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Financial Horror Stories II

Some are ready for some football. Readers of The Wealthy Accountant blog are ready for some FINANCIAL HORROR STORIES! #Halloween #horror #horrorstories #football #Money #disasters #scarystories #fear #goblinsIt all started innocently enough. Stories were rolling around in my head so I decided to publish financial horror stories from my office for benefit of the readers. It turned out to be one of the most popular posts of the year. People, you see, love a good horror story. And now that Halloween is upon us it is time for another set of financial horror stories. So hide beneath the covers and read this with a flashlight. 

Horror stories are always fun. Everyone loves a good scare. There is a biological reason we need these scary stories so much. It’s because we learn the most when things are worst. Success breeds arrogance. Soon we mistake luck for skill. It is at this point where we get our head handed to us.

Smart people are eager students of the fallen. Over the years I shared many of my personal failures. In the previous “horrors” post I shared a few to make your hair stand on end. Today I will make your blood curdle.

But this time we at least get one good ending.

 

Audit Nightmare

Letters from the IRS scare the bejesus out of taxpayers. Unless you can see a check through the envelope window it is doubtful it is good news.

Office policy is straightforward. When a client comes in with the nasty-gram from the IRS (or state taxing authority) we immediately get a power of attorney (POA). Once the POA is signed we contact the taxing authority to get what they have and determine what they are looking for.

Income tax audits are most feared. However, the real audits that require a fresh Depends are the state sales tax audits. Sales tax has so many moving parts and is so complex it is virtually impossible in many states to avoid running afoul of the rules. Wisconsin is one of those states.

A longtime bar owner client received a special letter from the Wisconsin Department of Revenue (WDOR) for a sales tax audit. Bars are pretty straight forward so I didn’t expect many surprises. 

WDOR loves to visit establishments prior to sending the audit notice. The skunks, ah, I mean very professional and nice auditors gather information for an accurate audit assessment in advance.

Tax audit horror stories. Don't be afraid of the dark; be afraid of the IRS letter. #Halloween #audit #taxaudit #horror #horrorstoriesIn Wisconsin there is a special gambling rule. Bars (and certain other establishments) can have up to 5 slot machines (video gambling machines). Most bars and restaurants in my area use Amusement Devices out of Green Bay. Amusement Devices provides the machines, collects the money and pays out the profit share to the business owner. The business owner does have to report the income and pay sales tax.

Unfortunately, my client somehow ended up with 6 machines. This is really, really bad.

To make it worse, the sixth machine was owned by the bar owner (ahem) and the income was not claimed, nor sales tax paid. 

WDOR had my client by the throat. They threatened to pull his bar license. 

They tallied the damages and penalties. It ended up around $40,000, payable yesterday.

WDOR was not impressed by my POA. My reputation preceded me. The auditors from Madison did not possess a sense of humor. They informed me my client needed to pay the balance due within 30 days or face closure. My client was scared for good reason.

I pulled my client to the side and asked if he could pay at least $28,000. He said if he cleaned everything out he could just make that payment.

I turned back to the auditor (there was actually three big ugly, ah, professionally dressed guys handling the shakedown, I mean audit) and said, “My client is a cash basis taxpayer. He hereby elects to be treated as an accrual basis taxpayer going back to the first year sales tax and penalties are assessed. He will also elect the same on his federal tax returns. The refunds on the federal and state income tax returns will leave approximately $28,000 after refunds. He will pay that amount immediately.”

Were the goons professionals from the state tax office mad! If looks could kill I would not have been identifiable at my funeral. They wanted to make an example out of my client in the worse way and I cut 30% off the top with a single sentence. 

They huffed and puffed, but backed down as they knew they must. (I’m not against filing a court petition if the government steps outside the letter of the law.) They left.

With severe words from me I impressed upon my client to have his payment in the mail TODAY! He did and all went well. He is still a client to this day.

Let me explain what happened under the hood with this financial nightmare with a somewhat happy ending.

Most small businesses are cash basis taxpayers. This means they report income when received and deductions when paid. An accrual basis taxpayer reports income when earned, regardless if received, and expenses when owed, regardless if paid. 

Businesses with an accounts receivable higher than their accounts payable always want to be a cash basis taxpayer. If the payables are higher than the receivables then you want to be an accrual basis taxpayer. 

