Filed under: collections, probate | Tags: collection, deceased, probate, wwr letter
Today’s post is scheduled to appear in the next issue of The WWR Letter, which is due to come out later this summer.
How Does a Creditor Collect a Debt Against a Deceased Debtor in Ohio?
By: Julie A. DiBaggio, Associate
Generally, a creditor’s claim against a deceased debtor is not extinguished upon death but the procedure in attempting to collect the debt through the courts is different from a traditional collection matter. Prior to the death of a debtor, a creditor can file a lawsuit if warranted and personally name the debtor in order to obtain a judgment and subsequently file a judgment lien. However, when a debtor passes away, a creditor cannot simply file a lawsuit against the deceased debtor to obtain a judgment. In order for a creditor to protect its rights to collect a debt from a decedent, a claim must be presented into the decedent’s estate according to the particular state probate laws that govern presentment of a claim. In some cases, the creditor must apply to administer an estate in order to present its own claim.
Each state has adopted its own probate laws and each county court within a state has unique rules that outline the requirements for presenting a claim into an estate. The individual state and local court requirements in presenting a claim will vary on the time allowed to file a claim, the procedure or form used to file the claim, and the actions a creditor may take when a claim is rejected or disallowed by the estate’s representative. Thus, a creditor needs to be aware of the particular state laws and local court rules, which has jurisdiction over the deceased debtor’s estate, to ensure they are not barred from collecting a debt simply for failing to comply with the procedural requirements.
A creditor needs to be particularly aware of the imposed statute of limitations to file a claim under each state’s presentment statutes. In Ohio, for example, a claim of a general creditor against an estate must be presented within six (6) months from a decedent’s date of death whether or not the assets of an estate are released from administration or if an executor or administrator is appointed during the six-month period. O.R.C. 2117.06 (B). This means that the time for a creditor to present a claim in Ohio starts to run from the date of death, not from when an estate is actually opened, and that the time period expires after six months has passed.
In theory, the imposed time periods are to simplify the estate process and to facilitate a speedy administration, which should include satisfying a decedent’s debts and liabilities. Yet, the recent trend in Ohio is for a decedent’s family members to use the statute to their benefit by waiting to open an estate until after the six-month time frame has lapsed in order to time-bar all creditors’ claims that would be presented once the estate is actually opened. The question then becomes how can a creditor protect its rights in collecting against a deceased debtor if no estate is opened within the allowed time frame?
One option is to send a demand letter and/or invoice statement in the name of the decedent to his or her last known address, and to anyone appointed as the individual’s caregiver, guardian, or power of attorney, if known. The reason for sending a demand letter is an exception exists under the presentment statute that will deem a creditor’s claim timely filed if the person who is eventually appointed the executor or administrator is actually in receipt of a written notice of the claim within the sixth months from date of death. O.R.C. 2117.06 (A) (c). The challenge for a creditor is proving that the appointed representative was in receipt of the written notice within the required time period. This becomes a factual issue and the estate’s representative typically will reject the claim on this basis, which in turn will require the creditor to file a lawsuit against the estate to litigate the issue. Upon receiving a rejection of the claim, a creditor faces another imposed statute of limitations in Ohio, which requires a lawsuit on a rejected claim to be filed against the estate within two (2) months from the date the rejection is received. O.R.C. 2117.12.
A second option for a creditor if no estate is timely opened is to apply to administer the estate, as a creditor, within the six-month time period. Primarily, the Probate Courts in Ohio will accept an Application for Authority to Administer along with a creditor’s claim being filed simultaneously in order for the claim to be timely filed. The objective in forcing open the estate is to put the known heirs and/or family members on notice that an estate application has been filed to liquidate the decedent’s assets to pay his or her debts. Ideally, the intent is for the heirs to respond by taking over the estate administration but the creditor is still protected because the claim was timely filed. However, the risk is that no one takes over the estate and the creditor’s representative is appointed as the administrator over the estate.
In summary, a creditor can collect a debt against a deceased debtor in Ohio by filing a claim into the debtor’s estate but the manner in which a creditor protects its interest is governed by the individual state laws on presentment of a claim and the local court rules. In certain circumstances, an estate is not timely opened and in order to protect its rights, a creditor must decide to apply to be appointed the administrator to file its own claim within the required filing deadline. The creditor should be aware that its representative could be appointed as administrator over the estate if no one comes forward on behalf of the decedent. Before proceeding down the path of applying to administer an estate, a creditor should evaluate if it is cost-effective to administer an estate given the amount of assets, if any, that are available to satisfy the outstanding debt.
