Is my mother potentially complicit in fraud?

January 11, 2013 9:29 AM

My generous, trusting mother was conned out of tens of thousands of dollars (gradually) by a good-for-nothing young cousin over the course of a few years. When my mother ran into financial trouble last year, she sought repayment of these "loans." The cousin insisted that she didn't have to pay back a cent and promptly disappeared. She reappeared last week with a very large check, written directly to my mother's bank, and written by some random guy. I'm worried that the cousin has simply conned somebody else ("please, my home is being foreclosed on, I really need this loan, you can even write it directly to the bank") to cover part of her debt. She isn't talking, and my trusting mother is angry that I'd suggest such a thing. (So a lawyer is out of the question.) Is my mother potentially complicit in fraud by depositing this check?
posted by anonymous to Law & Government (15 answers total)

She might be getting conned again. If it bounces, she's going to have to pay fees and so on.
posted by empath at 9:31 AM on January 11, 2013 [4 favorites]

She needs to talk with a lawyer. I know it's out of the question, but it's the correct answer. Taking a third-party check from a known liar and cheat is obviously not a good idea.
posted by facetious at 9:43 AM on January 11, 2013 [5 favorites]

yeah, I'd be more concerned the check is bogus than fraudulent.
posted by k5.user at 9:44 AM on January 11, 2013 [3 favorites]

Does the check have contact information? You could call the random guy and find out what he thinks is going on.
posted by qxntpqbbbqxl at 9:50 AM on January 11, 2013 [9 favorites]

Why not suggest to your mother that she ask for the check to be re-written, payable to her? Surely, if this is not a scam, the person writing the check should have no problem tearing up the one to her bank and writing a new one.
posted by Rock Steady at 9:56 AM on January 11, 2013

Personally, I don't even understand how someone could be allowed to deposit a check not made out to her but to her bank. Seems odd.
posted by chinston at 10:03 AM on January 11, 2013

I don't think your mother has an obligation to do due diligence and find out the background on the check. If it can be deposited, trying to do so would not make her a party to fraud. IANAL. If the check is made out in an amount more than what is owed, and the cousin asks for cash back, I would have concerns and ask her bank about it.
posted by JohnnyGunn at 10:16 AM on January 11, 2013 [3 favorites]

Your mother can verify that the funds are on deposit BEFORE depositing the check. Just go in and speak with a clerk, not a teller!

That said.

I don't understand a check made out to a bank. Talking your mom into presenting the check to a clerk for verification addresses many of your concerns. Surely you can talk her into this, since she wouldn't want the check to bounce? Right??
posted by jbenben at 10:21 AM on January 11, 2013 [2 favorites]

@JohnnyGunn: yes, she might well be a party to fraud, if the cheque was fraudently acquired and she deposited it. In the UK, this would count as "handling stolen goods". Even if she doesn't "know" that the cheque was dodgy, if you show a "wilful blindness to the circumstances" then the law holds that you ought to have known. Of course, she might be unlikely to be convicted of anything, but it does seem risky to deposit a dodgy looking cheque without asking any questions. I believe the laws are the same or very similar in the US.

(I am also NAL, so this may all be incorrect. Consulting a real lawyer or attempting to contact the cheque writer seems prudent to me.)
posted by richb at 10:26 AM on January 11, 2013

She needs legal advice not from the internet before cashing the check. If she does not seek legal advice, she almost certainly opens herself to legal liabilities if the large check was not intended to go to her, or was obtained fraudulently, or any number of other circumstances, even if your mother is owed a legitimate debt and even if your mother believed she was honestly collecting on that debt.

The laws, rules and regulations concerning negotiable instruments, which a check is, are complex and often create liabilities against innocent holders who cash or deposit them. It is not my area of practice, and I am not your mother's lawyer, but generally, the laws, rules, and regulations do not favor a third-party possessor of an instrument that is not made out to "bearer".

If that paragraph seemed jargony and unclear, well, that's because the rules concerning checks are not as simple as "someone gave me this check, i want to cash it, so i can't get into any trouble because the person who gave me this check told me i could cash it."

I don't know how you can best protect your mother if she won't talk to a lawyer. Perhaps having her ask a bank manager before she deposits the check will help?
posted by crush-onastick at 10:41 AM on January 11, 2013 [9 favorites]

+1 to what crush-onastick said. Please ignore my non-lawyer ramble about laws in the UK which almost certainly wouldn't apply anyway, and read his/her post instead.
posted by richb at 11:25 AM on January 11, 2013

IAL, but not yours.

Assuming this is the US she could be sued for "unjust enrichment" if the facts are:

Maker of check was duped / defrauded / lied to by cousin and wouldn't have written check but for that, AND cousin's conduct makes cousin's acquisition of the check wrongful such that maker of check could have sued (and maybe could still sue) cousin and gotten a judgment in the amount of the check.

IF that is true then mother's receipt of the money is probably "unjust" as between her and maker of check.

The example I give folks is this:

Suppose I steal a bag of cash from Bank.
I give it to you as a gift and you have no knowledge it's stolen money.
Bank finds out you have their money.
Bank wants the money back.
Who gets the money? Bank. Even though you are morally blameless and have done nothing wrong, as between Bank and you it would be unjust for you to get to keep money stolen from them.

Thus here, Mom's risk depends upon how and why Cousin got the money.

I'd be very very loathe to negotiate the check AND then spend the money without knowing who wrote the check and why.

Bottom line - not a hard issue to analyze - worth a call to a lawyer or even better, a chat with maker of the check. THAT is the person who matters most here.

Hope that helps.
posted by BrooksCooper at 12:42 PM on January 11, 2013 [2 favorites]

How old is your mom? There's a growing awareness of Elder Abuse in financial institutions.

I am not a bank manager, but if your mom won't talk to hers or to a lawyer you could potentially contact them and I think it's likely they'd try to protect your mom - and themselves of course - by taking a closer look at the check.
posted by bunderful at 2:02 PM on January 11, 2013 [2 favorites]

Usually cheque scams involve a second stage, of requiring the victim who has deposited the fake cheque to then forward a portion of the money to a third party. The original cheque then bounces, the bank takes the whole original value of the cheque, and the victim is out by however much he/she forwarded. Presuming you're in the US, you can find more info here.

It may be the case that your cousin is not wanting to bother with a more complicated fraud, but has merely produced an unconvincing fake cheque to manufacture a paper-thin excuse about having tried to repay your mother but due to someone else's fault it didn't happen - the random guy's fault, the bank's fault, etc.
posted by kithrater at 2:20 PM on January 11, 2013

If it's a personal check for tens of thousands of dollars made out to someone who rarely or never deposits that kind of check, the bank will be taking a very close look at it already. There will be IRS forms and a signature check and a holding period that may last several weeks. The sender will probably get a phone call just to confirm. So as a practical matter, if there is anything wrong, it will probably come out before the check clears. Of course if it's a bad check she may get in legal trouble and have to pay huge fees.
posted by miyabo at 7:22 PM on January 12, 2013