EP06: Financial fraud via an astrology app?

Episode Notes

Transcript

Christine Byers:

Welcome to the Case Doctors. I’m your host, Christine Byers of Simon Law, and I’m joined by the case doctors, John Simon and Alvin Wolff. Now, between them, they have more than 80 years of experience as plaintiff’s attorneys, so there really isn’t a scenario that they haven’t already encountered on a case and figured out how to handle it or how not to handle it. Now they’re offering you the chance to tell them about the various problems or issues that are coming up in your cases and here how they would handle it. But first, let’s turn to some of the civil cases, making headlines and here what the case doctors have to say about them. We’re going to start with a Massachusetts man has alleged in a lawsuit filed in federal court that Wells Fargo intentionally concealed a trust fund account from him for decades. While he suffered years of financial instability, including homelessness, the client was supposed to start getting benefits from the trust fund when he turned 21 in 1995, but despite years of searching, he only learned where the account was held shortly after his grandmother died more than 25 years later. Again, do you think Wells Fargo has a chance here?

John Simon:

Well, I’m just thinking of all the interest that he’s earned on that money in the last 24 years. He might be in a better financial position today than he otherwise would’ve been.

Alvin Wolfe:

I’d want to know how much was in the corpus of the fund to begin with.

John Simon:

Yeah,

Alvin Wolfe:

Does it tell you that? I mean, if it was 10,000 bucks and he says he’s homeless because of that, I don’t think he’s got a very good case or 20 for that matter, or 30.

Christine Byers:

So it says here, the client’s grandparents first set up the trust fund in the 1970s, initially funding it with $25,000

Alvin Wolfe:

Probably got a decent sum in there. Well, in the eighties and nineties there were paying some pretty good interest.

John Simon:

Yeah, so you know what though? I still say he’s 21 and he’s homeless for the last 20 years. It sounds to me like if he would’ve gotten that money back when he was supposed to get it, probably all would’ve been gone pretty quick. I’m not condoning Wells Fargo’s conduct. I mean, we’re sort of making light of it, but I mean, if they didn’t give it to him, if they didn’t let him know that he had the trust money available, I mean, they’re kind of on the hook, right?

Alvin Wolfe:

Oh, I think so. But it sort of reminds me of the Big Lebowski when Lebowski was talking to Jeff Bridges and said, get a job, sir.

Christine Byers:

So he is now seeking damages under Massachusetts Consumer Protection Laws and the Federal Electronic Fund Transfer Act, as well as for breach of contract, breach of fiduciary duty conversion and unjust enrichment, some more allegations. The defendants also withdrew fees for holding the account, which plaintiff said is a similar practice to what ultimately led to a $3 billion B with a B settlement with regulators in 2020 over the bank’s alleged creation of accounts without customer’s knowledge.

John Simon:

I think 3 billion is a little bit high for him to be thinking about 3 billion in that case. Under those facts, little on the high

Alvin Wolfe:

End might be enough to get him a one bedroom apartment.

Christine Byers:

Another hot topic we have is the Google LLC and its YouTube subsidiary saying they have reached a settlement to resolve a long running proposed class action, accusing them of illegally collecting children’s data to generate targeted advertising after a California federal judge refused to release the companies from the dispute. Earlier this year, in the joint notice filed Friday, the parties informed the court that they had agreed to a class-wide settlement in principle to resolve the litigation being pressed on behalf of a group of children under 13 who have watched videos on YouTube and accused the video sharing platform and its parent of privacy and state consumer protection law violations through misappropriation of their data without parental consent.

John Simon:

I think that’s terrible, and I think they should get whacked. They’re using data from minors, they’re enticing the minors into the online to watch what they’re putting out there, and then they’re taking that data of who’s watching it, the kids, the minors, and then either selling that or using that in some other manner.

Alvin Wolfe:

Well, that would be under the parent’s account though. If you get on YouTube, aren’t you signing in under someone’s account? And it’s not likely that kids would have it. My grandchildren watch these YouTube videos like they’re mesmerized.

