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Is my DEFINED BENEFIT PLAN safe if my employer goes out of business? – Asset Protection

May 16, 2012 By Leave a Comment

If your employer goes out of business, any retirement plan your employer sponsored will be terminated. If the plan is a 401(k) or other defined contribution plan, your benefits are held in trust, apart from your employer’s assets, and you’ll generally be entitled to receive your full account balance in a lump sum. (You can take the cash, or roll your payout into an IRA or another employer’s plan.)

But if your employer sponsors a defined benefit plan, it gets a little more complicated. A defined benefit plan promises to pay you a specific monthly benefit at retirement. While defined benefit plan assets are also held in trust (or insurance contracts), apart from your employer’s assets, whether a particular plan has enough cash to pay promised benefits depends on your employer’s contributions and the plan’s investment earnings and actuarial experience.

When a defined benefit plan is about to terminate, the Pension Benefit Guaranty Corporation (PBGC), a federal agency created specifically to protect employees covered by these plans, is notified. If the plan has enough money to cover all benefits that participants have accrued up to the plan termination date, then the PBGC will permit a “standard termination,” and your employer will either purchase an annuity from an insurance company (which will provide lifetime benefits when you retire) or, if your plan permits, let you choose a lump-sum equivalent.

However, if the plan doesn’t have enough money to pay all promised benefits earned up until plan termination (that is, the plan is “underfunded”), the PBGC will take over the plan as trustee in a “distress termination,” and assume the obligation to pay basic plan benefits up to legal limits. For plans ending in 2012, the maximum annual benefit (payable as a single life annuity) is $55,840 for a worker who retires at age 65. If you begin receiving payments before age 65, or if your pension includes benefits for a survivor or other beneficiary, or if your plan was adopted (or amended to increase benefits) within five years of the termination, the maximum amount is lower. According to the PBGC, only 16% of retirees in recent years have seen their benefit reduced because of the annual dollar limits.

 My thanks to my friend Mike Stolp, Managing Member CFO Financial Advisor Network, for sharing this info and alowing us to use it here.  Contact Mike and his advsiory team at 800-283-2468   or learn more about him here: cfofa.com
Filed Under: Bankruptcy, business legal planning, CEO, closely held business, defined benefit plans, doctor sued, family business, financial advisors, FINANCIAL ISSUES FOR DOCTORS, financial literacy, high net worth, investment exposure, Legal Strategies, liability Tagged With: , , , , , , , , ,

Asset Protection & Investing; What’s Your Defensive Position?

September 27, 2011 By Leave a Comment

I’m not a financial advisor but I work with some of the best ones in the United States because they often have clients that understand the finite and fragile nature of wealth and that we must take proactive steps to protect it. 

One of the top financial advisors I regularly turn to for solutions and answers on insurance and investment issues is my friend Jeff Christenson of Christenson Wealth Management in Phoenix Arizona. Jeff has been an exceptionally important part of the planning of many of my clients, and many more who are not, and works with a very demanding group of people that like all those we work with are substantially more concerned with loss than growth.  Jeff is one of the people that for years insisted that even his HNW clients save for a rainy day, protect their assets and use strategies that limit losses – the last ten years have made his clients loyal believers… many of them survived the losses of their income and businesses by using these assets.

Below is a recent commentary on the markets that Jeff shared with me. His position is honest, open and frankly brave given the very strong opinions many people have on these issues. I hope your investment strategy and advisors have taken these issues into account. I’ve shared Jeff’s message in its entirety. If you’d like to know more about him or receive his updates directly, see his firm’s contact information below. – Ike Devji 

Jeff Christenson, President Christenson Wealth Management

Dear Friends and Clients, 

I have moved, or will be moving, most portfolios to a defensive position. 

We seem to be skating on thin ice, with our economy, our government, and our national deficit. 

This can be viewed as a “contrarian indicator” (for markets) but I think it is actually just ….. bad. 

It is my opinion that the Fed and the President don’t know what to do about the economy, jobs, entitlements, and the staggering debt that could DOUBLE in less than 10 years. 

