Structured Settlements are the ridiculous deals whereby I buy money that's owed to you for pennies on the dollar. Say you reached a settlement that pays you $500/month for 30 years, that's $180k over 30 years. But if I offered you $20k, today, you might take it, if you had developmental problems.[1]
Well, structured settlements need a judge's signature to go through, with the theory that the judge reviews the deal to make sure it's fair.
Except this guy just went ahead and forged the signature.
Technically the structured settlement is the original settlement, the $500/month. What this guy forged signatures on were transfer approvals.
The charges against the paralegal are one thing, but probably more interesting is the fact that since none of these transfers had the judicial approval mandated by the law, none of them are actually valid. Not sure how easy it is to go back and undo or redo all those sales.
A structured settlement is a settlement that pays in some fashion other than a single lump sum (commonly an annuity). Many people choose to turn these types of long-lasting cash flows into cash today.
As is so often the case, some annuity purchasers pay inarguably fair prices, and others don't. Some engage in fair dealing and some don't.
milliner's accusations are akin to a claim that Wells Fargo is a predatory lender because payday loan shops exist.
The linked article (which was on the front-page some time ago) was about scammers going after people who had structured settlements that they had won due to suffering brain-damage and developmental disabilities from lead-poisoning. So literally true...
It may make perfect sense. For example, if you're unemployed and receiving 20k right now would give you a chance to move + finish a course + get stable employment. That may be a much better solution than getting regular small payments that only give you a bit of breathing space every month on top of your benefits.
But that's only assuming you can invest the 20k in a reasonable way.
Even if it's totally worth it, surely you can get a better deal than effectively taking out a loan with a 100% interest rate, or whatever it works out to.
Can you get a 30% APR loan if you have no job or savings and credit rating close to 0? Payday loans are 300%-1000%. People would go for the 30% loan you mention instead if they could.
In a typical situation, no. But this is very much atypical. The person in question has a guaranteed source of long-term income. It's better than any job; they'll never get fired, or get fed up and decide not to come in anymore. It sounds like you can even redirect the payments so they go directly to the company making the lump-sum payment. The only risk is bankruptcy by the payer. It ought to be safer than a high-quality mortgage or car loan, which right now are available at 4% or less. (My car loan is 1.11%, which is completely ridiculous and not all that unusual.)
The $180k isn't NPV, unless you have a 0% discount rate. The payment schedule from the root comment was $500/month over 30 years, which comes to $6k/year. So this year you would have $14k more by accepting the $20k.
For the $20k lump sum to be worth the same as $6k/year for 30 years, you would need a rate of return of 43% (if my Excel-fu is correct). It would be better to take the $6k/year and take $20k as a cash advance on a credit card.
Sorry, I misinterpreted the meaning of the verb "worth" and worked backwards from what I assumed was the NPV. (and pulled a 20-yr term out of an orifice instead of the 30 years in TFA, whoops)
Huh? $20,000 at 7% would be a $133 monthly payment. If you get $20,000 up front in exchange for $500/month for 30 years, that's an effective interest rate of 30%. Quite unreasonable.
So offer more. It seems like, this case of fraud notwithstanding, there's plenty of room for new participants in this market. Suppose you were to show up and offer these people an effective interest rate of 12% instead. Surely even someone with a mental disability would take $100 instead of $50 for the same thing.
I don't really feel like being a bank, though. There's already plenty of competition for loans, this is just a case where predators are soliciting customers who don't understand that, and probably don't even know that the product they're signing up for is a loan.
Maybe it means there's room for better marketing by banks in this space, although there can't be that many clients. It may be that it's only worth targeting this group if you rip them off outrageously.
Possibly. I know for sure that I would love to have access to this market. I would be happy to offer a much more fair price than the existing players are paying. In a ZIRP world, who wouldn't love 12%? Or even 8%? We're all banks, whether we like it or not. It might not be worth it for Citigroup, but a $100m market is definitely worth it for you and me. Just look at LendingClub and Prosper.
