Profile

Investor fraud is one of the most common financial crimes perpetrated against individuals and investor groups, primarily due to their failure to learn about the people and companies in which they are investing.

Quite often investors become aware of investment opportunities through family, friends or other connections. In such instances they often make the mistake of investing based on trust versus performing the type of due diligence they would normally carry out if the investment was in a person or company not known to them.

Judy Dun became involved in just such a situation, investing more than a quarter-million dollars of her savings into a small medical device company that was introduced to her by friends. Additionally, one of the principals in the company was actually known to her family, which gave her more confidence the company and investment opportunity were legitimate. Based on the connections, the wealthy lifestyle exhibited by the principals in the company (e.g., million dollar house, a Ferrari and a Porsche), and trust, she made the investment in the company in 2012, with the promise of a substantial fixed rate of interest and her principle returned within a year’s time.

As the year progressed it became clear the representations were untrue and she began to suspect she had been defrauded. At that point she brought suit against the company and the principals and eventually won a default judgment in excess of one million dollars. While the judgement was substantial, she quickly became aware that recovery would be difficult and was far from assured.

Challenge

Although she had won a judgement against the company and its principals, Dun realized she would need the services of a company that could assist her in actually enforcing the award – someone who could help identify and recover viable assets to satisfy the judgement.

Aside from obtaining the monetary award, she realized she had to find a better way to invest in the future or simply stop investing altogether. Doing so would leave her vulnerable to taxes and inflation that over time would deplete her savings – an unfavorable option.

Solution

Dun conducted a search of investigative companies seeking to identify a firm with a proven track record of providing cost effective judgement enforcement services. Beyond recovering her original investment and the punitive damages awarded by the court, she also hoped to find a company capable of helping her learn more about potential future investments so she could avoid being victimized again.

She became aware of PBAcheck through an associate. After talking with a member of the attorney-owned research and investigative-intelligence firm, she decided to engage the company based on a number of key criteria, including price and their ability to help enforce the court-awarded judgement to the fullest extent possible.

“I spoke at length with somebody at PBA and liked what they had to say about the way they handle enforcement investigations. I did look around some at other firms also,” she notes. “Overall, I liked the fact PBA posts their fees for each report. And their reports looked much more comprehensive than what I found on other sites. Especially the cut rate firms that provide cookie-cutter reports with little useful information in them.”

Once engaged, PBAcheck began its investigation into the company and the two principals, seeking information regarding litigation history, business and personal assets and liabilities, and overall financial standing. The investigation revealed a litany of issues, ranging from past investor fraud to regulatory actions (including revocation of license), numerous business and personal lawsuits, judgements, liens and high levels of debt far outstripping viable assets.  In fact, the fancy million dollar home was upside down and the Ferrari and Porsche that had been used to impress turned out not to be owned by the couple.

Results

Utilizing the services of PBAcheck, Dun was able to spend a relatively small amount of money to quickly determine the viability of ultimately obtaining a portion of the judgement. She knows the prospects are currently unfavorable, but now understands she can continue to check on the assets and activities of the people who defrauded her in a cost effective manner in the future. Doing so may eventually enable her to capture a more sizable portion of her court-awarded judgement in the future.

“I know it’s going to be a long, tough process to recover some portion of the judgement,” offers Dun. “But I still know that hiring PBA was a good decision. They’ve been honest with me and I believe they will help me eventually obtain as much of the award as possible.”

Equally important, Dun gained the benefit of learning more about due diligence in the investment process – verifying versus trusting. She feels confident that she can now invest and grow her assets without being vulnerable to people and companies intent on defrauding potential investors.

“An important lesson and benefit in all of this is the fact I recognize the importance of conducting thorough due diligence to protect myself in any investment scenario,” she says. “Instead of being victimized and walking away for good, I’ve learned I can utilize the tools and reports offered at PBAcheck to conduct proper due diligence. This is going to allow me to protect myself and invest with confidence and peace of mind from this point forward.”