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Government The Courts

Court To Scammer, "Give Up Your House Or Go To Jail" 152

Posted by kdawson
from the on-the-bright-side-the-rent's-free dept.
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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Court To Scammer, "Give Up Your House Or Go To Jail"

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  • Haha! (Score:5, Insightful)

    by Kalriath (849904) * on Tuesday September 22, 2009 @05:29PM (#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?

    • Not really... (Score:5, Insightful)

      by schon (31600) on Tuesday September 22, 2009 @05:37PM (#29509189)

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

      • by Anonymous Coward on Tuesday September 22, 2009 @05:45PM (#29509273)

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

        • by TheLink (130905)
          Then he can give them his house and not go to jail.

          If he's stashed away enough assets, the opportunity cost of going to jail should outweigh the cost of his house.

          He can't sip a cocktail in the Bahamas if he's in jail.
      • by nurb432 (527695)

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

      • Re:Not really... (Score:4, Interesting)

        by timeOday (582209) on Tuesday September 22, 2009 @05:58PM (#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.
        • by Moryath (553296) on Tuesday September 22, 2009 @06:01PM (#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?

          • by UltraAyla (828879) on Tuesday September 22, 2009 @06:51PM (#29509765) Homepage
            Hey, California has enough problems without you giving us Las Vegas!
        • Re: (Score:2, Interesting)

          by mysidia (191772)

          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 own

        • by MrCrassic (994046)

          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...

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

    • He's a thief, his ass-et belongs in jail. Why is it that a poor man who shoplifts food goed to jail, while a rich man who steals thousands of dollars simply has to pay for what he's stolen?

    • I have no more mod points else I would have modded u for sure

  • WTF? (Score:5, Insightful)

    by drew_92123 (213321) on Tuesday September 22, 2009 @05:33PM (#29509149)

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

    • Re:WTF? (Score:5, Insightful)

      by JCSoRocks (1142053) on Tuesday September 22, 2009 @05:39PM (#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: (Score:3, Insightful)

        by pha3r0 (1210530)

        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? (Score:5, Funny)

        by Arthur Grumbine (1086397) on Tuesday September 22, 2009 @07:19PM (#29509985) Journal

        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: (Score:3, Insightful)

        by dgatwood (11270)

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

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

          And then the previous iteration of idiots elects Idiot 2.0 to be in charge...

      • by Dan541 (1032000)

        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.

      • 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.

        That's backwards. You have to punish them, because it's impossible to fully educate customers (well, absent destroying capitalism and keeping transactions to simple barter).

        Imagine that there are one million people, all equally intelligent and educated, and all equally hard working. Now imagine that each of them executes 10,000 equal-

    • Re: (Score:3, Insightful)

      by discojohnson (930368)
      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: (Score:1, Funny)

        by Anonymous Coward
        Put them in jail too. Make up some shit about them being accomplices.
      • 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.

      • by mcgrew (92797) *

        I pity the kids, but his wife simply married the wrong asshole. If you marry a gangster you risk being shot, if you marry a fraudster you risk losing everything.

        Actually everyone risks losing everything every day. There is no such thing as safety, but some activities are safer than others.

    • by antic (29198)

      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?

  • Absolutely... (Score:1, Interesting)

    by mkdx (1314471)
    Take the house and put him in jail... Actually, Waterboard him too.
    • Re: (Score:2, Informative)

      by e9th (652576)
      Hey, it could still happen. The judge in the case, Stephen Limbaugh, Jr, is Rush's [rushlimbaugh.com] cousin.
  • 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.
    • 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.
    • by mcgrew (92797) *

      I hope the government has a plan to build more jails because they will fill up fast with these fools.

      No need for more jails, just let those folks out who don't pose a threat to others -- gamblers, hookers, and dopers. Well over half of all US prisoners are there on nonviolent drug charges.

  • by NoYob (1630681) on Tuesday September 22, 2009 @05:42PM (#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: (Score:3, Interesting)

      by Renraku (518261)

      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.

      • by mpe (36238)
        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.

        Maybe you should say that you are delighted that they have accepted your "call review service" at $X per call plus $Y per minute.

        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.

        In which case you have an address to send them an invoice.
        • by Dogtanian (588974)

          Maybe you should say that you are delighted that they have accepted your "call review service" at $X per call plus $Y per minute. [..] In which case you have an address to send them an invoice.

          Yeah, that's going to be a raging success (just like the previous thousand times something similar's been suggested on Slashdot.)

          They've been running a scam and ripping people off without concern as to whether it's legal. But they're *definitely* going to fork out when some (not-so) smartass basement dweller sends them an invoice for some half-baked quasi-legalistic scheme they thought up.

    • 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.....

    • by Locke2005 (849178)
      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 thei
      • Re: (Score:3, Funny)

        by Chyeld (713439)

        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.

    • by masonc (125950)

      I love getting Junk Mail, the physical kind, how else would I light my pizza oven? No, really...
      http://pizzaontherocks.blogspot.com/2009/09/wednesday-sept-92009.html [blogspot.com]

  • case background (Score:5, Informative)

    by Trepidity (597) <delirium-slashdo ... org minus author> on Tuesday September 22, 2009 @05:58PM (#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: (Score:3, Insightful)

      by kelnos (564113)
      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.
  • 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 th

  • 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?
    • by nomadic (141991)
      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: (Score:3, Insightful)

      by Artifakt (700173)

      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 credi

  • by pla (258480) on Tuesday September 22, 2009 @07:09PM (#29509893) Journal
    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?
  • by PPH (736903) on Tuesday September 22, 2009 @10:20PM (#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.
  • the last time I looked houses in Vegas were worth a box of chicklets. Gum, not strippers you perverts.

Two can Live as Cheaply as One for Half as Long. -- Howard Kandel

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