Perhaps they have an opportunity that they can't get financing for against the 180k cashflow? It could definitely make sense. A question I love to ask people is, "would you take 1m cash today (post-tax), or a 1mm salary at a job for 10 years where you have to do the work?". For instance, I might take the 1mm and found a startup/speculate (unlimited upside, and -5mm downside), while someone else might take the 6mm (after taxes) over 10 years. It's simply a matter of opportunity cost.
Will you take 111k today or a job paying you 33k pa for the next thirty years? That's the ratio 20k : 180k. Oh and you can't go out and get another job - that 110k has to last the next three decades.
It's clear cut throat exploration.
And I utterly refuse to believe this paralegal just suddenly took it into his head to forge those signatures and everyone else at the company were poor naive innocent dupes
Companies love to set things up such that illegal activity is never ever ever tolerated, but at the same time set up metrics and goals that are impossible to meet legally. Then you just keep firing people who underperform, and the rest happens by magic. This lets them reap all the benefits of illegal activity, while letting low-level employees shoulder all the blame.
Your question is an interesting hypothetical, but I don't see how it's relevant here. How does "where you have to do the work" fit in?
Sure, it's a matter of opportunity cost, but taking $20,000 today instead of $500/month for 30 years is effectively taking out a loan at 30% interest. Even if it's worth it, you can do a lot better.
Perhaps. Or perhaps they got ripped off. We don't know enough from the hypothetical with no details except a hypothetical present value and full value.
We could know more if we looked into details of individual cases. Like, say, the Washington Post did.
Signatures aren't secure, but that misses the point. In this instance the signatures are used as evidence that those transfers were sent, reviewed, and approved by a judge. Had it been done a verifiable document trail would exist.
In this instance when it was discovered the signatures were faked (or cloned), they could go look at the document trail and it was quickly discovered that none existed.
People will likely suggest other alternatives to signatures, like a unique serial number, but ultimately if people aren't verifying the document trail in the signature case, they won't verify it with a unique ID case, or most other clever means you can come up with (e.g. QR code, some kind of complex crypo method, etc).
If it is a document that allows faxing and photocopying, and nobody is taking the time to verify the authenticity of it, there are no more secure systems you can create. Things like holograms, specialist paper inlays, seals, etc can easily be faked during fax/copy. Signatures are about as good/bad as anything else.
The legal system is built on trust, verify, and punish.
It's still amusing to me that handwritten signatures, particularly in this day and age, are treated as secure or even meaningful for these kinds of purposes.
Certainly they're useful symbols, but in the era of photoshop and copiers, a signed document without notarization isn't any more secure or meaningful as proof of anything than an unsigned one.
They're not treated as secure. They're mostly a symbolic gesture that indicates the final version of a document and provides a concrete act that can be the basis for a lawsuit or prosecution in the event false representations are made about a document.
But that's the point. How can a signature indicate the final version of a doc and provide basis for a lawsuit if the signature can't be verified as legitimate?
In most every case, circumstantial evidence and witnesses can establish if the party that purportedly signed a document did in fact do so. The CEO of a company can't plausibly deny his signature on a contract when there are emails in evidence saying "let's get that contract signed tomorrow."
So why do we bother to sign documents? Most of all, its a symbolic gesture intended to signal (to the parties and witnesses) the attachment of legal rights and obligations. It avoids disputes such as "yeah, he presented me with that document, but it was a proposal and I never agreed to it."
> can't plausibly deny his signature on a contract when there are emails in evidence saying "let's get that contract signed tomorrow."
Is this true? An email showing intent to sign a contract, combined with a signature that somewhat resembles my own, is sufficient proof for a court that I actually signed that contract? That seems somewhat crazy.
Why does that seem crazy? Think about it statistically: you have evidence of intent to sign a contract, and a signed contract consistent with that evidence. In what percentage of cases was the contract actually not signed? Compare that to the burden of proof in a civil case--"more likely than not."
I guess I assumed when they say "innocent until proven guilty", "proven" implies hard evidence, not just two facts that suggest that an event occurred.