We were downgraded as a COUNTRY for our own borrowing purposes.  This has never happened.  The short term results can be neutral to unthinkable… 

There are many people and businesses that are just barely hanging on, month to month. 

Gary Shilling believes home values will FALL another 10-20% to simply regress to the MEAN.  Many homeowners are living in their homes without paying their lender.  I have 4 good friends who just went bankrupt.  Who will pay for that?  How many more? 

Gold…..be careful, too many people interested in it right now.  It may also double again, but it is indeed speculative    

The middle class has shrunk, and there are now fewer people with more money, than ever before.  These people are currently sitting tight on that cash. 

Inaction is the wrong thing as a country and as an investor. 

There are things you should be proactive about, asset protection and conservative financial strategies are certainly 2 of them.  

I feel we are EXACTLY where the FED and the President were hoping we would NOT be 3 years after the financial meltdown.  

I recently came across an interesting article* that simply illustrates our government’s fiscal problems by comparing the 2011 Federal Budget to a typical middle-income household’s budget.  Here are the results: 

U.S. Tax revenue:     $2,170,000,000,000 

Fed budget:                 $3,820,000,000,000 

New debt:                    $1,650,000,000,000 

National debt:             $14,271,000,000,000 

Recent budget cut:    $38,500,000,000 

Let’s remove 8 zeros and pretend it’s a household budget: 

Annual family income:                                      $21,700 

Money the family spent:                                 $38,200 

New debt on the credit card:                         $16,500 

Outstanding balance on the credit card:    $142,710 

Total budget cuts:                                               $385  

The harsh reality is that our current level of productivity (or lack thereof) requires revenue (tax) increases, AND spending (entitlement) cuts BOTH.  Politicians get voted OUT for doing these things.  Our household financial woes in this example, have become a popularity contest – not what’s prudent. 

I urge you to Google and do your own research on our national debt.  If we do NOT do this, and FAST, our lenders may soon just stop.  There is no contingency for that.  We are addicted, and Washington has given everyone what they want – when they want it – and the “Physics of Money” simply won’t allow it to continue.  Something has to (and will) give.  It is like giving your kids everything they want and wondering why they grew up to be spoiled and lazy. 

TO BE CLEAR!  I am in favor of raising taxes ONLY if there is a cut in spending.  We have to PAY AS WE GO.  Ask an economist that is NOT a politician or lobbyist.  

When you factor in the demographic shift (Social Security, Medicare, Medicaid etc) and our current low productivity, it is sobering to think of where this money will magically come from in the future….   It is like watching two trains heading toward each other on the same track. 

9-11 should have taught us to be prepared and conservative, but Washington kept taxes low and spent out of control.  

The DOW is currently at about 11,000.   The market is in denial, apparently because these companies are “profitable and cash rich”.  

Consumer confidence is low and the mood of the working and (middle) class is pessimistic.  President Obama (and W too) wrote a bigger check than he could cash, I think.  He (they) made promises to the masses that can’t be kept. 

We are in a period of deleveraging, and asset values can (and I believe) will go lower.  The Pontiac Silverdome was recently purchased for $583,000.   

We MUST prepare. 

There are opportunities RIGHT NOW, and there will be many more for the prepared. 

I reserve the right to be wrong, and maybe the stock market (Dow) might shoot straight up and make me look too conservative and over-concerned. 

But I doubt it.  

Call me for specific strategies. 

Jeff Christenson 

P.S. Please see the attached commentary I emailed out on September 17, 2008.  Interesting to note that at the time, the Dow was at 11388, followed by a market low of 6507 on March 9, 2009**. 

P.P.S.  Times of adversity can yield amazing things.  

I challenge the people reading this letter to one or more of the following: 

  • If you can, hire someone.  If you can’t, MENTOR someone.  You are reading this because you are a successful person, and were handpicked by me to receive it.  SHARE your genius.
  • Ask your neighbor if you can help them with anything.
  • Invent / improve / innovate something.
  • Find something of value that you have that would be of much greater value to someone else, and give it to them.  Help someone less fortunate.
  • Stop complaining about the government and start DOING something about it.  (purpleletter.org)
  • Treasure things money cannot buy.
  • Stay positive, some great things are coming your way! 