Taverns are cash and carry businesses. They might have some accounts payable, but rarely do they have any accounts receivable as patrons pay as they drink. As a result, changing from cash to accrual was a non-event, except for this little audit issue going on.

WDOR was so irritated because by changing the accounting method both the tax AND penalties were reduced. I caught them with their fly unzipped and they had no recourse.

This is a one-time trick. Switching to accrual from cash is automatic and IRS (or WDOR) approval is not needed. However, if you want to switch back to cash basis you need permission and really good reason for doing so. Sometimes I can pull a rabbit out of my hat. And sometimes that trick is a one-act show. You go to the well again at your own peril.

For the record, my client has 5, count them, 5 slot machines in his bar, all run by Amusement Devices. I am pleased he was a fast learner.

 

Enough to Make You Sick

It is hard for me to even comprehend this financial horror story. 

In the early 1990s a client who worked as a janitor at a local hospital made two trades in his mutual fund and destroyed almost all of his gains from the preceding 15 years.

This young man was a long-time client. He started investing in Fidelity’s Magellan Fund, managed by the investing legend Peter Lynch.

Lynch managed an impressive 29% average annual return while he managed the Magellan Fund from 1977 to 1990. 

Financial horror stories can teach us lot. Prevent disaster before it strikes. Learn the lessons of those who failed before. #horrorstories #horror #financialhorrorstories #Halloween #scary My client started investing around 1980. When the stock market crashed in 1987 he panicked and sold. Once the market recovered he bought back in. 

I reviewed his decisions with him when I prepared his tax return, encouraging him not to sell when the market sells off. 

In the early 1990s the first Iraq war gave the market a jolt. Once again my client panicked at the market bottom. When the market recovered he felt it was time to buy back in.

Again I reviewed these decisions with my client over his tax return. He should have enjoyed at 20+% average annual return (if he did nothing), but because he sold twice in a panic his return averaged just over 2% per year on average. Money market accounts at that time did better. 

I did my best to deliver the news (and lesson) with gentle hands. But I must have been too harsh. The client never returned.

To this day I remember vividly the actions of this client. It has always been a reminder to never time the market. And never get scared out of a market when it declines, especially if you are in broad-based index funds (or even actively managed mutual funds). 

A stellar performance was turned into a return worse than money markets produced back then. The lesson always stayed with me: two simple mistakes over 15 years can wipe out decades of wealth. 

I lost a client and gained a valuable lesson. I had to try to help my client; it was my duty. The client left. That was his choice. I made more money from the lesson he provided than my business has produced in profits since that time. The lesson is that powerful.

 

No Horsing Around

This financial horror story will be told in videos. I’ll give some details, but the videos give more details.

It is possible to commit no mistake and still suffer from a financial horror story as the story of Rita Crundwell shows. 

Here is the trailer to the documentary of her embezzlement:

 

 

Crundwell was the treasurer and controller of the small town of Dixon, Illinois. Over 22 years she embezzled around $53.7 million. She used the money for her horse business.

The damage was extensive as the link in the above paragraph shows. Services were cut, wages froze, budgets cut. Money was borrowed to cover the budget shortfall. All this will be paid, plus interest, by the people of Dixon regardless the fact they are innocent victims. The damage will last far longer than the 22 years the embezzling took place. 

A major accounting firms signed off on the municipalities finances. Taxpayer protections were nowhere to be found. Never feel comfortable. Hold your government accountable. (Yes, I take affirmative action in my townships finances. We also have a really big nest egg, too. You can do this by reviewing the published financial reports and calling out inconsistencies.)

Some money was recovered as this video shows:

 

 

All the Queen’s Horses is a fascinating documentary covering the story in detail. You can purchase the documentary from Amazon (affiliate link) or borrow from your library. 

Rita Crundwell may have pulled off the largest municipal fraud in history. Local residents didn’t even know it was possible to misappropriate that much from such a small community. The fine people of Dixon will pay for Crundwell’s crime for a very long time.

 

Financial horror stories come in all flavors. It can be as simple as one or two foolish market timing trades over a decade or an attempt to pull a fast one on the government and getting audited. Some are hard to avoid. When a local government suffers a loss the whole community pays the price.

In the case of Crundwell the warning signs were there, yet nobody took notice for two decades. Even those close to the situation didn’t notice until the very end things had gone so wrong. You might be in a position to protect your community. Do not abscond your duties.

