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Court To Scammer, "Give Up Your House Or Go To Jail"

kdawson posted more than 4 years ago | from the on-the-bright-side-the-rent's-free dept.

Government 152

coondoggie writes "Too many online scammers get away with what amounts to a wrist-slap, but a case if Las Vegas this week seems to be heading the right direction. According to the Federal Trade Commission, a business opportunity scammer has been held in contempt for the second time by a federal court and ordered to turn over the title of his home in Las Vegas or face jail time. The court found that the operator of the scam, Richard Neiswonger, failed to deliver marketable title to his home, in violation of a previous court order entering a $3.2 million judgment against him, the FTC stated. The FTC charged that the defendant deceived consumers with false promises that they could make a six-figure income by selling his 'asset protection services' to those seeking to hide their assets from potential lawsuits or creditors."

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152 comments

Haha! (5, Insightful)

Kalriath (849904) | more than 4 years ago | (#29509127)

Can anyone else see the irony in the seller of "asset protection services" to "hide assets from potential lawsuits" failing to hide his assets from potential lawyers?

Re:Haha! (-1, Troll)

FooAtWFU (699187) | more than 4 years ago | (#29509135)

No. Just you. You're special. (You can even ride the short bus if you'd like.)

Re:Haha! (-1, Troll)

Anonymous Coward | more than 4 years ago | (#29509215)

Hahahaha! Watch out, man. Those 'tards have gorilla-like strength and short-fuse tempers.

Re:Haha! (-1, Offtopic)

Anonymous Coward | more than 4 years ago | (#29509333)

hey i rode those becuase my thyroid problems made be a bit "touchy" those mother fuckers are good. they fucking let me use my cellphone on there. i actually carried and kept a portable hand sized tv on there to watch and such it was way better than the big crowded bus.

Not really... (5, Insightful)

schon (31600) | more than 4 years ago | (#29509189)

think about it - if his service actually worked, he wouldn't have been prosecuted for running a scam :)

Re:Not really... (5, Funny)

Anonymous Coward | more than 4 years ago | (#29509273)

Actually, this house is just a decoy. All of his real assets, being protected, are hidden.

Re:Not really... (1)

nurb432 (527695) | more than 4 years ago | (#29509277)

Sounds to me like he may have actually done it for his clients. So i agree, why is he being prosecuted?

Re:Not really... (1)

kramerd (1227006) | more than 4 years ago | (#29510077)

I hope you are kidding.

If you aren't, this was a scammer who had already been prosecuted, found guilty, and had not turned over the title to his home as ordered in a 3.2 M judgement. He was rightly prosecuted for contempt of court.

As for his original crime, he was prosecuted for hiding assets of clients, which is being an accessory to fraud. Last time I checked, knowingly helping someone to commit a crime is also a crime. If that is no longer true in the US, go ahead and show me the legal precedent so I know where to invest my money (obviously, in other countries, not in newly determined "legal" businesses).

Re:Not really... (2, Insightful)

mabhatter654 (561290) | more than 4 years ago | (#29511137)

why does the judge even need the Title. If a court orders it forfeit, can't they just issue something like a "court's lien" to the county department of deeds... the feds seem to do it all the time with no trouble.

Re:Not really... (3, Interesting)

timeOday (582209) | more than 4 years ago | (#29509381)

If his service actually works, his home in Las Vegas (which is probably underwater anyways) is just the tip of the iceberg, and most of his ill-gotten gains are hiding safely in Jamaica - which is distinctly possible.

Re:Not really... (5, Funny)

Moryath (553296) | more than 4 years ago | (#29509409)

Given the state of the housing market in California, isn't it equally possible that he simply doesn't have a title to the place at all?

Re:Not really... (0)

Anonymous Coward | more than 4 years ago | (#29509743)

Las Vegas is in Nevada, not California

Re:Not really... (1)

jedidiah (1196) | more than 4 years ago | (#29510959)

Las Vegas is effectively an outer suburb of LA. So it's easy to see where the mistake might be made.

It also suffers from many of the same problems including an absurd real estate bubble and corresponding crash (driven by many of the exact same speculators).

Re:Not really... (4, Funny)

UltraAyla (828879) | more than 4 years ago | (#29509765)

Hey, California has enough problems without you giving us Las Vegas!

Re:Not really... (2, Interesting)

mysidia (191772) | more than 4 years ago | (#29510153)

The ruling says he's required to deliver marketable title.

That explicitly means he is required to use all resources available to him to pay off any mortgages on the property and have any encumberances by other parties released, or face contempt.

It suggests the court believes he has the resources available, or some liens/encumberances on the property are created by organizations under his control.

IOW, Since he ran an asset-protection business, the court may believe he has intentionally structured ownership of the property in attempt to protect it from the court.

Well, the judge can definitely side against him in extreme cases like this one. Asset protection is okay, until you try and use it as a shield to break the law, at which points, the courts will pwn you.