*Source:  Federal Budget: http://www.usgovernmentspending.com/ and Federal Revenue: http://www.usgovernmentrevenue.com/#usgs302a  

**Source: http://finance.yahoo.com/echarts?s=%5Edji+interactive#symbol=^dji;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=; 

The views are those of Jeff Christenson and should not be construed as investment advice.  All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.  Investor cannot directly invest in indices.  Past Performance does not guarantee future results.  

Securities offered through Multi-Financial Securities Corporation, Member FINRA/SIPC 

Christenson Wealth Management and Multi-Financial Securities Corporation are separate companies. 

Please consult with a qualified tax advisor prior to implementing any tax related strategy. 

For more information on Jeff, Christenson Wealth Management or to receive future economic commentary please visit www.HabitsOfWealth.Com or call (602) 808-5580.

Filed Under: arizona economy, Asset Protection, economy, investing, investment exposure, Jeff Christenson, recession, recession survival Tagged With: , , , , , , , ,

THE VAULT: Asset Protection, Cash Alternatives and Life Insurance – UPDATED

September 2, 2011 By Leave a Comment

In the week ending august 14th another 24 Billion dollars left the securities market for the relative perceived safety of cash. These billions  of dollars simply added to the trillions of dollars already allocated that way because of fears of instability in the securities and real estate markets. 

This large liquidity position has not gone un-noticed, unfortunately many of those who noticed are those who would like to separate you from your wealth. They see an opportunity for litigation in your liquidity.   

 

Their timing couldn’t be worse, especially if you are like most successful Americans who have lost huge percentages of their net worth through home equity loss, stalled or negative investment momentum and decreased profits or compensation.

 

 

 

The “Vault” was developed out of a need to have additional options for clients who:

-Are unhappy with their current cash returns (earning less than 1% and getting taxed on even that);

-Have concerns about the stability and FDIC insurance limits on banks and various govt. bonds given the debt crisis     (See this article on bank solvency Risk in the Wall Street Journal)  http://online.wsj.com/article/SB10001424053111904800304576478872384312208.html ;

-Have a need for Asset protection due their net worth, visibility and professional liability, or some combination thereof;

-Understandably have larger than normal cash positions because they are afraid of both R.E. and securities                             (See this article on ”Why Investors Should Worry About Money Market Funds: the Wall Street Journal)  http://online.wsj.com/article/SB10001424052702304520804576343093940388186.html ;

-Like having additional death benefit (10 to 20 times deposit amount if something happens to you);

-Like relying on the statutes in their state or the well proven operation of law as an additional way to hedge risk;

-Had an absolute desire to have a true, fully liquid cash alternative.

 

FAQs:

Q: Why haven’t I heard of this before or through my local advisors?

A: We have been using this strategy for a number of years and it was developed as part of our narrowly focused practice in the area of Asset Protection and wealth preservation. Most financial advisors are (rightly) focused on turning nickles into dimes (growth). Our clients are typically affluent and successful and while they value growth make loss prevention an even higher priority. They understand that the current economic environment makes KEEPING existing dollars even more important than chasing new ones.

Q: Can my advisors do this?

A: Only if they  have access to the specific, specially selected policies, knowledge and legal structures we describe and use. These policies are designed and chosen to benefit the client and provide maximum liquidity and protection based in the law, not to benefit the advisor and their bottom line and commission. Most advisors DO NOT even have the ability to use the best policies this way, its takes special permission and qualification.

Q: My advisor says he has something just as good. 

A: Our search for viable alternatives and options for those we work with has been exhaustive. He’s most likely selling you what he has on his shelf and not disclosing the features that his version is missing which are often fatal to your planning. We are working with specially qualified and trained advisors across the country and can get you the best informed help.

 

Note: this article originally appeared in WORTH magazine,

you can see the original here: http://www.box.net/shared/iyb9kea6yr

“What is an alternative to my current cash position that will protect my money from litigation?”

 

In our current economic environment, all clients want their money both safe and liquid.