Breaking the law never ends well as we saw with our bar owner. Audits are a pain. Giving the government ammunition to disrupt or even destroy your life’s work and finances is insane.

 

Stephen King has made a career out of scaring people. It is all fun and games until someone pokes an eye out. Learn the lessons from those who made poor financial decisions and lost. Don’t let their horror story become your reality.

Happy Halloween. Spend, save and invest safe.

 

 

More Wealth Building Resources

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

Financial Horror Stories

PROTECT YOUR CASH!!! Investments too good to be true are. Learn the language of business before investing. #accounting #investing #Buffett #WarrenBuffett # money #cash #realestate #stocks #alternativeinvestmentsMy office manager, Karen, sat with a new restaurant client. Ten minutes later Karen was in my office with the financials of the client.

“She doesn’t understand why she is losing money, boss,” Karen said. “She says business is good, but she loses money every month.”

I looked at the profit and loss statement for less than ten seconds when I asked Karen, “Is this correct?” 

Karen named the bookkeeping firm the client used. It was a reputable firm. Karen said the client reported all income daily and reported it to the bookkeeper. The bookkeeper paid all the bills and provided a statement each month.

If the P&L was correct there was only one explanation. “One or more of her employees is embezzling.”

“Can you talk with the client?” Karen didn’t know what to tell her.

I went to Karen’s office and explained to the client she had at least one employee embezzling. 

“How do you know?” she asked.

I held up the P&L. “The cost of goods sold compared to wages compared to revenue are off. Someone is either walking out the back door with steaks and seafood or someone is stealing cash receipts.”

The client assured me she had honest employees. With only a glance at her financials I was certain there was malfeasance. 

“It might be a waitress. Do people leave money at the table or take it to the checkout person?

“Checkout person.”

“Okay, it probably isn’t her because the amount is too large. And while steak and seafood might be walking out the back door, the cost of goods sold is somewhat in line with employee wages. It is revenue that is off. 

“So tell me, do you have a security camera on the cash register?”

She told me she had no security cameras. 

“The employee at the cash register might be the problem.

“No,” she said. “That employee has been a friend since we were in kindergarten.”

That was all I needed to hear. With rare exception, embezzlement comes from people you trust the most. Either a family member, close friend or the faithful employee who hasn’t taken a vacation in eight years. There is a reason accountants demand business clients require anyone in their business handling money to take a two week vacation every year. You would be surprised how much embezzlement is uncovered when someone is on vacation.

“Your friend is robbing you blind,” I confirmed.

She still insisted her friend would never steal from her.

“Okay. This is what I want you to do. Go back to your restaurant and call a meeting with your employees. Tell them your new accountant is a real a-hole and demands a security camera be placed over the cash register.”

She did as I asked. Her friend since kindergarten quit on the spot. And profits arrived for the first time at her restaurant.

Unfortunately the theft had gone on for too long and the financial damage too great. A year later she closed her restaurant, deep in debt.

 

Warning Shot

A few weeks ago I published on the Fleecing of the FIRE Community. Some readers were irritated while others were concerned. I wrote things like:

Since you managed to acquire a respectable nest egg you think you are an experienced investor. It is doubtful you are!

and

Buying into an unconventional investment, which these bike communities are, should never happen unless you are very experienced financially and have the ability the lose 100% of your money without changing your lifestyle one iota.

and

You have no idea of some of the people on my desk I’m helping. These are serious issues; small fortunes completely destroyed unless I can find a way to preserve their wealth. I don’t always win.

When I published:

To keep this short I will close with one last suggestion. If you can’t read and interpret financial statements like a seasoned accountant you have no business being in any kind of exotic investment, real estate included. Stick to index funds and money market accounts.

You might not shoot the moon, but you will not suffer a catastrophic loss sending you back to square one, as a neophyte in the FIRE community once again.

people wanted to hear some of the horror stories, hoping to learn from other’s mistakes. 

I stand by my original advice: Don’t invest in things you know nothing about. If you can’t read a financial statement how will you understand if a rental property is a good buy? Or a business?

The next time you are tempted by a slick sales pitch at a conference (this is being published while FinCon is running in D.C.) or camp, come back and read a few of these true stories. Names are changed to protect the guilty (yeah, I think I’m funny); the stories are all true.