Re:Not really... (1)

MrCrassic (994046) | more than 4 years ago | (#29511771)

If that's the case, then why is he playing hard-to-get with his LV home? The only thing I could think of is that it's a time suck to allow some other hidden process to complete...

Re:Haha! (1)

SCVirus (774240) | more than 4 years ago | (#29509265)

They only found his fake house. He is only putting up a fight to differ attention from his real, hidden properties.

Re:Haha! (1)

phoenixwade (997892) | more than 4 years ago | (#29509309)

First thought I had was that I was "Wow, the very definition of Irony"

Not Funny so no "Haha!" (1, Funny)

Anonymous Coward | more than 4 years ago | (#29509713)

It's deliberate irony, though, which is unfunny in the same way that explaining a joke makes the joke not be funny. The lose-your-big-assets sentence was almost certainly chosen because of what the scammer was advertising.

This isn't spontaneous enough to be "haha!" worthy.

Or to put it another way: this very post (explaining why it isn't funny) isn't funny, and if you reply to explain why you think it's still funny, the story gets even less funny.

Re:Haha! (0)

Anonymous Coward | more than 4 years ago | (#29509771)

Can anyone else see the irony in someone pointing out the painfully obvious being modded +eleventy insightful

Re:Haha! (1)

mysidia (191772) | more than 4 years ago | (#29510177)

The action was brought about by the FTC. No asset protection can really save you from the FTC, if they are of sufficient value, unless that asset protection includes you having your ass and your property in another country, in unmarked bills, or at least outside the hands of any US-based organizations that can be ordered to hand it over (by US courts).

He's going to need "asset" protection (-1, Offtopic)

Anonymous Coward | more than 4 years ago | (#29509143)

If you know what I mean.

He's going to be in need of "ass" protection (2, Insightful)

Lead Butthead (321013) | more than 4 years ago | (#29509431)

...once they ship his scamming ass off to Federal "pound-me-in-the-ass" prison.

Re:He's going to be in need of "ass" protection (0)

Anonymous Coward | more than 4 years ago | (#29509803)

Thanks, Captain Obvious, for that.

Re:He's going to be in need of "ass" protection (1)

SCVirus (774240) | more than 4 years ago | (#29510267)

Minimum security prison (white collar) == Kayaking club. Maximum security prison == ass rape.

Re:He's going to be in need of "ass" protection (1)

Foobar of Borg (690622) | more than 4 years ago | (#29510325)

I believe that was implicit in the use of quotes around the word asset. Are you, perchance, this gentleman [wikia.com] ?

WTF? (5, Insightful)

drew_92123 (213321) | more than 4 years ago | (#29509149)

Don't give him a choice, take everything AND put him in jail...

Re:WTF? (4, Insightful)

JCSoRocks (1142053) | more than 4 years ago | (#29509217)

That sounds better to me too. Punishing these people is a start but the reality is we need to do a better job of educating consumers. As long as there are suckers there will be people trying to scam them.

Re:WTF? (3, Insightful)

pha3r0 (1210530) | more than 4 years ago | (#29509963)

Educating consumers, I believe is a lost cause. Not for lack of effort mind you. In the words of the amazing Ron 'Tater Salad' White, "You can't fix stupid".

All we as a society can do is punish this guy (appropriately) and make sure we keep our laws up to date with technology.

Remember kids there is a sucker born every minute.

Re:WTF? (4, Funny)

Arthur Grumbine (1086397) | more than 4 years ago | (#29509985)

That sounds better to me too. Punishing these people is a start but the reality is we need to do a better job of educating consumers. As long as there are suckers there will be people trying to scam them.

Hear! Hear! In fact, I have just the cure-for-naivete/stupidity you're looking for... right here and for a limited time only I'm willing to offer you a secret extract derived the the lubricant glands of the rare pythonus imaginarius. This elixir has been known cure even the most obstinately held absurd beliefs, why just the other day it helped cure some poor fool who thought he could solve the problem of confidence men by "educating consumers" - God's honest truth - the poor bastard actually believed that!! Act now and receive, as my gift to you, a one-size fits all societal curative ideology! Don't pass this opportunity up!!

Re:WTF? (0)

Anonymous Coward | more than 4 years ago | (#29510535)

Holy Shit! I'll take TWO!!!

it should be middle and high school curriculum (0)

Anonymous Coward | more than 4 years ago | (#29510103)

scams and frauds, who is out to steal your money and how, don't do this at home

Re:it should be middle and high school curriculum (1)

cbiltcliffe (186293) | more than 4 years ago | (#29510923)

Ok...let's think this through....

If it was high school curriculum, then people would know by the time that they're 16 that scammers are out to rip them off.
If people knew that, then it's not much of a leap of logic to figure out by the time you're 20 that banks, governments and other corporations are out to rip you off, too.