When most people consider “safe” and “liquid,” they immediately think of their bank. However, what most people do not know is that their checking or savings account is unprotected from a very real threat: the exposure to an increasingly hostile and predatory litigation system. Consider this:

There are tens of thousands of lawsuits filed each day in this country. The average legal cost of defending a frivolous lawsuit is $91,000, plus the settlement amount itself. The number of lawsuits increases in tough economic times as people look to your wealth as an additional source of income.

Our team often takes commonly used tools and redesigns them to provide protection of client assets, while allowing clients to retain control and liquidity. This where the sciences of Financial Planing and Asset Protection meet. The situations below demonstrate the benefits of a strategy we are using in which we take a universal life insurance policy and design it to provide 98 to 102 percent cash surrender value in the first year.

Current Situation—Cash in the Bank: A healthy 45-year-old male client has a bank checking account with $1 million. He rarely uses this account, but he keeps his money there because he likes to have a certain amount of funds liquid in case he needs to access it quickly.

Here is how a regular, personally held bank account works:
· The account earns about 1 percent interest per year, with income taxable as ordinary income.
· If the client is sued for any reason and loses, the judge can require the transfer of the assets from the client’s checking account and into the plaintiff’s pockets.
· If the client dies, the named beneficiaries will receive the $1 million minus the taxes due.
· If the client needs to use the money, he is able to take the amount needed.

BETTER: Creditor-Protected Cash Alternative:
The strategy our team has designed allows the same client to place the $1 million into a specially designed universal life insurance policy by paying a premium amount of $500,000 in each of the first two years.

The policy will provide the following benefits:
· The account will earn a net interest of about 1 percent annually invested in the policy’s fixed account, and the gains are allowed to grow tax-deferred. If the client is sued for any reason and loses, the money in this account is 100 percent creditor-protected from day one.
· If the client dies, the named beneficiaries will receive a death benefit of $10,624,682, the face amount associated with this specific example, free of any estate taxes.
· If the client needs to withdraw all or part of the money in the account, he is able to do so at anytime with no fees or surrender charges, and he will have access to the money within a week. To Summarize the benefits again:

- Creditor Protection

- Wealth Multiplier Effect of 10X (in this illustration)

- Liquidity and borrowing options with no penalty

- Death benefit of $10MM plus that passes outside the estate and free of estate tax

My thanks to Insurance and Investing Expert Jeff Christenson for his help on the technical details of the insurance policy. Together we implement this strategy for clients and advisors nationwide.

Filed Under: Asset Protection, Best Money Market rates, creditor protected cash alternatives, Family Office, finacial advisors, Finance, financial advisors, high net worth, investment exposure, Jeff Christenson, Jumbo CD Rates, Life Insurance, Life Insurnace Conversions, Municipal Bonds, physicians, professional athletes, recession survival, Uncategorized, worth magazine Tagged With: , , , , , , , , , , ,

Physicians Facing Increased Risk as Investment Fraud Targets

March 17, 2011 By Leave a Comment

Ike Devji, J.D.

The amount of fraud targeting doctors is increasing daily as they, like everyone else, are feeling the pinch of current economic conditions, decreasing compensation and stalled or negative investment momentum.

Those of us in legal and financial professions know that markets are primarily motivated by fear and greed, meaning fear of loss and the desire for gain. Given the rather dismal performance of many real estate and investment portfolios the timing of these con game operators could not be any better to take advantage of your perceived need for huge financial gains in what is perversely marketed as a “safe and predictable” way.

In uncertain times people derive a false sense of comfort doing in business with a personal or social contact or a member of their own religious or ethnic community. That comfort level is unfortunately replacing required standards of due diligence and often intentionally sidesteps the professional advisor relationships that a physician may have in place, often with financially fatal results.

Many of these schemes are dressed under broad terms such as private offerings, hedge funds or are related to purchasing intangibles, like deeds of trust. Others, like the currently in vogue Iraqi Dinar trading scheme that we and many other professionals generally consider to be a scam, play upon the desire we all have to not be the last one on board or in the know and are increasingly marketed through churches. One of my professional due diligence resources, Greg George of GTI Advisors, has stopped recent clients from investing in 14 apparent Forex frauds during the past six months alone. Those perpetrating these schemes don’t want your team involved and asking the tough questions they are trained to ask.

