divorce lawyers and there's.......no divorce here.

Oh. Are you a lawyer now?

Typically if you attempt to break a law and then something prevents your scam from going through your behavior isn’t suddenly legal.
Rendakor
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Reply #22 on: April 09, 2022, 06:35:18 PM

 Popcorn

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Reply #23 on: April 09, 2022, 06:45:56 PM

Ya, they are called fucking divorce lawyers and there's.......no divorce here.

Oh. Are you a lawyer now?

Typically if you attempt to break a law and then something prevents your scam from going through your behavior isn’t suddenly legal.

this is incredible shit
Abagadro
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Reply #24 on: April 09, 2022, 06:55:20 PM

Ya, they are called fucking divorce lawyers and there's.......no divorce here.

Oh. Are you a lawyer now?

Uh, yes? For 26 years now (god I'm fucking old).

I've spent 100x more time on one single deposition chasing someone's assets through multiple corporations than you have spent on whatever google-fu bullshit you are relying on. 

I haven't even bothered to analyze this particular situation as there really aren't enough facts presented and throwing around legal opinions online is generally frowned upon, just pointing out how facile and stupid your comments are.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

-H.L. Mencken
Goumindong
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Reply #25 on: April 09, 2022, 08:35:29 PM

And you’re not familiar with fraud?

And you don’t think that a tax preparer who has had a client tell them that info that they should talk to one about their professional responsibilities?

U
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Reply #26 on: April 09, 2022, 08:46:28 PM

And you’re not familiar with fraud?

And you don’t think that a tax preparer who has had a client tell them that info that they should talk to one about their professional responsibilities?

U
hey fella

did you have a shitty day irl

this is astoundingly stupid, even for you
TheWalrus
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Reply #27 on: April 10, 2022, 12:18:43 AM

Well this has just been a gift. Really, well done.

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rattran
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Unreasonable


Reply #28 on: April 10, 2022, 06:47:44 AM

I'm not a lawyer, but I'm very familiar with being in a hole and continuing to dig deeper.
Abagadro
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Reply #29 on: April 10, 2022, 12:34:45 PM


"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

-H.L. Mencken
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