John Simon:

These companies have the ability to screen miners and they know when miners are using and getting online versus adults, and they have the technology to prevent that from happening. But here I think this is a little bit different because aren’t you saying that they took minor information and then what sold it or put it out there to benefit it from it in some way, some financial

Alvin Wolfe:

Way? Well, so what are they going to do? They’re going to watch a kid watching a Lego movie and sell it to Kellogg, so Kellogg’s will come after them and try to get ’em to buy sugar smacks

John Simon:

Or worse to other people who are searching for children online or something like that. I mean, who knows? I hope that there’s some, what’s it called?

Christine Byers:

Accountability.

John Simon:

Not just accountability, but some remedial measures that can be taken to prevent it. In other words, to have ’em stop doing what they’re doing or prevent it from happening in addition to the monetary payment.

Christine Byers:

All right, well, thank you gentlemen. Time now to turn to our email inbox for the cases our viewers have sent us for the case doctors to diagnose. Now, just so everyone knows, we are not going to reveal where these cases came from. We’re not going to name any names or firms to protect the confidentiality of these cases. Instead, the case doctors are going to focus on just the issue in each of them. So as they say, the case doctors will see you now. Alright, this one is to the case doctors. My client is suing a psychic for negligent misrepresentation after following stock market advice given during a live streamed seance, the psychic claim to channel Warren Buffett’s spirit, who is very much

John Simon:

Called that. Are you making this up?

Christine Byers:

All right, here we go. The psychic claimed to channel Warren Buffett’s spirit, who is still very much alive, by the way, leading to a catastrophic investment. Do you think I should approach this as a financial fraud via an astrology app, or how do I better argue the case despite the lack of a traditional fiduciary duty? There you go,

John Simon:

John. We need a sidekick to tell us how that one’s going to come out. I think you would use a Ouija board.

Alvin Wolfe:

I mean, a lot to unwrap on that. I guess it’s like getting bad advice from anybody. Anyone ever tell you go buy the stock and you buy and it goes straight

John Simon:

Down. Yeah.

Alvin Wolfe:

Yeah. Very rarely does it go up. Warren Buffet just retired, by the way, at 95.

Christine Byers:

He did

Alvin Wolfe:

95, and my Berkshire Hathaway stock has really been a good investment. Yeah, yeah, it has. And I’m not given stock advice today.

John Simon:

Did you know that the car that he drives is like 25 years old? He drives through the McDonald’s for breakfast in the morning, and he still lives in the house that he and his wife bought 50 years ago

Christine Byers:

In the 1970s

John Simon:

In Nebraska 60 years ago. Yep.

Christine Byers:

Fascinating guy.

John Simon:

Yeah. Yeah.

Christine Byers:

So here’s another one. Hi John and Alvin, I need your guidance on a sensitive issue. I recently finalized a settlement in one of my cases, but I did so before obtaining explicit consent from my client. I understand this may raise ethical and legal concerns, and I want to make sure I take the right next steps to address the situation properly. Have you ever encountered anything like this, or do you have thoughts on how best to proceed in terms of disclosure possible remedies and mitigating potential fallout?

Alvin Wolfe:

Let me ask you this. Do you ever send out a demand letter asking for policy limits?

John Simon:

Yes.

Alvin Wolfe:

Do you always ask permission from your client before you do that?

John Simon:

I would hope so.

Alvin Wolfe:

That’s an interesting question because if I have a case where I’m asking for a lot of money, I’m going to run that by my client. But let’s say there’s a case with a hundred thousand dollars policy. I don’t know if I necessarily ask for permission before I do it. I may do it first and then tell the client what I did, and they always say, okay,

John Simon:

So what I do is something close to that. But what I’ll do, especially if I know the attorney on the other side, and it’s a case where it’s a limits case, what I’ll do is I’ll confirm with them If you send me confirmation, there’s no more policy limits, the policy limits as represented, or I tell them I will recommend it to my client and I’m pretty sure they’re going to follow my recommendation, especially if there’s no more coverage. But I mean, the safest thing always is, is to get permission. Just, I don’t necessarily put it in writing. I talk to ’em. And even in the bigger cases with the numbers, I have a conversation with ’em all the time, but I don’t always put it in writing. But I really can’t remember a situation where I would make a formal demand for any amount of money without having, having talked about it with my client, but I don’t think that’s what this person’s already, that’s already done. They

Alvin Wolfe:

Settled the case and they didn’t have

John Simon:

Permission, right? Honesty is the best policy. Whatever happened, come clean. Talk to your client. If you got a good relationship with your client, if they trust you, if you did a good job for ’em, I think all of those things, all those things will help you get it resolved. But number one, be honest with your client. Talk to ’em. Say, Hey, look, there’s a policy limit. Here’s what it is, why you gave it, and you didn’t make that demand unless you thought it was a good demand for the case. And see, you got to tell ’em, I made the demand and it was accepted, and I didn’t get your consent. And I don’t know, Alvin, I’m kind of digging myself a hole here. What do you think? Don’t you need to tell him?