Julie A. DiBaggio is an Associate in the Special Collections and Probate (Deceased Collections) departments of the Cleveland office. She can be reached at (216) 685-1033 or jdibaggio@weltman.com.
* Ohio Courts have held that “no strict form requirements are imposed for the presentment of claims to an executor.” H & R Accounts, Inc. v. Steel, 2006-Ohio-2331, citing Children’s Med. Ctr. v. Ward (1993), 87 Ohio App.3d 504, 622 N.E.2d 692. Claim can be letter or document (writing) and must contain the name of the decedent, creditor’s name and address, nature of the debt, and the amount owed to constitute “sufficient compliance” with the Ohio Revised Code. H & R Accounts, Inc. at ¶ 27.
Today’s guest blog is an article entitled ‘Our Myths Hold Us Back’, which was recently featured in the CU Times, reprinted with permission from the author Guy A. Messick. Guy is an attorney with Messick & Weber PC in Media, PA and General Counsel to NACUSO. He can be reached at 610-891-9000 or gmessick@cusolaw.com.
The stories we tell ourselves frame how we view the world, our place in it and how we respond to it. I call this internal viewpoint our myths, our prisms that interpret the world. The myths we create for ourselves have a profound impact on our ability to recognize and respond to change. The prism through which we see the world is formed for each of us, not surprisingly, during our formative years. For example, the children of the depression in the 30’s were adults in the boom years of the 50’s but they never took prosperity for granted and made decisions based on that view. The children of the depression could never have been the free spenders of the 80′s and 90′s.
The myths of credit unions developed in the formative years of credit unions. Credit unions were a movement then, not an industry. Members were drawn to credit unions because credit unions met the financial needs of members who were underserved and overcharged by the banks. Credit unions had better rates and intimate, customized service levels. Member ownership and self-government gave members a sense of empowerment and independence from the factory owners and bankers who otherwise ruled their worlds. The “goodness” of credit unions was self-evident and did not have to be marketed. From those myths we tell ourselves that only credit unions really care about the members and know how to serve them. Only we know what is best for our members. These myths comfort credit unions with a false sense of security that the natural order of things will always contain credit unions and people will know through their DNA about the “goodness” of credit unions.
These myths will kill us. If credit unions are so obviously better than banks, why do we not grow market share? Why are we losing the battle for the youth market? Why do our members also use banks and other financial providers? It is time we see credit unions not through our traditional prism but through the prism the world sees us.
Myth 1: Credit union’s fees for services are lower than the competition and at greater service levels. Does anyone really believe this anymore? In today’s world, members can choose financial service providers that have scale and market power to deliver financial services at fees much more favorable than credit unions can offer and at greater convenience, such as ING Direct and Lending Tree.
Myth 2: Credit unions go out of their way to give people a hand when they need it. There is no doubt that credit unions do this and I hope they continue to do this. Having said this, credit unions cannot stay in business by having a portfolio of “character” loans. In today’s world, credit unions must use objective safe and sound underwriting criteria or they will go out of business.
Myth 3: Credit unions are better because they member owned. Sounds good but what is the tangible benefit? Dividend returns are a powerful means to drive home the membership difference. At DFCU Financial Credit Union in Michigan, a patronage dividend of 50 basis points is paid on loan and deposit balances. The more a member uses the Credit Union, the more value the member perceives and receives. This is a game changer. In the four years that the program has been in place in a state where the population is declining, membership has grown 5% and the average deposit balance per member has grown over 23%. If you give members a tangible benefit for doing business with you over your competition, they will come…and bring their money.
Myth 4: Only credit union people know how to best serve their members. This is paternalistic nonsense. Members want to be empowered to interact with the credit union on their terms. The world outside of credit union is full of very innovative and effective people. There are credit unions that are open to new ideas and innovation. They are open to finding the best service solution whether that is delivered by their employees or in collaboration with CUSOs and third party service providers. The credit unions that use an open sourced business model to deliver best of breed services to their members will be the surviving credit unions.
Myth 5: It is insulting and manipulative to sell to members and credit unions are above that. There is a reason that a large portion of the media and the public is ignorant about credit unions and credit union growth is stuck in a rut. Credit unions need to sell themselves to be heard in the very competitive financial marketplace. The world sees credit unions as just another box of cereal on the supermarket shelf. Why would the consumer select the credit union cereal over the bank cereal? If a credit union is proud of its product offerings, promote and sell them. Find the competitive advantages for your credit union and promote them aggressively.