And that is the last thing the ruling elite want you to know.

Re:WTF? (2, Insightful)

dgatwood (11270) | more than 4 years ago | (#29510335)

The problem is that as soon as you make a monetary system idiot-proof, nature goes and creates a better idiot.

Re:WTF? (1)

LBDobbs (555102) | more than 4 years ago | (#29511345)

As long as there are people there will be people who devise new scams and people who will fall for them. I've often said, "We need to educate {some group} about {some topic}" But I finally realized that, generally, adults don't tend to want to learn about stuff that doesn't have some immediate impact on their day to day lives. As an example, how often do we need to say, "Don't open unsolicited email" to have an impact of that method of malware distribution. Or as Will Turner said, "At least once more."

Re:WTF? (1)

Dan541 (1032000) | more than 4 years ago | (#29511987)

As long as there are suckers there will be people trying to scam them.

Hence, make scamming legal and the problem fixes it's self.

Re:WTF? (3, Insightful)

discojohnson (930368) | more than 4 years ago | (#29509369)

Tell that to his wife and kids. I'm not saying he doesn't get what he deserves, but let's not operate in a vacuum.

Re:WTF? (1, Funny)

Anonymous Coward | more than 4 years ago | (#29509417)

Put them in jail too. Make up some shit about them being accomplices.

Re:WTF? (1)

stonedcat (80201) | more than 4 years ago | (#29509555)

Hey get RIAA on board, they're fantastic at this sort of thing.

Re:WTF? (3, Insightful)

Dan541 (1032000) | more than 4 years ago | (#29511997)

Well they are profiting from crime.

Re:WTF? (0)

Anonymous Coward | more than 4 years ago | (#29509525)

Lets not. Remember evolution? Such a result favors his spawn over the spawn of others. And increases the survivability that woman, who selected him as a mate, over other potential child bearers. Repetition would likely yield an adaptation to that effect. Although, it would be much more likely to show up socially long before it would show up genetically.

Re:WTF? (0)

Anonymous Coward | more than 4 years ago | (#29512233)

Yet another retard purposefully misunderstands evolution. You idiots give creationists a good name.

Re:WTF? (1)

MMC Monster (602931) | more than 4 years ago | (#29509975)

No one's suggesting we throw them out an air lock. Hell, it's really not worth sending them up to space, even if it is to send a message to other scammers.

Perfect Punishment for Hackers too! (0)

Anonymous Coward | more than 4 years ago | (#29509791)

I think this should be done to people who copy music, hack into other's computers ..... !

Re:Perfect Punishment for Hackers too! (1)

Dan541 (1032000) | more than 4 years ago | (#29512013)

Copying Music doesn't hurt anyone. Don't download ringtones and your virus problems will be solved.

Re:WTF? (1)

antic (29198) | more than 4 years ago | (#29510031)

And get the news out in the mainstream press and in the right channels where opportunists will see it (IRC, forums, etc). Would spammers take the risks they do if the penalties were higher and more common?

Re:WTF? (0, Troll)

Dan541 (1032000) | more than 4 years ago | (#29511983)

Scamming should be legalised, that way it would eliminate it's self. If stupid people are poor people the scammers have not victims and may do something more constructive with their time. Scammers are more intelligent than their victims (obviously) so it is a waste to have them scamming when they might otherwise benefit society.

Absolutely... (1, Interesting)

mkdx (1314471) | more than 4 years ago | (#29509199)

Take the house and put him in jail... Actually, Waterboard him too.

Re:Absolutely... (0)

Anonymous Coward | more than 4 years ago | (#29509255)

Actually, that is what should have been done to the officials of the various business that have been "bailed out"... this guy is small fry in comparison.

The whole US economy is a big scam.

Re:Absolutely... (1)

Rip Dick (1207150) | more than 4 years ago | (#29509661)

All of civilization has always been a scam. It works because everyone plays along.

Re:Absolutely... (2, Informative)

e9th (652576) | more than 4 years ago | (#29509773)

Hey, it could still happen. The judge in the case, Stephen Limbaugh, Jr, is Rush's [rushlimbaugh.com] cousin.

My scheme really works!!! (0)

Anonymous Coward | more than 4 years ago | (#29509221)

"The FTC charged that the defendant deceived consumers with false promises that they could make a six-figure income by selling his 'asset protection services' to those seeking to hide their assets from potential lawsuits or creditors."

Of course, you might have to spend time in jail instead of losing your assets ...

Re:My scheme really works!!! (3, Informative)

Nadaka (224565) | more than 4 years ago | (#29509297)

problem. This is contempt of court. He stays in jail until he complies. Contempt of court is the only thing that can legally get you sent to jail indefinitely without a jury trial in the US.