 

Supper Club

I have a group of clients that own several businesses around town. Two from this group with several outside investors own a supper club near my office. They called me in to handle taxes and consulting. It was bad from the start.

Once they bought the supper club they hired a manager. This was a guy they knew from running some income properties they owned. 

The manager and his wife handled the books.

The club was open for a bit before I was called in. I would review the books monthly and consult before preparing the annual corporate tax return.

I was to meet with the manager. When I arrived it didn’t take long to know something smelled bad. From the front door to the bar was all it took for me to know embezzlement was rife.

The bartender game me a cold attitude. There is no reason an employee of a business client should ever give the accountant an attitude. This told me the employees knew or suspected the malfeasance. The environment was bad.

I was shown to the office where I waited as the manager was running late.

I noticed a gap in the security cameras between the back office where I was and the safe. 

When the manager arrived he was livid. He made it clear I was never to touch the books unless he or his wife were present.

After the meeting I called one of the owners. I told him he had serious misappropriation of funds issues. I told him it was the manager bleeding him dry.

I was assured the manager was a good guy. I pointed out:

  1. The bartender’s attitude was unusual to see. Employees should care less if the accountant shows up. They should have been more interested in serving me a drink, hoping for a tip.
  2. The security camera gap between the office and safe was a serious issue.
  3. Any manager who is that adamant the accountant not see the books without supervision is practically an admission of guilt. There is only one reason to control what the accountant sees.

I knew who was embezzling (manager), where they were doing it (security camera gap near the safe), when they were stealing the funds (at closing the manager or his wife handled the money with no oversight) and how much (I estimated between $100,000 and $150,000 based on revenue).

When I was not taken seriously I said I was not interested in the account and hoped it would not affect my work on their other accounts. 

A year later one of the owners was in my office. It seems I was wrong. The manager was embezzling just as I said he was, except he misappropriated at least $300,000.

I reminded my client he probably did the same when he was managing their rental properties which always seemed to lose money, too.

 

Fish Farming

The moral of the first story is: If you can’t read a financial statement you have no business being in business.

The moral of the second story is: When your accountant’s BS alarm goes off, listen.

Invest in what you understand. Know your circle of competence. It is better to pass on a good investment than to invest in a bad one you don't understand. #stockmarket #business #sidehustle #sidegig #investmentsIn the second story the business survived and even later thrived. (Though I never got the account, but never lost the accounts of their other businesses.)

Now we turn to an income property story.

This didn’t happen to my client. I was a member of the Fox Cities Apartment Association many years ago when I owned a massive amount of real estate when I heard the story.

It seems a neophyte watched late night TV when he discovered he could be a gazzillionaire buying income property no-money down and cash flow right out of the gate. 

This guy bought an up/down duplex, filled the unit and enjoyed his new-found cash flow machine. 

As winter approached the tenant called and said the furnace was not working. The landlord went over to see if he could fix the problem without calling an expensive technician. 

When he gets to his property he finds the problem right off. The basement is filled with water!

It seems the tenant wanted to raise fish. Thank God he didn’t fill the basement to the electrical panel.

The foundation of the building was shot. Insurance didn’t cover the damage because it was the tenant’s fault. The landlord sued the tenant and won, but the tenant had no money and later disappeared. 

The city condemned the property and the bank foreclosed and socked the landlord with the shortage when the bank sold at a fire sale price. The landlord later declared bankruptcy. The stress destroyed his marriage. He lost his easy money investment, wife and had to pay 29% of his gross income in child support. I have no idea how he ever recovered.

The morals of this story are:

  1. Income property is NOT easy money,
  2. Always screen your tenants (his tenant had prior litigation with landlords),
  3. Always check your property, even if you have a property manager. An annual (or more often) personal inspection is a requirement in my opinion,
  4. Alternative investments, including income property, require a reserve to handle maintenance and excess damages, and
  5. No-money down deals are rarely a great deal. They are desperate deals.

This guy did everything wrong. He bought a crap property which attracted crap tenants. He put no money down and had no reserve, He never screened his tenants or inspected his property. What did he expect would happen?

 

Bad Advice

Some readers might notice I have no hair. It’s because I pulled it all out.

What non-bloggers might not understand is that bloggers can see when other blogs link to their site. Usually I’m curious to see what is said; usually I’m sorely disappointed.