Common Reasons Con Men Provide for Exclusion of the Doctor’s Advisors Include:

-        We need you to make a decision and fund immediately because we have other investors waiting for this opportunity;

-        They won’t know how this works;

-        This is a special private deal for friends and family only; your friends are all in the deal and they all had their people check it out;

-        They will say no because we will compete with them;

-        We have an NDA (non-disclosure agreement) you will need to sign and keep this offering confidential;

-        We have our team and they have checked this out with our own high dollar lawyers;

-        We have the “support” of such and such big bank and they already checked us out. They wouldn’t be involved if we were crooks;

-        General (Insert name) and Senator (Insert Name) are part of this as well, they joined us through their church.

Any one or two these elements might be true on nearly any private investment offering, but my associates and I have NEVER seen a legitimate offering where the promoter used multiple tricks on this list. If they really have a deal that is worth being part of they will allow you and your advisors to ask due diligence questions and do your homework. If confidentiality is required your professional advisors typically have no issue signing an NDA on your behalf.

This is the age of buyer beware and due diligence; take responsibility and proactive steps to protect yourself and your wealth. Like with preventative medicine, it’s cheaper and more effective to avoid the harm than to try and fix it.
Greg’s specific recommendations on protecting your business operations and investment activities:

  • Do a little deeper vetting of key players in any deal than is offered on the several thousand Mr.BackgroundScreening.com’s out there – same with suppliers and any private equity placements or business acquisitions you’re planning;
  • Always have trusted, outside subject matter experts like your own lawyers and CPA assist you with concerns and evaluations;
  • Trust but verify claims of licensing or expertise and look for regulatory sanctions and disciplinary actions regarding professional licensing.
  • If you’re seeking funding, beware of brokers requiring ‘up front’ fees and remember that fraud works both ways. Most want your money, but some want to launder theirs. If you’re offered equity funding, financing, a joint venture or other partnership, ‘verify the ‘character’ of the guy who is making the offering, and the source of the money.

 

This article was originally written for and published by www.PhysiciansPractice.Com, The Nation’s Leading Practice Mgmt. Resource, where Mr. Devji is also a regular contributor.

Filed Under: Asset Protection, business legal planning, chiropractors, dentists, fraud, Greg George, GTI ADVISORS, Ike Devji, investment exposure, physicians, scams, Uncategorized Tagged With: , , , , ,

Due Dilligence and Why the Background Check You Used Won’t Work

March 11, 2011 By Leave a Comment

   

Due Dilligence Expert Greg George

Due Diligence is a commonly overlooked or underestimated  tool, and a an essential plan of any business venture or financial entanglement, especially now in the golden age of fraud. One of my top resources for clients is Greg George of GTI Advisors, he shares some exeprt insight on the false comfort of commercially available background checks below.  – Ike Devji  

There is No Such Thing as a ‘National’ Criminal Background Check for $29.95

A comprehensive background investigation is a must do for principals involved with various business transactions, private investments, bringing in new partners, examining suppliers and reviewing key hires for your company.  In spite of what many background screening companies across the country claim and try to sell you, there is no such thing as a “National Criminal Record Database Check for $29.95.”  
Although our firm does enjoy privileged access when undertaking criminal investigations on behalf of corporate clients and working with law enforcement, the data compiled by the National Crime Information Computer (NCIC), maintained by the FBI, the Law Enforcement Information Network (LEIN), maintained by each individual state, and other government information assembled by law enforcement on criminal matters IS NOT AVAILABLE for sale to private industry, and such sale or unauthorized access would violate both federal and state law. 
   

Best [research] methods for decision makers in the private sector to verify identity and achieve optimum results for criminal and civil record research in the U. S. include the following. A different criteria is applied when researching offshore issues, depending upon the country, the culture, and other specifics.  