The mission of credit unions is a noble one. People helping people. But we will not survive as an industry unless we see credit unions as a business, a business that needs to use all the tools of business to survive. We will survive if we embrace our structure and provide best of breed services wherever those services can be sourced and if we provide tangible member benefits. It is not enough to provide great service and benefits, we need to effectively communicate the credit union difference and use proven sales techniques in order to be heard by our members and potential members. It is time to shed the myths that are holding us back and embrace the world as it is not as a nostalgic fiction. Members will be better served and credit unions will survive to serve them.
Today’s blog comes courtesy of Jimmy Marks. Jimmy is the Creative Media Director at DigitalMailer, Inc. and a credit union member. He manages and contributes to several websites and blogs, including www.clickconnectcommunicate.com, www.cusoapbox.com, www.exigent911.com, and www.nothingtodowithcreditunions.com.
It was at the NACUSO regional meeting a few months ago that Ron Daly, my boss, described our work relationship as “Perry White and Jimmy Olsen”. I think this is a pretty sharp analogy. He’s the veteran “newsman,” a person who has been working for and with credit unions for more than thirty years now and, more importantly, a guy who always knows what he wants. I’m the nerd running around in a sweater vest (and yes, I often wear a sweater vest), snapping pictures, managing our websites and blogs, creating content and trying to stay “cutting edge.” So close is our resemblance to Superman’s Pal and Superman’s boss, I’ve actually started calling Ron “chief”. The jury’s out on whether he likes it or hates it.
If you’re as good at being a nerd as I am, you’re asking “Well, if you’re Superman’s pal and he’s Superman’s boss, who’s Superman?”
I decided after thinking about this for way too long (read: a few months) that our client base – the credit union industry – fit that roll pretty well. Every day, we hear stories about credit unions across the country reaching out to the underserved and underprivileged. We talk to credit unions about their initiatives, their charities, their pet projects, and their goals. Once in a while, a client of ours gets featured for their good work in a magazine or trade paper and we send around a “congratulations/”wouldja look at that” email here at DigitalMailer. Let’s face it – credit unions are pretty super.
But as any good nerd will tell you, Superman’s not always Superman. Sometimes, he’s Clark Kent. As first discussed by Jules Feiffer in the book The Great Comic Book Heroes (and later in the movie Kill Bill Vol 2 by Quentin Tarantino), Clark Kent is a critical part of who Superman is. Not only is Clark Kent the “alter ego,” he’s the human part of a man who isn’t human in any way. He’s also considered meek, clumsy, plain and unobtrusive. Everything Superman is and does is extraordinary, which is why everything Clark Kent is and does must be unremarkable. One can’t be the other.
Credit unions, this is Superman’s best pal, Jimmy Olsen, telling you to put on your cape.
Look! Up on the Web!
Let’s be clear – this isn’t my idea. I’m among a growing list of folks who want to see credit unions promote themselves, individually and nationally, and a larger percentage of the market. Guy Messick of Messick & Weber PC brought up credit unions’ market share at the aforementioned NACUSO 2010 Regional Meeting, saying that we should “get used to” that share if we didn’t start being bold and telling our story as an industry. His ideas were shared recently in this CU Times article regarding CU “myths” . There’s been a lot of struggle in the past few years, and that’s led to a lot of good press for us. We avoided much of the shame and struggle that fell on the big banks and we were praised for our fair lending and attractive credit card policies. You have Ondine Irving, the social media maven behind www.CreditCardConnection.org, to thank (in part) for credit unions’ sudden up-tick in publicity, thanks to her “partnership” with Suze Orman, who might be one remaining financial guru anyone trusts. www.MoveYourMoney.info has also drawn some attention to credit unions and small, community banks by insisting readers/followers take the pledge and move their money away from banks previously thought of as “too big to fail.” Then why aren’t we picking up more members and turning that increase in exposure into profit?
I think our push is getting hamstrung by negativity towards banks. We’re hung up on the mental image of a fat-cat banker in his sock garters and pasty bald whiteness doing terrible things with our money and laughing it off. Yes, people get mad at their bank. Will they switch? Probably not. They’ve been told that being with a big bank means more fees but greater convenience, which let’s face it, is hard to argue against.
Let’s go back to this Superman analogy for a second. Superman isn’t Metropolis’ favorite son because everyone hates Lex Luthor, the greedy bald billionaire. He’s their favorite because of what he does for everyday people.