Defendants have a presumption of innocence, but accusers do not have a burden of mathematical proof. The closest you get to "innocent until proven guilty" in US law is common law's Ei incumbit probatio qui dicit, and the Latin word "probatio" does a lot more work than just "mathematical proof".
There's a good 30 minute Google jag you can have about this if you go search for [legal standards of proof].
> The closest you get to "innocent until proven guilty" in US law is common law's Ei incumbit probatio qui dicit, and the Latin word "probatio" does a lot more work than just "mathematical proof".
In most cases, there is no video tape, and almost never an actually smoking gun. "Proof" is whatever sounds reasonable to a judge or jury. It's also why our justice system is flawed: we sentence people without incontrovertible evidence all the time.
It isn't providing the evidential basis, it's providing the legal basis. Ie the signature isn't used to authenticate in a public-key cryptography kind of way, it's being used as a legal trigger: 'if you write a name here that isn't yours, you are committing a criminal offence'. (How that offence is proved is a separate issue).
Hence electronic signatures can be as simple as typing your name into a text box (or even just a checkbox). The (dubious) uniqueness of a handwritten signature is nonessential.
There are other things for signatures than just notaries. There is a "medalion signature guarantee" in which case certifying institution will be on the hook so to speak if they don't go the extra step to verify who is signing. They will usually ask for multiple ids, and will keep copies of them for records.
Most people just never have to deal with that, it is kind of a obscure service that few bank provide these days to the public:
They don't constitute a legally binding contract. You and I could have a conversation on the street and form a legally binding contract. Signatures are just used a simple form of verification of a contract.
In England I understand that a verbal contract is not worth much. However, in Scotland (very different legal tradition) a verbal contract can be totally and completely binding.
I am not a lawyer. This is not legal advice. Don't sue someone/risk getting sued because of something I said!
A verbal contract is binding in England but, as anywhere else, if you need to go to court to enforce that it's going to be harder to prove compared to a written contract with witnesses.
So you are right in many cases. But not all. The other example I was thinking of is regarding a house purchase. In England an offer to buy a house is not binding until contracts have been exchanged and a deposit paid and even then the deposit (usually 10%) is what your bound to. In Scotland however merely saying that you will buy someone else's house can supposedly bind you to the purchase.
[1] The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.
The headline of this should really read "Paralegal charged with forging signatures of 76 justices to reach structured settlements". Even the linked document itself makes this distinction and carries the above footnote.
While this indictment makes it clear what he is charged with, it doesn't seem to imply any sort of motive. Any ideas?
Another article on the subject[1] gives me the impression that the goal may have been simply to speed the process up but I'm not experienced in anything related to this..
Possibly to get settlements "approved" which would otherwise have been rejected, or which they didn't want to bring to a judge's attention for whatever reason?
Makes sense, but why? Was someone paying him a share? Was someone telling him he had to do it to keep his job? Most people won't forge something unless there's something in it for them.
I feel sorry for the senior partners in this law firm. The poor hard working lawyers were callously duped by this master criminal and paralegal, they took his word that those dubious sales had been approved and never even checked his paperwork.
And now look, he has skipped town, they are bischmirced in name, cannot hold their heads up at next weeks charity tennis match. It's awful.
Title is incorrect. In its current form, the title gives the impression that paralegal forged Judges' signatures to reach structured settlements. However, the paralegal forged judges' signature to help clients of his law firm acquire (the documents also uses the word "transfer") structured settlements awarded to individuals, presumably for a one-time payment.
Different state and so different courts / justices, but seems very relevant to the previously big story here about buying out structured settlements for lump sums: https://news.ycombinator.com/item?id=10120489
Are daytime TV ads really that cheap, or are there so many people with structured settlements out there (from what?) that buying them is a profitable business to be in?
On the other hand, if you're buying for pennies on the dollar and only need a tiny staff...
Well, structured settlements need a judge's signature to go through, with the theory that the judge reviews the deal to make sure it's fair.
Except this guy just went ahead and forged the signature.
[1]: More on this here: https://www.washingtonpost.com/local/social-issues/how-compa...