For example, a blogger once published she never has an LLC for her income properties and linked to this post of mine as her reasoning. It was a 100% misunderstanding of what I said!

I have no problem with, and even recommend, income properties be held inside an LLC. What I also say is that you should never place real estate inside an S corporation or LLC electing to be treated as such for tax purposes.

The post this blogger linked to is about small businesses and not real estate so she read it all wrong. Which leads us to our last example so I can take an aspirin to dull this throbbing headache resulting from pounding my head into the corner of my office.

 

When it rains, it pours. I’m not talking salt either.

Last summer I had two consulting appointments with the exact same issue: income properties inside an S corporation. 

Since I could kill two birds with one stone I tried my darnedest to find a solution. I even hired a law firm in California to help. Alas, nothing could be done. Once real estate is inside and S corp it stays there, regardless the negative consequences. 

No-money down real estate is rarely a good deal. Usually you are buying something with lots of problems that is hard to sell. These steps can point out the ones that are really a bargain. #realestate #investing #nomoneydown #investment #goodinvestments(If you transfer real estate from an S corp to an owner of the S corp it is still treated as a sale at fair market value, triggering a capital gain (or loss). )

There are several reasons why you should never, ever, ever put real estate inside an S corp or LLC electing to be treated as an S corp. 

First, if the S corp spent any time prior as a regular corporation (C Corp) it probably has accumulated earning. An S corp with any C corp accumulated earnings and 25% or more of the S corp’s earning are passive (rent, interest, dividends), the S corp is taxed at the highest C corp rate.

I know that is a mouthful and a lot of details are disregarded. (It’s actually more complicated than that tongue twister indicates.) Regular corporations now have a flat 21% tax rate so it might not be as bad as it once was. Still, it causes an S corp—a vehicle for managing a business with fewer taxes—to be taxed at the regular corporate rate.

It also adds complexity to the tax return. Good for the tax professional (if he can keep his sanity); bad for you.

This problem is easily avoided by going straight to an S corp which many do.

The real problem—and this is a big one—involves basis.

I know basis is hard to understand, but it is of vital importance here. 

Most people understand they have basis in their S corp if they invest money into their business. What is harder to understand is how loans affect basis.

S corps are unique in that loans by the corporation do not add to the shareholder’s basis unless the loan is from the shareholder. Even if you guarantee a loan taken out by the S corp it does not add to basis!

We will not bog ourselves down today on S corp basis nuances so don’t take my next statements as complete answers; they are not.

The two clients I consulted (and latter prepared their tax returns) have serious S corp basis issues because they had real estate in their S corp and the S corp took out loans. 

When this happens it is possible to show a loss (real estate depreciation can cause a loss while still cash flow positive) and use up basis. When that happens it is possible in some circumstances to pay a capital gains tax on distributions when the S corp shows a loss. 

Accelerating depreciation can really complicate this issue. Current tax law allows faster depreciation in some instances. Repairs and improvements are deducted easier now. And cost segregation studies can super charge depreciation deductions.

When real estate is in an S corp you always have to keep an eye on basis from the corner of your eye. 

Nothing is worse than paying taxes on losses! And it can happen in an S corp when the rules are not followed.

The clients’ intentions were never to break tax laws either. They did what they thought was correct or might have even read some tax articles and misunderstood the complex issues surrounding S corp taxation.

To fix this problem I’m working with the client to verify all loan are from the shareholder. Loans are structured so the shareholder takes out the bank loan and lends the funds to the S corp. That does add to basis! (This is the opposite of what banks do so they have to be told the consequences. If they don’t listen, get a different bank!)

The moral of this story is: Always seek the counsel of a competent legal and tax professional before buying real estate and/or starting an entity.

I know people around here love saving money, but you don’t save when you make a serious tax error. A small investment in an attorney and tax professional can yield massive returns and peace of mind. 

 

Coda

Warren Buffett once recommended you focus less on business school and more on taking a few accounting classes. I couldn’t agree more.

You can’t make an investment or run a business optimally without understanding the language of business: accounting. 

While business classes are great, a fundamental understanding of accounting will serve you in every facet of your life: personal finance, investing, work, side hustle, small business.

You would be surprised at how many people doing their own books record loan payments as an expense. (The interest portion of the payment is an expense; the rest is principle which is recorded against the liability on the balance sheet.) If something as simple as this is not understood, how can you possibly trust your judgement in running the business or in any investment decision?

