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LLC Fraud?

Oyarsa

New Contributor
Sep 16, 2019
6
1
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I apologize if this isn't the right forum for this question.

I have a step-daughter. Her biological father is a deadbeat/con man. He has paid a total of $60 in child support (just to prevent his license from being suspended). Currently he is only required to pay $50/month due to him being supposedly disabled. He supposedly only receives money from church support, state support, and tribal support.

Despite this, he has managed to find money time and again for lawyers to take us to court.

He also owns a used auto business. Actually, he has owned 3 over the last several years. I believe that he starts an Llc, takes out a business loan, gives the money to himself, then declares bankruptcy.

Is this legal? If not, how do I report it? I reported to the state DSHS office for unreported income/assets/etc. If I understand, it's not considered embezzlement. It might be tax fraud, but would it do any good to report it to the IRS?
 

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Tourmaline

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How does reporting it benefit you?
 

broswoodwork

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I apologize if this isn't the right forum for this question.

I have a step-daughter. Her biological father is a deadbeat/con man. He has paid a total of $60 in child support (just to prevent his license from being suspended). Currently he is only required to pay $50/month due to him being supposedly disabled. He supposedly only receives money from church support, state support, and tribal support.

Despite this, he has managed to find money time and again for lawyers to take us to court.

He also owns a used auto business. Actually, he has owned 3 over the last several years. I believe that he starts an Llc, takes out a business loan, gives the money to himself, then declares bankruptcy.

Is this legal? If not, how do I report it? I reported to the state DSHS office for unreported income/assets/etc. If I understand, it's not considered embezzlement. It might be tax fraud, but would it do any good to report it to the IRS?
I'm sorry you're having a hard time. I'm not 100% sure if this is the right place for this question. We're an ethical entrepreneur community.

Avvo.com may be a better alternative. I hope you find what you're looking for.

Edit: that being said, if you're looking to make some awesome changes in your relationship with money, value, and create a better world for your kids, check out Unscripted by MJ DeMarco.

He built this place and has positively impacted all of our lives. :)
 
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Oyarsa

New Contributor
Sep 16, 2019
6
1
1
How does reporting it benefit you?
Good question. My thoughts are that first and foremost it would take away his ability to conjure up money to continuously keep us in court (which is costing us several thousands each year). Second, I must admit that it would be a "stick it to him" for the grief he has caused my family. And third, if it IS improper, I feel It is appropriate to notify those in authority to deal with it. I'm sure we aren't the only people being affected by his misuse of the system.
 

pkom79

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I believe that he starts an Llc, takes out a business loan, gives the money to himself, then declares bankruptcy.
Very unlikely scenario. Nobody would give him a business loan without a personal guarantee (if the business has no track record). If he declares personal bankruptcy, he won't get any credit for years.
 
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Oyarsa

New Contributor
Sep 16, 2019
6
1
1
I'm sorry you're having a hard time. I'm not 100% sure if this is the right place for this question. We're an ethical entrepreneur community.

Avvo.com may be a better alternative. I hope you find what you're looking for.

Edit: that being said, if you're looking to make some awesome changes in your relationship with money, value, and create a better world for your kids, check out Unscripted by MJ DeMarco.

He built this place and has positively impacted all of our lives. :)
Thank you! I'll look into both Avvo.con and Unscripted.
 
OP
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Oyarsa

New Contributor
Sep 16, 2019
6
1
1
Very unlikely scenario. Nobody would give him a business loan without a personal guarantee (if the business has no track record). If he declares personal bankruptcy, he won't get any credit for years.
I was curious about that. It is, of course, possible he is getting the money any number of ways, and I'm cautious about letting my bias affect my thoughts. It just seems odd for him to suddenly have money and two LLCs in the last two years.
 

Tourmaline

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Just a thought, but have you ever considered hiring a PI to find out what he's really up to?
 

pkom79

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I was curious about that. It is, of course, possible he is getting the money any number of ways, and I'm cautious about letting my bias affect my thoughts. It just seems odd for him to suddenly have money and two LLCs in the last two years.
In any case, he wouldn't be able to declare bankruptcy twice in two years. Also registering an LLC costs like $100-$200, so you don't have to be a baller to have 10 businesses.
 
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Oyarsa

New Contributor
Sep 16, 2019
6
1
1
Just a thought, but have you ever considered hiring a PI to find out what he's really up to?
Yes, actually. I mentioned that to my wife today, as well as bringing our lawyer from the last case in on it. I'm trying to decide if it's worth trying. Lawyers are expensive, and so are PIs, unfortunately.
 
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Oyarsa

New Contributor
Sep 16, 2019
6
1
1
In any case, he wouldn't be able to declare bankruptcy twice in two years. Also registering an LLC costs like $100-$200, so you don't have to be a baller to have 10 businesses.
That's good to know about bankruptcies. I go back and forth about him. Some of the things he's done might be out of what he perceives as genuine concern for his daughter. So, too, might these be legitimate attempts to start a business. Unfortunately, I also know he was abusive to my wife (and other women), and embezzled from a children's museum (and convicted, though he paid restitution, so he managed to get it expunged from his "record"). It's hard to give him the benefit of the doubt.
 

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ryanbleau

Silver Contributor
Speedway Pass
Jun 22, 2014
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You mentioned tribal support. depending on the tribe he could be getting grant money from the tribe to start businesses. It's not uncommon for them to funnel government grants the tribe receives for development through these schemes.
 
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