“I was in trouble and the credit union helped me.”
“I trust my credit union, they’re always there for me.”
“My credit union is the one place I feel safe and sound.”
You’re going to get a million people in the CU marketing game that will tell you “service” isn’t a value add or a differentiator. That might be true, but I’m willing to wager the people who know the difference between a credit union and a bank would be willing to tell others about it in your radio spots, your TV ads, and in videos on your website. “Service” isn’t what sets us apart – it’s the sense of trust, humanity, and yes, community. Stop pouring money into buying royalty-free images and artsy-fartsy ad campaigns and start showing your real members and their real lives.
If you need a little thunder to start your brainstorm, here it is: Extreme Makeover: Personal Finances Edition. Talk about the before and after of a member’s financial life. Better yet, let the member talk about it. See American Express’ “Smart Cookies” page for an example of people making their outlook better because of AmEx, then start talking to members about why they’re with you and not someone else – another credit union, a community bank, a big bank, or the inside of a mattress. Whom did you, as “Super-CU”, untie from the tracks and whisk away to safety? We’re labeled as modest, but that doesn’t mean nobody can tell our story.
Smallville, KS
Jonathan and Martha Kent, a mid-western farming couple, raised Superman and did their best to teach their adopted son right from wrong. Imagine, for a moment, if Superman had landed anywhere else. Would he still have the same values? Would he find it hard to put on his cape every day if he hadn’t been raised on “truth, justice, and the American Way?” You can take the boy out of the small town, but never the small town out of the boy. I should know.
Credit unions were founded to promote thrift and to take full advantage of the spirit of cooperation – in communities, in companies, and in churches all over this country. We wouldn’t exist had it not been for a few enterprising souls who wanted to help their fellow man. Sound corny? Who cares, it’s the truth. And as the incredible Mr. Messick said at the aforementioned NACUSO meeting, success in the next few years is going to mean drinking a little bit of your own Kool-Aid. There are scads of million-dollar-plus success stories that started with a small credit union with a very niche member base turning into the premier banking institution for their area. Remembering where you came from is just as important as keeping a sharp eye on where you’re going.
“Has anyone seen Mr. Kent?”
Chip Filson at CreditUnions.com said credit unions were at a “tipping point”. We’ve got a spotlight pointed on us that’s getting brighter and brighter, and the need to meet those expectations outlined for us by the media is getting stronger. Could we get more members and more assets out of this? Yes, of course we could. But we won’t get it by being meek and wasting resources.
Get the word out about your credit union today. Email members and let them know what you can do for them. Generate a conversation in the branch that could lead to a cross-sell. Turn your loyal members into your living testimonials. It’s easy to do – all you have to do is ask.
Quit waiting for the Huffington Post to do your job for you – start telling people “You qualify for membership. Why aren’t you a member? Get yourself on over here.” Move your money? That’s too short-sighted. Make it “Move your money to THIS credit union TODAY.” Don’t be afraid to flash a tail-feather or two…chances are, you’ve earned the right. I’m inclined to say that if you’re still going after even the past TWO years, you’re doing something right. What is that thing you’re doing right? Tell me about it. Seriously.
As someone who started out not knowing what a credit union was or why it mattered, I can tell you there’s something special about where I put my money. I lose my debit card, I get a new one that day. I need a better line of credit, I ask and I receive. Someone talks to me when I have a problem. It’s an experience that’s hard to find these days. But it’s one I wouldn’t trade for anything.
So, let’s go, credit unions. There’s a lot of problems happening out there and they need a fix. Despite what the naysayers may tell you, you are just the institution for the job.
The meteor’s headed right for Earth. Ditch the suit. Lose the glasses. Fly.
Filed under: Uncategorized
Today’s blog comes courtesy of Christopher Morris, Manager of Communications & Web Resources for CUNA Councils. He blogs regularly at the newly created CUNAverse at http://cunaverse.com.
Like Denise, I’m a voracious reader. And my background is teaching high school English so I also love telling people what to read.
The following are some fairly new books that I’ve read (or am reading) that I think you will enjoy:
1. Switch: How to Change Things When Change Is Hard by Chip Heath and Dan Heath.
This is the follow-up to the also must-read Made to Stick by the Fast Company column writing Heath brothers. Their compelling case studies and easy-to-understand explanations will have you ruminating on all kinds of change in your life as you read. What I liked most about it is that it’s not just a “business” book – you’ll benefit both professionally and personally.
They also have some great resources on their website here. Having the “Switch framework” staring at me on my office wall is a nice reminder of how to get things done when I’m stuck.