Alvin Wolfe:

I mean, so yesterday I had a situation where I told the client, I’m going to get your policy limits. And he said, okay, he’s 22 years old today. His mother calls me up. What are you doing? Yeah, no policy limits. What do we need? What do we need you for? Right? Right. And it’s like, okay, I always precipitate these demands though. If it’s going to be a policy limits case or I’m carving out the ability to not release the Missouri Tort Victims claim

John Simon:

Fund

Alvin Wolfe:

Because that has to be in the release. Because if you just sign a general release, you’re also releasing the fund. I think the guy that did this gets on his knees and begs for forgiveness. There’s no other way around it.

John Simon:

Yeah. The other thing too is you have to explain what the circumstances or the situation is about getting more. Is it a situation where the demand was the policy limits and based on the circumstances, that’s pretty much all the person’s ever going to get, but still, I am not helping him by telling him You need to clear it with your client ahead of time because he didn’t, obviously didn’t do that.

Christine Byers:

He skipped that step.

John Simon:

Yeah, skip that step. But whatever it is, anytime you did anything, whether it’s a mistake or did something without thinking whatever, always, always come clean and do it sooner rather than later. Yeah. Beg for forgiveness. I had one when I was very early in my career, and it was a family sad case that lost a family member. It was a wrongful death case, and there were some fairly high policy limits. We did a ton of work on the case. We filed it, took depositions, and we were at a mediation, and it was a situation where the policy limits the insurance was pretty much going to be it. There weren’t going to be any collection beyond insurance. And so we walked out of that mediation after a full day, not making a demand for the policy limits, and it wasn’t offered, but we didn’t make it.

And the mediator then, who I knew very well, called me and said, Hey, what’s going on? And I said, look, if you want to offer something, offer it because they’re just not going to let me make a policy limit to me. And so they offered something that was about 90% of the policy limits on the phone. So I took one at a time, called all of my clients, they were all adults and talked to them and said, I highly recommend this because there’s always risk. You’re going to have to try it. You’re not going to do anybody. You’re risking this amount of money. Tried to give ’em the best advice I could. And they all said no, because I’d call one of ’em and then they’d call each other before I talked to ’em. And by the time I got to the end of the line, they were like, ain’t happening.

We’re not going to do that, but we will take the policy limits. So I called the me eater back and said, they won’t do that, but they’ll take the policy limits 20 minutes later. He said, yep, you got it. Policy limits. So fast forward, we’re getting everybody together to go get it approved in my office. And one of the clients came out and said, Hey, you did a really good job on a case. We’re all happy that you did it and thankful, but we don’t think you should take a fee on the last last because we think we got that, not you. Okay.

Christine Byers:

Really.

John Simon:

And I got along with ’em great. And I started laughing and I said, well, let me ask you this. If they would not have paid that, okay, and we would’ve turned down 90% of the policy limit and we tried it and got half of that, would my fee still be the same? I said, we’re in this together. So anyway, I didn’t reduce my fee on the last portion, but I thought it was interesting. Hey, did a

Alvin Wolfe:

Nice try.

John Simon:

Yeah, that’s what I said. I said, nice try. But I said, we’re all either going up or down together. We’re all doing this together. But I think you’ll, he or she’s going to feel a whole lot better when they talk to their client, explain the situation, let their client think about it. And that’s the only thing I can think of.

Christine Byers:

Okay, gentlemen, that will do it for this episode of the Case Doctors. If you have a case that you would like the case doctors to dissect, send us an email at [email protected]. Once again, we will be keeping all names and cases confidential. Thank you for joining us, and we will see you next time on the Case Doctors.