My original comments are correct: People have no business making investments in things they don’t understand! My buddy Warren has said at least a googolplex times. 

All these crazy ideas brought to conferences and the various FI camps are accidents waiting to happen. You can make informed decisions when you understand the language. You, like me, might enjoy making small investments in strange products just to see how it works and plays out. Nothing wrong with that as long as you understand what you are doing.

Making large investments without understanding the investment is insane. Index funds and bank deposits are what you should limit yourself to if your accounting knowledge is limited. In fact, you shouldn’t even listen to any investments offers. All that could happen is you get sold and then God help your net worth because no one on the earth will. 

It is also never too late to learn. Colleges and tech schools around the country have superb accounting classes.The great news is accounting has been around a long time is and virtually unchanged in that time. You don’t need a prestigious college for a good accounting education. Even local night classes will make you a better investor.

 

It is temping to think you know more than you do when your stash grows. Success gives the illusion of intelligence. When the crisis arrives the illusion evaporates. 

Please, kind readers, use common sense. If you don’t fully understand the concept and the financials then take a pass. Better to miss a deal than to go all-in on a scam.

 

 

More Wealth Building Resources

Credit Cards can be a powerful money management tool when used correctly. Use this link to find a listing of the best credit card offers. You can expand your search to maximize cash and travel rewards.

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

I Received a $1,980 Check on My First Secret Shopper Assignment

Hey der kind readers. Dis is da welty accountant from way up nort der hey where it gets darn cold in da winnertime. Payin all dos heatin bills is a might painful here in Phuket, Weeesconsin, sometimes known as Nowhere, Weeesconsin so extra side income is always welcome.

Mrs. Accountant does her best to contribute to the family budget by cookin and cleanin whenever the work shows up. She is the kindest thing to ever walk God’s green earth and proves it by sending your favorite accountant with a brown bag lunch to work every day to save money.

She also likes to do surveys online for some extra cash. Well, da udder day she discovered a way to make some real money. I’m not talking small potatoes like selling weed or anything. I’m talkin big time!

She got herself a heck of a side hustle as a secret shopper! Yup. Da missus done got herself some serious job now. And as you can see from da picture of the check above, da missus sure cleaned house (haha, pun intended) with her first job.

Sharing da Experience

I wanna share da experience we had wit dis secret shopping job. Above you can see da first part of da letter dey sent da missus Priority Mail. Des guys don mess around! Dey spent some serious money to get dis to us fast.

I broke da letter into two pictures so you can see what it says easier. I’ll go through the process so you can join in on this awesome side hustle.

First of all, we got da check in da same envelope. Des guys don’t sit on der hands. When dey give instructions dey back it up wit cash!

First thing we had to do was deposit the Cashier’s Check in our bank. Well, right away I knew somethin was wrong. I’ve seen des checks come through the office now and again and know from experience des guys bite off more than they can chew. Sometimes der checks don’t clear right away. Too many secret shoppers, I guess.

Click to enlarge.

I did some leg work (not the leg work I do at the gym, by the way) to verify des guys were ready to rock. A quick internet search revealed the first problem. Their check had the wrong routing number. Personally, I’d fire da guys who printed the checks wrong!

The next thing I knew was dat Kenneth Ginola guy no longer worked at Whitney Bank. Hard ta chew somebody’s tail if he ain’t der no more! They musta taught I was some stupid country bumpkin.

This wasn’t going to work. Des guys might not mess around, but dey are sloppy as hell. Don’t dey know I can’t send’em money I don’t have?

Well, the bottom half of the letter told us where to send our experience report. Once again it was sloppy work. I sent an email to both addresses provided. They came back undeliverable. No worries, mate. They used an online account to print the postage. I tracked it back to the sender, Jose Ceda.

I called Jose and told him I was excited about da offer he sent da missus, but he might wanna be careful and all with our current President’s dislike for most people named Jose. Just sayin.

I also told Jose about da sloppy work and that I still wanted to work wit da guy if he cleaned up his act.

Before long I knew des guys were bush league. They wanted da missus to send some of da money back with a Moneygram and something called a Walmart2Walmart thingie. I never heard of dis stuff so he explained it to me.

Click to enlarge.