Re:My scheme really works!!! (3, Informative)

MarkvW (1037596) | more than 4 years ago | (#29509467)

Civil contempt means that the person who is locked up holds the keys to the jailhouse doors in his or her own hands. Comply and be freed. Stay defiant and stay locked up. If you don't like it, you can appeal.

Courts wouldn't work without civil contempt sanction.

Re:My scheme really works!!! (1)

Fanro (130986) | more than 4 years ago | (#29509571)

Civil contempt means that the person who is locked up holds the keys to the jailhouse doors in his or her own hands. Comply and be freed. Stay defiant and stay locked up. If you don't like it, you can appeal.

And if the person does not actually "posses the keys", sucks to be him. good luck proving that you honsetly do not know the password, that the money is really gone, etc.

Courts wouldn't work without civil contempt sanction.

Countries without civil contempt sanctions would beg to differ.

Re:My scheme really works!!! (1)

wvmarle (1070040) | more than 4 years ago | (#29511891)

And if the person does not actually "posses the keys", sucks to be him. good luck proving that you honsetly do not know the password, that the money is really gone, etc.

Proving money is really gone is not too hard: just give full (and I mean full) disclosure of assets and transactions. The courts will have the proof that certain money transactions went your way (that's why they can recover that - one way or another it's proven you got it). It is your responsibility for tax reasons to keep your financial administration for a certain period of time (no idea on the actual period in the USA) and certainly banks will keep records of transactions in and out of your accounts. Then you can explain each transaction to the courts, and tell them where the money has gone. You may also have to give disclosure of overseas accounts of course.

Re:My scheme really works!!! (1)

Chaos Incarnate (772793) | more than 4 years ago | (#29509589)

They'd work just fine if the contempt sanctions had civilian oversight (aka a jury). As-is, the judges have all the power and no oversight, biasing the court system in their favor.

Re:My scheme really works!!! (1)

wronskyMan (676763) | more than 4 years ago | (#29510235)

The punishment for contempt would still work if it included a jury trial like any other crime - disobey a cop/interfere with an investigation and get locked up for 6 months (for example) after proper criminal proceedings. In the same way, once proven that you disobeyed a valid court order, you would be charged with contempt of court and locked up for 6 months. In some situations, this can encourage more serious crimes. For example, someone ordered to reveal if they had any other assets, could (1. refuse to answer and be thrown in prison indefinitely) or (2. perjure themselves and receive a maximum sentence of 5 years (assuming US federal code)).

Re:My scheme really works!!! (1)

wvmarle (1070040) | more than 4 years ago | (#29511937)

or (3. show the court what happened to their income, and that they have given full disclosure of their assets). To be thrown in jail for not disclosing assets means that the court has certain proof that there must be certain undisclosed assets present. E.g. someone has been proven to have received illegal income of say a couple million dollars, but only discloses half a million worth of assets. What happened to the rest?

I can not imagine that there is a way for the court to put someone in jail without having any proof. Even in the USA where it is all so messed up. But what I hear coming out of that place is that the COURTS and JUDGES are still doing their job pretty well - it is the GOVERNMENT and POLICE (and related agencies like FBI/CIA/whatever) that lost their integrity by faking proof, torture, extrajudiciary imprisonment (Gitmo, secret CIA prisons).

Re:My scheme really works!!! (1)

mabhatter654 (561290) | more than 4 years ago | (#29511357)

exactly, the idea of contempt is that you are holding up the court from making fair judgment.... so the court will wait for you to do your duty... you'll have nothing better to do.

That's one other thing about US courts is that it's your Legal DUTY to provide the information the court needs. While you can't testify against yourself in CRIMINAL cases, that's exceedingly narrow in that testifying and something "very bad" happening because of it isn't really the court's problem. In this case he was ordered to produce ownership documents, he's already convicted of a crime and sentenced to turn over fines and fees.... now he's attempting to "hide" them from the court, so they will wait for him to cough up the documents per his sentence....THEN he can finish being sentenced to whatever prison time he'll be getting (contempt doesn't count!)

news flash, "conservative" cases use contempt just as much as "liberal" ones do... several of Clinton's aides sat in jail for contempt for years because they wouldn't parrot what the prosecution wanted to hear in the various cases against him.

In the US system Contempt is one of the few "absolute" powers that judges have. It's the only thing they have when they play referee in that they can make ANYBODY appearing in their court sit for contempt... juries, DAs, witnesses, defendants, etc. It's their only way to really get somebody's attention.

In Jail without trial [Re:My scheme really works!! (4, Informative)

Geoffrey.landis (926948) | more than 4 years ago | (#29509613)

Contempt of court is the only thing that can legally get you sent to jail indefinitely without a jury trial in the US.

No, in fact, the (former) president of the United States stated that if you are suspected of terrorism, you can be held without charge indefinitely, without access to a lawyer, and without any right to challenge the fact that you were so designated (or even to see any of the evidence used to designate you a terrorist.)