2. Be the Hero: Three Powerful Ways to Overcome Challenges in Work and Life by Noah Blumenthal
Here is another “leadership” book that defies expectations. Rather than being bland, its message is relayed in the form of a parable and it’s actually hard to put down! The stories are vibrant and give you a new way to look at things making you want to conquer the world.
3. The Happiness Project by Gretchen Rubin
Don’t click away, stay with me for a second here. This is a year in Gretchen’s life while she tries to increase happiness in her life by following all prescriptions, research and wisdom on the subject. It’s funny, honest and will make you happy. And a happier you will make you more productive.
4. Innovate the Pixar Way: Business Lessons from the World’s Most Creative Corporate Playground by Bill Capodagli and Lynn Jackson
Innovation + Creativity = Pixar. ‘Nuff said.
Pssst…I also write about Pixar in my chapter in Age of Conversation 3, which is a new book on social media. Check it out and all proceeds go to charity.
Bonus! Delivering Happiness: A Path to Profits, Passion, and Purpose by Tony Hsieh, CEO of Zappos.com Inc.
This book arrived on my doorstep today and I can’t wait to read it. Zappos has been well known for being a fantastic place to work and for its amazing customer service. They also make money.
Change. Happiness. Innovation. Overcoming challeges. Creativity. That should keep you and your credit union busy!
Today’s blog comes courtesy of Denise Wymore, owner of consulting service for cooperatives, Denise Wymore, LLC.
I love summer. The smell of coconut oil mixing with the smell of a coconut martini while nibbling on coconut M & Ms reading a good book. I’m in Boca Raton as I write this and I just finished my 34th book on my Kindle that I purchased 9 months ago. I am a voracious reader.
So if you’re like me, and you always have a book on hand to read when you’re stuck in traffic, in line at security, getting a pedicure, or in a meeting (just kidding) you need to read these books this summer:
1. Orbiting the Giant Hairball: A Corporate Fool’s Guide to Surviving With Grace by Gordon MacKenzie.
I picked up this book at an ASTD meeting over 10 years ago. I judged the book by its cover (which had an eye-catching doodle on it) and I was not disappointed. It’s written by a former Hallmark cards executive. In a company where creativity pays the bills, he found that the corporate hairball of politics and bureaucracy threatened to choke it off. Sound familiar? If so, you need this read.
2. The Cluetrain Manifesto: 10th Anniversary Edition by Christopher Locke, Doc Searls, David Weinberger and Rick Levine.
These guys practiced social media before there was such a thing. They started a website devoted to people signing a manifesto about the Internet. The books begins with their 95 theses (http://www.cluetrain.com/Cluetrain_10/95theses.html), that launched a movement. On the cluetrain.com site today it simply states, “If you only have time for one clue this year, this is the one to get….
We are not seats or eyeballs or end users or consumers, we are human beings – and our reach exceeds your grasp. Deal with it.
3. Brand Hijack: Marketing Without Marketing by Alex Wipperfurth
Today Amazon.com lists this as a bargain book and is selling hardcopies for only $5.58 so there’s no excuse for you not to buy it. This book also has a very unique cover (which is why I bought it). It’s one of those books that, in my opinion, was way ahead of its time. It gives powerful examples of brands that have been hijacked by loyal devoted customers and the companies who got it and those that didn’t. Let’s just say that if this book was written in 2010 – it would include the crashthegac.com story. A classic tale of brand hijacking.
Party on!
Today’s blog comes courtesy of Shari Storm, Senior Vice President and Chief Marketing Officer of Verity Federal Credit Union. Shari is the author of the new book ‘Motherhood is the New MBA”, available here.
Why The Next Top Credit Union Executive is a Smart Idea
Have you ever had one of those moments where you pause, look around yourself and marvel at how the heck you got there? I had one of these moments in 1997. I found myself sitting in a beanbag chair, in the attic of some University of Washington (UW) student’s house where he lived with seven other guys. I was paying him $50 to take all of my VHS tapes that I had hastily pressed “record” on whenever I raced home from work after being interviewed. He was assembling them into a compilation for me.
That was well before Craigslist. I can’t remember now how I found him. I think I went to UW’s media center and put a note up on their bulletin board that I needed VHS dual recording help – pronto.