Of course da missus messed it all up. We biked over to Wally World and tried to get the Moneygram to dat Anthony Reyna guy in Houston and the udder guy, Gerald Chaffman, also of Huston.

Ah, it was frustratin as getout. Finally I threw up my hands and walked out and called Jose back. (BTW, he had a very pleasant voice and spoke mighty darn good English for a guy from Eastern Europe.) Anywho, I finally convinced Jose to just give me his banking info so I could wire him his money back. I never saw a guy so happy to get out of a deal in my life.

He gave me da bank info. After hanging up da phone I decided it would be da Christian thing to do to still try to get dis to work. After all, we did give our word and we still had the cashier’s check.

Wat I did was use Jose’s bank info and ACHed da money outta his account and into mine. Strange how smooth money transfers when you get all da numbers right. You can always trust your friendly accountant to get da job done.

As you can see from da letter, we are supposed to keep $270 for ourself, $370 if we get da job done in a day. Well, all da dickin around took more than a day, but I said f@*ck’em, figuring da missus deserved da bonus for all the extra work we did.

Before we could send Jose some of his money back we got an email from Jose. (It still amazes me how much stuff they know about a guy these days.) Jose was upset we withdrew $1,980 from his account instead of depositing it. All I can say is he wasn’t as excited as he was before.

The madder he got the more Russian he sounded. I promised Jose I’d personally see to it da missus would complete the secret shopper assignment.

We didn’t actually return to Wally World, but figured we could just make some of it up since Wally World is the only place to buy supplies for a hundert miles in any direction. (Welcome to Phuket!)

I sat down with da missus and worked through the twelve questions we were supposed ta answer. Most of da questions were stupid. Darn near got in trouble when I knew the name of the cute cashier over at Wally World. Dang Jose.

Question 8 was also a problem. Ya see, in backwoods Weesconsin we rarely use the restroom facilities. Normally we just walk out behind Wally World when we need to water the horse.

When I got done sendin Jose the answers to his questions I decided it was such a hassle I wasn’t going to send Moneygrams or other such crazy stuff. I kept the money! I know it’s not da Christian thing to do and all, but for the record I haven’t been to church in God knows how long. (Actually, God might have a hard time remembering the last time I visited for dinner.)

One last thing. I highlighted in yellow the last message on the secret shopper instructions. I am EXPRESSLY FORBIDDEN to disclose this information to anyone.

I won’t tell anyone if you don’t.

Time to Get Serious

Kind readers, I made a joke out of a serious issue harming numerous people every day. Mrs. Accountant does surveys and recently did a few secret shopper projects.

The letter, check and mailing label above all showed up a few weeks ago. We think it came from a Swagbucks offer.

Normally I throw stuff like this out, but decided to write about it. I could have explained the situation and ended with saying, “DON’T!” Instead, I wanted to take a different approach. We are constantly warned of these types of scams. The fact that they are still active means they probably work and many people are getting hurt!

The story above is made up. I took the situation and turned it into a joke. However, it’s no joke to those victimized by these criminals.

There is no doubt in my mind the cashier’s check is bogus. Because I’m writing a blog post I did some research. There really is a Whitney Bank on Johnston Street! But the check is bogus. The check is printed on check stock you can buy online or at Office Depot. A quick call to the bank and it becomes clear this is a scam.

The poor and elderly are most vulnerable. The people least able to suffer the loss are the best target for these scumbags.

Here is how the scam works in a nutshell. They send you a cashier’s check with instructions to deposit the check at your bank, withdraw the money and forward some of the money to the scammer via some type of wire transfer. They tell you to keep a portion as your reward. Later you discover the cashier’s check was bogus and you are out the money.

Today in the office (I’m writing this the day before publication) a client came in with a stack of papers, victim to a similar type of scam. In his case it was a new client of his business who needed extra cash so they used their credit card to withdraw money. They then sent it to another bank account. Later the credit card was discovered stolen and they are now out the money.

If you ever see anyone in a situation where they are asked to deposit a check or credit card payment and send the money to another account, please stop them and call the police.

Have a serious talk with elderly parents and grandparents. Talk to your children. Warn friends and family of the signs something isn’t right. There is no reason to take a check, credit card or any other means of payment and forward it to another account. Ever!

If anyone you know thinks this kind of thing is legitimate, yell at them at the top of your voice,

“DON’T!”