For example, Jose Padilla was a U.S. Citizen, picked up on U.S. territory, and put into solitary confinement without being allowed to see talk to a lawyer and without any charges against him. On September 9, 2005, a three-judge panel of the Fourth Circuit ruled that President Bush indeed has the authority to detain Padilla without charges, in an opinion written by judge J. Michael Luttig.

So, no, contempt of court is not the only thing that can legally get you sent to jail indefinitely without a jury trial in the US.

Proposed Ammendment to the Constitution (1)

istartedi (132515) | more than 4 years ago | (#29509769)

I hereby propose to resolve this problem by an ammendment to the Constitution, to read as follows:

XXVIII. We really mean it.

Re:Proposed Ammendment to the Constitution (0)

Anonymous Coward | more than 4 years ago | (#29509883)

I hereby propose to resolve this problem by an ammendment to the Constitution, to read as follows:

XXVIII. Wherefore, we really mean it, you fuckers.

There, that's better.

Re:In Jail without trial [Re:My scheme really work (1)

Minwee (522556) | more than 4 years ago | (#29510281)

For example, Jose Padilla was a U.S. Citizen, picked up on U.S. territory, and put into solitary confinement without being allowed to see talk to a lawyer and without any charges against him.

But... but he was a bad guy! He kicked his dog, peed on the American flag, tore the tag off of his mattress, returned his DVDs without rewinding them, did not have his pet spayed or neutered, only looked one way before crossing, and was personally at the controls of both planes that crashed into the World Trade Center. The President said so, and he has... um... papal infallibility or something like that. It's in the Constimutution.

There's an ammendamament about it too. Part of it was scribbled in the margin and only seems to appear on the original copy in Raleigh, but I'm sure it's still legal.

"All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws unless they're, like, all bad guys or French or something and we all know it. Then the, you know, states can hit them with sticks and pour tea up their noses and that's still cool. Seriously."

Re:In Jail without trial [Re:My scheme really work (2, Informative)

_Sharp'r_ (649297) | more than 4 years ago | (#29510389)

the (former) president of the United States

Good thing the current President has changed all that [wsj.com] ...
(Note: First news link I saw when I Googled it. I'm sure there are plenty better ones out there.)

Re:In Jail without trial [Re:My scheme really work (1)

Geoffrey.landis (926948) | more than 4 years ago | (#29511177)

Good thing the current President has changed all that [wsj.com] ...

Well, that's the interesting thing of it. You give one president arbitrary powers, because you trust him to not misuse them, and, you know, you discover that the next president takes those powers, too. And the next. So you have to trust all of them not to misuse them.

Well, it's all perfectly legal. All that stuff about being innocent until proven guilty, constitutional rights-- that's obsolete. The courts said so-- if somebody says the word "terrorism," that word erases any of your so-called "rights".

Re:My scheme really works!!! (1)

kramerd (1227006) | more than 4 years ago | (#29510099)

He already lost a trial, was ordered to turn over the title to his house as part of a 3.2 M judgement, and then was found to be in contempt for not doing so. Indefinite jail time sounds reasonable to me in this circumstance.

Re:My scheme really works!!! (1)

wvmarle (1070040) | more than 4 years ago | (#29511855)

It also means that clearly there has been a court case that defendant lost. The locking-up part is merely a way of enforcing a court order.

It's about time (1)

vehicle tracking (1357065) | more than 4 years ago | (#29509251)

I hope the government has a plan to build more jails because they will fill up fast with these fools. These guys are really taking advantage of the situation right now with a lot of people out of work.

Re:It's about time (1)

TechnologyResource (1638031) | more than 4 years ago | (#29509515)

Well, there has to be a better solution than jail, depending on the seriousness. But, you're right, this problem is getting worse. Just look on Craigslist and job sites. There are more scams than real jobs. Something has to be done to stop it.

It doesn't say if the scammees get their money. (5, Insightful)

NoYob (1630681) | more than 4 years ago | (#29509253)

What's going to happen? The scammer asshole coughs up his assets to the Government and does any of that money go to reimbursing the victims? I doubt it. The victims would have to file suit against this low life and get what? Nothing because the Feds took it all.

What I tell friends and family and anyone who wants to listen: consider all unsolicited emails as scams. The same for telemarketers - if you're on the DNC list, then those people are breaking the law by calling you which makes them criminals. You don't want to do business with criminals, do you?

Junk mail a lot (too many) of times are crooks too - you know the "checks" that come in the mail for you to deposit and send money via Western Union to others.

Some day, one of these assholes is going to scam the wrong person and they may end up wishing they've gone to jail.

Re:It doesn't say if the scammees get their money. (2, Interesting)

Renraku (518261) | more than 4 years ago | (#29509339)

I've been getting calls from 202-495-7152 for about a week now, several times a day, and if I ask them to stop calling they hang up. I stayed on the line to see what it's about and it's one of those, "You won a million dollars, send us $10,000 for shipping insurance" scams.