  • Verify the subject’s social security number. This will show that the SSN was actually issued to this person as well as when and where it was issued.
  • Hand-search county court records in each jurisdiction where the subject has resided based on his or her address history. The statistical example: 85% of all arrests and convictions occur in the county of residence. However, take care when selecting your research supplier – they should be able to provide thorough research coverage extending to all 3,227 (or so, at last count) state counties, independent cities and township or village corporations across the United States.
  • Complete a federal criminal records search. A federal conviction or other information which indicates the subject may be or has been involved with federal authorities will not be revealed in a state county records check.
  • Narrow an online search of the thousands of news feeds for an arrest hit, if found, verify disposition of charges at the court of proper jurisdiction.
  • Become familiar with the Fair Credit Reporting Act – “FCRA”, available online prior to hiring employees. Any background research for employment purposes, (including obtaining a credit report), requires a separate stand-alone written release from the candidate. Most states have adopted the FCRA model in their respective legislation and several states also have further compliance mandates you need to follow. For due diligence review matters regarding private equity closings and other consumer initiated commercial transactions, the rules are a little different.

Specific purpose due diligence and employment background research can take on many forms, requiring various criteria to be addressed. My firm has provided research services ranging from basic criminal records reviews up through full field background investigations. Depending on the specific industry and employment position being filled (primarily corporate-level, financial, scientific, and other key staff positions), we may also recommend conducting additional interviews of past employers, business partners, neighbors, and other associates.
   

Suggested Baseline Criteria for Background Research on Individuals
Regarding due diligence research for investment, joint venture, merger, acquisition, other partnership opportunities or a key hire our recommended research criteria varies depending upon the specific industry.  However, here is what I suggest as a common baseline to examine for all individuals:  

  • Identity verification.
  • Criminal convictions.
  • History of civil litigation as plaintiff or defendant.
  • Bankruptcies, liens, judgments, and other adverse filings.
  • Past business associations, employment verification and reference interviews.
  • Verification of colleges and schools attended and highest degree awarded.
  • Global financial intelligence network lookouts on persons and businesses; alert reporting data: U.S. Treasury Financial Crimes Enforcement Network, Interpol lookouts (Special attention to Asia, Russia, European Union) and comply with U.S. Patriot Act requirements.
  • Check for U.S. Treasury Office of Foreign Asset Control sanctioned/disallowed persons and businesses BEFORE you commit to hiring or to any transaction, anywhere.
  • Verification and review of regulatory sanctions and disciplinary actions regarding professional licensing.
  • When an individual is associated with a company you’re considering doing business with, review the company’s standing, fictitious names found, various filings, and officers listed when doing research on private or closely held businesses as either a separate engagement or along with individuals under review. Utilize the same recommended research strategy for individuals regarding fraud alerts and research for other adverse filings the company may be involved with.
  • Deep media research for articles about the individual or company

Deeper Research May Provide Undisclosed Information You Should Know About
Our firm recently provided due diligence research for a venture capital firm based in Southern Florida. During our engagement, we discovered one principal on the management team of the company seeking funding was a medical doctor under investigation by state licensing authorities regarding several complaints.  This investigation may lead to disciplinary action or criminal charges against the doctor. The existence of the state investigation was not initially disclosed to the venture capital firm.  If the venture capital firm had not ‘looked’ before they closed on the deal, an adverse outcome of the state review could have affected the credibility of the investment firm and become a formidable liability if investment money had already been given to this new medical technology company.  
My experience with government services, particularly consulting on investigations and reviews of candidates applying for sensitive positions requiring U.S. Government security clearances, a clear dis-qualifier for most is when information is not voluntarily disclosed and discussed up front. People make mistakes; this does not mean they’re bad people. And, events do occur in life requiring each of us to face many challenges at times, such as a medical bankruptcy or other factors resulting in unforeseen financial distress.  
Criteria for refusal of a candidate should not be automatic upon the disclosure/discovery of negative or potentially adverse information. A frank discussion with the candidate or potential business partner to review background information is certainly appropriate. If you choose to proceed after these discussions, remember – trust is important, but verify.  


