Romance Scammer’s Discharge Denied
Author: Mark Reinecke
I turned 51 this year. Although I am happily married (I hope she concurs), many unattached baby-boomers are searching for relationships either on-line or elsewhere. Unfortunately, some seeking romance are victimized by scammers. One victim who fought back made some progress in court last week. She met him on-line and eventually moved in with him. He led her to believe he was a financially secure securities trader, convincing her to lend him $100k to accompany his own $100k in a “low-risk” investment. He lost it all, except his own $100k which he never had, and then filed for bankruptcy protection to avoid having to repay her. She fought back arguing that her claim against him should not be discharged in bankruptcy. Although the trial court denied her objection to a discharge under her theories of embezzlement (11 USC §523(a)(4)) and willful & malicious injury (§523(a)(6)), it ruled in her favor on her fraud claim (§523(a)(2)(A)) thereby preventing him from obtaining a discharge of the debt. Although it’s good news that such a scam may not be dischargeable in bankruptcy, collection will likely be difficult so the takeaway is still to be very careful about where you invest your money.