I've reported them to as many people as I can, and no one cares.

So yeah, scamming is a pretty good way to make some extra cash, since no one cares enough to track them down or arrest them until they amass millions.

Re:It doesn't say if the scammees get their money. (0)

Anonymous Coward | more than 4 years ago | (#29510035)

http://whocalled.us/ is a handy place when you want to identify that random scammer number on the caller id.

Re:It doesn't say if the scammees get their money. (1)

dgatwood (11270) | more than 4 years ago | (#29510403)

I personally prefer an old computer with a modem:

while true ; do
echo "atdt ###-###-####" > /dev/ttyS0
sleep 30
printf "\E" > /dev/ttyS0
sleep 1
printf "\E" > /dev/ttyS0
sleep 1
printf "\E" > /dev/ttyS0
sleep 1
echo "ATH0" > /dev/ttyS0
done

Re:It doesn't say if the scammees get their money. (0)

Anonymous Coward | more than 4 years ago | (#29511811)

Just get them to give you $100 shipping insurance on the $10,000 each time they call :P

Re:It doesn't say if the scammees get their money. (1)

phoenixwade (997892) | more than 4 years ago | (#29509349)

Some day, one of these assholes is going to scam the wrong person and they may end up wishing they've gone to jail.

I hope that a ton of media coverage erupts when it happens, otherwise it'll be just another statistic.....

Re:It doesn't say if the scammees get their money. (0)

Anonymous Coward | more than 4 years ago | (#29509789)

Already happened. Around 10-15 years ago a pump and dump stock spam apparently caused a problem for a mob pump and dump . The 2 guys who were doing it were found at the house of one of them tied p and shot once in the head.

Re:It doesn't say if the scammees get their money. (1)

Locke2005 (849178) | more than 4 years ago | (#29509749)

Some day, one of these assholes is going to scam the wrong person and they may end up wishing they've gone to jail. I suspect anybody smart enough to track down, kidnap, and torture one of these assholes is also smart enough to not fall for the scam in the first place... sigh.

I still get emails from people who scan the resumes on Monster.com and offer people a work-at-home position receiving checks, then wiring the money overseas... best of all, "it is perfectly legal!"

I think the Nigerians justify their activities by regarding it as an effective tax on stupidity. To fall for a scheme like this, you have to be 1) stupid, 2) greedy, and usually also 3) dishonest.

Re:It doesn't say if the scammees get their money. (2, Funny)

Chyeld (713439) | more than 4 years ago | (#29510209)

Jimmy, com'ere'amoment.

I got something for you. This asshole see, he promised my grandmother something and didn't make good. I'd like you to pay him a visit and discuss it real nice like. Explain to him how heartbroken my grammy is about losing her savings. See what sort of refunds he offers. Oh, take the boys with you, make it a night out on the town. Paint it red.

case background (4, Informative)

Trepidity (597) | more than 4 years ago | (#29509385)

The FTC has an archive of case materials [ftc.gov] . Looks like a complaint was brought in 1996, and he settled in 1997, which included agreeing to a permanent injunction. The FTC brought another complaint in 2006, got a temporary restraining order, and a finding of contempt of court in 2007. The 2007 filing [ftc.gov] is the one that instituted a $3.2 million fine and ordered Neiswonger to turn over title to a specific residence in Las Vegas as part of paying it.

It's not clear to me if that's his primary residence or a secondary one. Usually primary residences are shielded from civil judgments. If it's a secondary one, this case isn't unusual at all, since ordering a 2nd home to be sold to pay a judgment is common. If it's a primary one, I'm not sure if the rules are different because it's a contempt proceeding. (In theory it seems the rules might also be different for even primary residences purchased with ill-gotten money, but none of the complaints seem to allege that specifically.)

The FTC also has a slightly more detailed version of this news [ftc.gov] , fwiw.

Re:case background (2, Insightful)

kelnos (564113) | more than 4 years ago | (#29509597)

Assuming this guy has been scamming the whole time and didn't just start in the past few years (or didn't stop in the 90s and just start up again), it's pretty sad that it's taken 11 years from the original complaint to get any meaningful actions taken. Though you could argue that's 13 years, and not 11, since apparently he hasn't complied with the court order for 2 years, with no consequences until now.

Re:case background (1)

RobinEggs (1453925) | more than 4 years ago | (#29510511)

Usually primary residences are shielded from civil judgments.

The problem here, of course, arises when scammers and people filing bankruptcy own $3.5 million primary homes. Correct me if I'm wrong about your state or local area, but I've heard scammers and people filing bankruptcy frequently walk away with mega-mansions while failing to repay thousands or millions in stolen money and bad debt.