In addition to vetting people and companies before engaging, clients often consult with us to assist with composing appropriate language to include in funding term sheets that address “contingent upon outcome of background review” or other related stipulations. As part of our assistance, we urge our clients to at least seek an initial background reviews before committing much time, resources, and effort to their quest.  All things considered, the costs of background research are nominal and analysis of the results provides a significant tool to support informed decisions.
_______________________________________________________
Greg George is a senior advisor to professional services firms, CxO’s, investors, family office groups, and global banking center directors.  Greg’s firm operates an intelligence fusion center available to private sectors providing investigative and operational due diligence analysis, and guidance addressing security operations, fraud, compliance, internal investigations and countering insider and espionage threats.  Greg can be contacted by email: greg@gti-advisors.com or visit http://gti-advisors.com

Filed Under: Asset Protection, business legal planning, business survival, Due Dilligence, Family Office, fraud, Greg George, GTI ADVISORS, Ike Devji, investing, investment exposure, scams, venture capital Tagged With: , , , , , , ,

Protecting the innocent – Due Dilligence & Investment Fraud

December 8, 2010 By Leave a Comment

Insider threats cost business $4bn each year

  • Hacker skims 35,000 customer credit card numbers
  • 14 Business bank accounts wiped out by phishing scheme
  • Investors scammed out of $14mm in ponzi scheme
  • Man with history of fraud hired as CFO ‘disappears’ Taking $2mm From Company
  • Vendor employees steal client’s proprietary data; sells to foreign government

Guest Author Greg George, Due Dilligence Expert

All familiar headlines we see too often.  At every turn there is someone who wants what you have and will go to extraordinary means to acquire anything they wish.  Moreover, most victims are unaware of how easily they can be taken.

Much of my time, and that of my colleagues working with their own firms, is spent educating professional services advisors and their client’s.  In most cases they have to ask first and unfortunately, it’s usually after a very expensive incident has occurred.

High Net Worth investor’s can be another challenge – they are ‘hot after the deal’ and often won’t stop long enough to think things through – one example, we were able to stop several clients from investing in 14 apparent Forex frauds just during the past six months.

Same rescue package for a few client targeted company acquisitions… offshore.  Numbers were great, threat of a bidding war with a competitor looming… classic get the deal done pressure.  However, none thought to check out the principals of the target company until we got a call from the transaction lawyer a week before closing – two of these guys were on the DHS and FDA hit list, the OFAC radar screen, and under investigation for financing terrorism.

A few thoughts on protecting your business operations and investment activities:

  • Do a little deeper vetting of your management and other ‘key hire’ candidates than is offered on the several thousand BackgroundScreening.com’s out there – same with suppliers and any private equity placements or business acquisitions you’re planning.
  • Always have trusted, outside subject matter experts assist you with concerns and evaluations.
  • If you operate a small business, buy a $300 desktop computer and use it ONLY for online banking and purchases – and use ONE dedicated credit card for purchases.
  • Limit access to critical data – if the employees’ duties have nothing to do with a specific project, they don’t need to know about it.
  • When someone leaves your organization, immediately delete their usernames, passwords, any other access from your systems (you’d be amazed at the number of companies that don’t do this).
  • If you’re seeking funding, beware of brokers requiring ‘up front’ fees.
  • If you’re offered equity funding, financing, a joint venture or other partnership, verify the ‘character’ of the guy who is making the offering, and the source of the money.

Above all, when the time comes for you to make a decision, excuse the MBA’s and lawyers from the room, and just use plain old fashion common sense.

______________________________________________________________

Greg George is a senior advisor to professional services firms, CxO’s, investors, family office groups, and global banking center directors.  Greg’s firm operates an intelligence fusion center available to private sectors providing investigative and operational due diligence analysis, and guidance addressing security operations, fraud, compliance, internal investigations and countering insider and espionage threats.