The reason I found myself sitting amongst stinky pizza boxes in some random guy’s attic was because I wanted to impress Bill Hayes. Bill was the President of NW Federal Credit Union. He had interviewed me twice and I had met his executive team. I knew I wanted to work at his credit union. My resume was light on marketing and I had never worked in the financial industry. I was 27, applying for a top management job. The odds were kind of against me. But I knew I’d done one impressive thing – I had been interviewed 72 times at my prior job.
So I decided to put a sampling of those interviews on a tape, drop by his office and ask him to watch it. I thought it would make me stand out.
It did make me stand out. I got the offer for the job the next day. It impressed him too. He’s mentioned it at my five-year and ten-year anniversary that I’m the only job applicant who has ever given him a video (Leaving much of the staff wondering…lucky for me nobody has VCRs anymore!)
There are three critical elements to landing that job you want, getting a book deal or anything else of that nature.
1. The willingness to put yourself out there – to do things that might make you stand out amongst the others – or might make you look silly. It’s a risky proposal and it’s never comfortable.
2. The creativeness to set yourself apart from others. It’s one thing to be bold enough to put yourself out there. It’s a whole other thing to have the skills to figure out how to do it right.
3. A strong network. It wasn’t just that video that landed me my dream job at NW (now Verity). A current executive of the credit union recommended the position to me and I was able to find references that Bill knew and trusted.
I admire CUES Next Top Credit Union Executive challenge because it does such a great job of demonstrating the need for those three elements to get ahead in any field of work.
If you are in the industry and you’ve been online this week, someone has probably asked you to vote for them. In my opinion, every candidate in this challenge has proven that they can do #1 (mentioned above) better than all of their counterparts not in the challenge. A few of the candidates, like my own Tina Hall, have demonstrated their ability to do #2 and creatively set themselves apart from the competition.
Click here to see Tina’s video.
And next week, we will see who has the strongest network.
I encourage you to check out the site and to vote. It took a lot of courage to post a video. If you’ve never done it, you have no idea how scary it is. All of these candidates are sure to make something of themselves, regardless of whether they win the challenge or not. I’m proud to have so much talent in my industry.
Filed under: Survey, Uncategorized | Tags: credit unions, statistics, survey monkey, surveys
I promised that I would post a follow-up to the survey I ran last week and I think I have enough material to actually milk it for another post. For starters, I only received 22 responses. In order to have a meaningful survey, you really need 370 responses.
Here are the results:
Profitability and growth scored well. In a time of NCUA assessments and slow economic recovery, that makes sense.
Now we have no way of knowing who is answering these questions. Could it really be directors? Perhaps. The responses seem likely enough: strategic plans and coming to grips with changes are significant issues.
For all of you who answered this question, I highly recommend David Allen’s Getting Things Done. I’m serious. As far as I’m concerned he invented an unbeatable system of organization that will help you tremendously.
We actually had someone skip this one. It seems to be a toss-up but you should never underestimate convenience and how much people are willing to pay for it. Or using convenience to bring members into the credit union. For some reason this made me think of coin counter machines that are so popular with smaller credit unions.
So that’s my first foray into surveys and using Survey Monkey. If nothing else, it’s kind of fun. I may do more of this although frankly, it’s probably better suited for the trade pages and blogs that have a big enough audience to actually get close to a statistically signficant sample.
Filed under: Fraud Prevention | Tags: credit unions, Fraud Prevention, indicted, mules
by: Robert Rutkowski
When a person acts as a middleman for a con artist or grifter, plays stupid when the police get involved and then avoids prosecution because of lack of intent, it makes me crazy. To me this middleman, or mule, is essentially acting the same as someone driving the getaway car in a robbery. It bothers me so much, I made a video on how to spot mules a couple of years ago. Some of these people even avoid civil liability via bankruptcy!
So when I saw this Wired article yesterday, I was thrilled! The article says that this may be one of the first cases against mules despite the fact that mules are involved in hundreds of millions of dollars of fraud every year. In this particular case, it’s alleged that money was stolen from a third party’s account and then funnelled through the mules accounts to launder it. Usually what happens with respect to credit unions is that the mule presents a bogus instrument across the teller line and then tries to quickly wire out fund or get a credit union teller check issued to a third party who absconds with the money. The mule is almost always left behind to face a civil suit by the credit union but can avoid paying by filing bankruptcy: again claiming that the theft should be dischargeable because the mule did not intend to steal the money.
I am very hopeful that jurisdictions across the country start to follow California’s lead and seriously question a mule’s claim that he or she had no idea that the underlying activity was fraudulent. In 2010, this should not be a valid defense. Being paid to cash checks for another person is not a legitimate business activity!