Re:case background (2, Interesting)

SuperMog2002 (702837) | more than 4 years ago | (#29511933)

It depends on what state you're filing in, as federal bankruptcy law explicitly defers that decision to the states. Here in Texas, you can choose between the federally recommended exemptions (which only allows you to keep $20,200 of equity on your home), or Texas's own set of exemptions (which lets you keep any size house, but only up to 10 acres of land in the city or 100 acres of land in the country, and is more restrictive in other categories than the federal expeditions). I'm sure it varies wildly from state to state.

And other property... (1)

Neanderthal Ninny (1153369) | more than 4 years ago | (#29509615)

Get all of his property, including anything off-shored (property, money & other stuff) and vehicles (car , boats & airplanes) that this moron has,
The most important that they get the off-shored stuff since most criminals now, like companies, are off-shored so they can put these items into tax and legal havens so these people don't have to worry about tax or government garnishing these things.
If the US is really smart, they should go after all these criminals so they can recoup lost of tax revenue that we, legal people pay for, and get those criminals really shaking in their boots.

Selling illegal services? (1)

Locke2005 (849178) | more than 4 years ago | (#29509683)

Isn't hiding assets from creditors unlawful? Isn't any "service" designed to assist people in committing unlawful acts also illegal? What is the difference between "You can make big $$$ selling our program to help people hide their assets!" and "You can make big $$$ breaking legs for loansharks whose borrowers don't pay up!" Either way, your business model is asking people to pay you to help them commit crimes. This fails one of the first tests any "business opportunity" should pass: is it legal?

Re:Selling illegal services? (1)

nomadic (141991) | more than 4 years ago | (#29510051)

Isn't hiding assets from creditors unlawful? Isn't any "service" designed to assist people in committing unlawful acts also illegal?

There are legal ways to hide some assets from creditors; well not really "hide," but more like put in a form they can't reach. Though that is probably not what this guy was doing.

Re:Selling illegal services? (2, Insightful)

Artifakt (700173) | more than 4 years ago | (#29510955)

Not all forms of asset protection are illegal:

1. A Prenuptual agreement is technically a form of asset protection. Putting assets into some forms of trusts for dependants or descendants is also. In general, when there's a marriage or a child involved, or a business partnership, a second person's rights to privacy may mean a creditor has at best limited rights to know about assets, particularly ones they also can't legally claim. In the ordinary course, there shouldn't be legally shielded assets that a creditor could somehow legally claim if they only knew more about them. But there are often legally shielded assets that the creditor either believes aren't really shielded or that the creditor would try to take if he or she could get the debt resolved that way. If you've heard the phrase "Possession is nine tenth's of the law", maybe that explains how legal asset protection actions are possible.

2. One reason for people to form LLCs is having multiple income sources. For example, if you run a dog grooming clinic and an auto repair service, separate limited liability corps are a perfectly legal way to limit damages you can be sued for. A lawsuit effectively can't take more than the related S-corp's total assets, So if you were, for example, sued for an inadequate repair job, they can't garnish the money that comes from the dog grooming business. Note that there are ways to get around this sometimes if the case rises to criminal negligence or there's other proof the corporate structure was itself intended for criminal purposes, but the basic idea here is legal.

Keep the house (1)

T Murphy (1054674) | more than 4 years ago | (#29509861)

I say he should go to jail and keep the house. While in jail he can't lose any more money- in the mean time the house can earn him rent so maybe he can upgrade to a hotel.

Re:Keep the house (1)

compro01 (777531) | more than 4 years ago | (#29510247)

That depends on which rules you are using. Going by the official rules, you cannot collect rent while in jail.

Re:Keep the house (2, Interesting)

shentino (1139071) | more than 4 years ago | (#29510661)

http://en.wikipedia.org/wiki/Monopoly_(game)#Rules [wikipedia.org]

Sorry but you are not correct.

In fact, landing in jail towards the end is a relatively cheap way to avoid having to pay rent.

I don't see the actual *crime* here... (3, Interesting)

pla (258480) | more than 4 years ago | (#29509893)

Um, how did his claim count as fraud? He made (at least) 3.2 million selling his "program". So surely others could manage the claimed "six figures" doing the same thing, no? Thus, no fraud. His system worked, simple as that.

Granted, the end-product may (or may not - He may have said nothing more complex than "sell everything and bury your cash in the back yard") have violated a law or two, but he didn't actually sell the "asset protection" service, he sold educational material on how to hide assets. And he didn't really even do that, according to the FTC, he sold lessons on how to sell educational material on how to hide assets.

Seriously, how many layers of indirection do you have to toss in before it stops counting as a crime? If I convince you to pay me $20 to tell you where you can find bomb-making instructions, then send you off to the library after you pay up... Have I committed a crime?