 

Greg can be contacted by email: greg@gti-advisors.com or visit http://gti-advisors.com

Filed Under: abusive tax schemes, Asset Protection, business survival, Due Dilligence, financial advisors, fraud, Greg George, GTI ADVISORS, high net worth, Ike Devji, investing, investment exposure, physicians, professional athletes, scams, venture capital Tagged With: , , , , ,

UNDERSTANDING DUE DILLIGENCE – Video Inteview

December 7, 2010 By Leave a Comment

The video below features Due Diligence professional Greg George of GTI ADVISORS being interviewed by financial expert Matt Davio. The events of the last 36 months combined with ongoing economic pressures have brought to light the amount of fraud and misrepresentation that is so prevalent in business today. Part of Asset Protection is not getting burned in the first place avoiding harm and those who would do harm to you. Greg is one of the resources I use to protect my clients.

Greg George @gtiadvisors Talks Due Diligence for PE and M&A Firms with Matt Davio @misstrade from miss trade on Vimeo.

Filed Under: Asset Protection, business legal planning, business survival, Due Dilligence, fraud, Greg George, GTI ADVISORS, investing, investment exposure, venture capital Tagged With: , , , , ,

MUNI BOND BOND EXPOSURE – WARNING

January 18, 2010 By 2 Comments

This article by investment expert Jeff Christenson was originally published in this month’s issue of WORTH magazine. It sheds light on how the economy and depressed tax revenue threaten the value of Muni Bonds, what many consider to be the safest part of their portfolio. A must read for advisors, investors and CPAs. – Ike

As State Budgets Troubles Worsen, What’s Next for Muni’s?

A new crisis, that has not yet been addressed, exists within state and municipal
budgets. According to the Center on Budget and Policy Priorities in Washington, DC, an unprecedented level of state fiscal problems have been brought on by the worst decline in tax receipts in decades and these revenue declines show no signs of letting up.

The current recession is expected to be more severe than the last one, causing state fiscal problems to deepen and last longer than previous recessions. At least 48 states are addressing budget shortfalls for fiscal year 2010 totaling $168 billion and an unusual number of these states are still struggling to adopt a budget for fiscal year 2010, two months after the July 1st start date.

These fiscal problems are expected to continue into fiscal year 2011 and likely beyond. At least 36 states are anticipating significant deficits for fiscal year 2011, and these shortfalls are estimated at an additional $180 billion. Combine the shortfalls for the 2010 budget and those estimated for 2011, and the estimated total is at least $350 billion.

Unemployment, which peaked after the last recession at 6.3%, has already exceeded 10%, and many economists expect it to continue to rise. This continued rise in unemployment would further reduce state income tax receipts, thereby significantly increasing demand for Medicaid and other state-provided services. Also, sales tax receipts have fallen more severely than during the previous recession due to a reduction in the consumer’s access to sufficient lines of credit. This reduction in state revenue has forced states to implement a combination of spending cuts, withdrawals from reserves, and use of federal stimulus dollars. When combined with falling property tax receipts due to rising residential and commercial delinquencies and defaults, state and municipal revenues may continue to decline for some time.

Although we see a high level of risk in the municipal bond markets currently, with equity markets rallying, municipal bonds trading at premiums, and more cash moving off of the sidelines and into the markets each day, market conditions may stay positive through year-end or early next year before the sentiment reverses.

Investors who cannot afford to lose their current unrealized gains from the recent rally should be cautious and mindful of the increased risk to capital and strongly consider moving out of municipal bonds to protect capital.

During last year’s financial crisis, municipal bond prices fell by an average of 20%. The current rally has led to a recovery in pricing, with many municipal bonds again trading at premiums. This recovery in pricing is concerning, given the increasing budget shortfalls and the most extensive expense cuts by states and municipalities in history. Given the relatively low yield of most municipal bonds, the ratio of risk to reward seems out of balance. In fact, this may be one of the greatest selling opportunities in history.

Link to the article in WORTH: http://worth.com/index.php/advice?id=168&view=single

Disclaimer:

The views are those of Jeff Christenson and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Past performance does not guarantee future results.

Securities and Advisory Services are offered through Multi-Financial Securities Corporation, member FINRA, SIPC. Christenson Wealth Management is not affiliated with Multi-Financial Securities Corporation.

Filed Under: Asset Protection, high net worth, Ike Devji, investing, investment exposure, Jeff Christenson, Municipal Bonds, worth magazine