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Trustee fraud: truth vs. scam

From The Dictionary of Financial Scam Terms^©

An easy-to-understand guide to financial terms used by swindlers.

Trustee: 

An individual or organization entrusted with holding and managing assets for a Beneficiary. 

It is the usual and customary practice for a Trustee to perform his tasks under instructions from the Beneficiary.  If the Beneficiary is an incapacitated individual, the Trustee may have no other instruction than to guard the assets and increase the value of the assets if possible.

Under the current (2000) Uniform and Model Acts established by the Uniform Law Commissioners (U.S. Law), a Trustee must manage the Trust in good faith and must not place the welfare of others over those of the Beneficiary - the Trustee must be loyal to the Trust given him.  (Article 8, Duties and Powers of Trustee)

Should a Trustee fail to follow the duties laid out in Article 8, either through neglect or willful act (such as embezzlement of trust assets or pocketing profits realized by the Trust), then the Trustee is in breach of Trust.

If the Trustee has made profits during his breach, they must be turned over to the Beneficiary.  If losses occurred, he has to make them up.  (Article 10, Liabilities of Trustees and Rights of Persons Dealing with Trustee).  

Beyond that, the Trustee could be looking at a jail sentence if a felony such as embezzlement was committed.

For more information, see http://www.law.upenn.edu/bll/ulc/uta/2001final.htm

The Scam:  Trustee is a word that naturally invokes the concept of trust.  It is an excellent vehicle for swindlers, who use it with abandon to persuade you that your invested funds will not be at risk if deposited with the swindler's "Trustee."

Furthermore, anyone may create a bank account with the word "Trust" in the title.  One need not actually be a Trustee to do so (BANK ACCOUNT NAMES).

It is very common for swindlers performing a DEBENTURES TRADING scam or a HIGH-YIELD INVESTMENT PROGRAM FRAUD to profess that the investment fund is being run by a government, bank, or Attorney's Trust.

Unfortunately, the alleged Trust accounts are nothing of the sort.  Once funds are transferred to the bogus account, the swindler removes the funds as quickly as possible and they are seen no more.

BT-9/trustee

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