Re:I don't see the actual *crime* here... (1)

maxume (22995) | more than 4 years ago | (#29510835)

If his program consisted of something other than "Sell a questionable business plan for asset protection services to damn fools.", his success at it doesn't factor into it (because he wasn't necessarily running the system he was selling).

Re:I don't see the actual *crime* here... (4, Insightful)

MrCrassic (994046) | more than 4 years ago | (#29511795)

IANAL, but if you knew the intent of the person wishing to find those bomb-making instructions, and you help him anyway, wouldn't that make you an accomplice to the crime?

Debtors Prison (2, Insightful)

sexconker (1179573) | more than 4 years ago | (#29510265)

While scumbag scammers need to go to jail, they should go to jail for being scumbag scammers.

It sounds like they couldn't get this guy for a real crime, so they decided trump up fraud charges and fish out people who fell for the scam and enter a judgment of $3,200,000.00 against him.

That's fine. If the fraud charges are valid they'll withstand appeals. If he covered his ass with "results not typical" and etc., then he should win the appeals.

The move to hold him in contempt of court until he pays up is a thinly veiled attempt to put him in prison ("justice" for his non-criminal crimes) while he works on further appeals. If he hands over the deed and otherwise pays up, it'll bankrupt him so he can't afford to proceed with further appeals.

Courts have way too much power in regards to putting you in jail if you can't afford whatever it's been decided you owe.

People need to pay their debts, and cough up for actual damages, and courts should have the power to take your assets if need be. But a lot of judges act like 12 year olds with an @ sign on IRC and abuse thier power to no end in order to shoehorn their idea of justice in.

The typical bullshit is "Pay up or go to prison. Your choice.". When a person can't pay (see 95% of "deadbeat dads"), prison isn't a choice - it's a jail sentence for a private debt that should be settled between the parties in arbitration and, if necessary, asset valuation and seizure.

That's some old world shit we were supposed to have left behind.

Re:Debtors Prison (1)

mysidia (191772) | more than 4 years ago | (#29510429)

This guy has a history, he is no first-time offender. I have no sympathy for a guy who ripped off people for $11 million in 1996, plea bargained for some $3 million. Had more money overseas (out of US gov't reach) than he reported, and then basically violated an injunction against him and did it all over again...

And his reason [ftc.gov] for not turning over title is listed in the Memorandum

It is clear that since the inception of the present lawsuit regarding defendantâ(TM)s contempt of the 1997 Stipulated Final Judgment and Order for Permanent Injunction, the defendant has engaged in suspect activities regarding this property, including but not limited to, an attempt to sell the property in April 2007 (after the original Civil Contempt Order was entered invoking an asset freeze). He now contends that the property is held in trust (the SRN Trust), he has resigned as a trustee under the trust, and that his wife Shannon is the only one as Trustor that can convey (or must also convey) title to the Verlaine Property. The manner is which the defendant âoeresignedâ his trusteeship under the SRN Trust is highly suspect, and by all accounts, ineffectual. According to the express terms of the SRN Trust, trustees have the power to act individually or unilaterally to sell and/or exchange all trust

Neiswonger executed a brief written statement resigning as trustee of the SRN Trust. However, contrary to Nevada law, this statement of resignation was not notarized nor recorded at the time it was executed. Instead, it wasnâ(TM)t until April 2008 (after the Civil Contempt Order was entered...

Furthermore, the only affirmation as to when this statement of resignation was purportedly signed by defendant is his wife Shannonâ(TM)s notarized affidavit

Assuming arguendo that defendant Neiswonger did in fact resign as a trustee under the SRN trust, he never resigned as a Trustor under the SRN Trust. As a Trustor under the SRN Trust, the defendant can remove the Verlaine Property from the Trust on his own by signing a document to that effect.

Once the defendant or the defendant and his wife revoke the SRN Trust (as Trustor or Trustors), the Verlaine Property becomes community property. As community property in 4 Nevada, it can be transferred to the Receiver, even though Shannon Neiswonger is not a party to this lawsuit. âoeNevada is a community property state, and under the law of Nevada, `community property is subject to a spouseâ(TM)s debt irrespective of whether both spouses were a party to the action.â(TM)â FTC v. Neiswonger, et. al., - F.3d. ...

Homestead (0)

Anonymous Coward | more than 4 years ago | (#29510623)

I thought in a state with homestead rules the govt cant seize a persons home?

Any wife involved? (2, Funny)

PPH (736903) | more than 4 years ago | (#29511223)

If its a community property state, the FTC will only get half. And if she's anything like my wife, after sharing the place for a few months, the gov't will come crawling back, begging to have Neiswonger take it back.

lol (0)

Anonymous Coward | more than 4 years ago | (#29511369)

is there an option forfeit a summer home in nigeria instead? lol

not much much of a penalty (1)

plopez (54068) | more than 4 years ago | (#29511791)

the last time I looked houses in Vegas were worth a box of chicklets. Gum, not strippers you perverts.

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