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Old 06-06-2007, 09:39 AM   #1 (permalink)
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Fraud

I took out a personal loan from a friend in 12/2002 for $103,000.00 in 2005 it was discovered I had M/S, diabetes, and coronary artery diease and had to stop working and with nothing coming in I defaulted on the loan. I recieved a 1099C cancellation of debt return this year for the full amount I owed so I filed it with my taxes and had to pay it. But now the personal lender is having me investigated by the police for fraud and I just can't take anymore stress with my health and very little money coming in. How many more things can this personal lender do to me? I made my payments till I got sick and had a hardtime walking.
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Old 06-06-2007, 10:07 AM   #2 (permalink)
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Originally Posted by trucker533 View Post
I took out a personal loan from a friend in 12/2002 for $103,000.00 in 2005 it was discovered I had M/S, diabetes, and coronary artery diease and had to stop working and with nothing coming in I defaulted on the loan. I recieved a 1099C cancellation of debt return this year for the full amount I owed so I filed it with my taxes and had to pay it. But now the personal lender is having me investigated by the police for fraud and I just can't take anymore stress with my health and very little money coming in. How many more things can this personal lender do to me? I made my payments till I got sick and had a hardtime walking.
You need to make the distinction between civil and criminal. Borrowing money is a civil action. Fraud, however, is criminal. You said, "Had to pay it". Do you mean you had to pay the loan? Or you had to pay tax related costs?

Also, you say "personal lender"--I am assuming you mean in individual, such as a friend or family member? Generally speaking, if you own money on a secured debt, if you surrender the collateral, the only thing you could be liable for ( besides poor credit scores ) is any balance that isn't satisfied if the collateral is resold.

You didn't say what grounds he had ( or he is saying he has ) to charge you with fraud. At what point does he say you were fraudulent? Is he saying you misrepresented your physical/financial/credit, etc. to obtain the loan? You say he is having the police investigate you. Is that a threat he made, or did he actually do so? Did he file a police report? Did they contact you?
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Old 06-06-2007, 10:28 AM   #3 (permalink)
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Originally Posted by GentleGrace View Post
You need to make the distinction between civil and criminal. Borrowing money is a civil action. Fraud, however, is criminal. You said, "Had to pay it". Do you mean you had to pay the loan? Or you had to pay tax related costs?

Also, you say "personal lender"--I am assuming you mean in individual, such as a friend or family member? Generally speaking, if you own money on a secured debt, if you surrender the collateral, the only thing you could be liable for ( besides poor credit scores ) is any balance that isn't satisfied if the collateral is resold.

You didn't say what grounds he had ( or he is saying he has ) to charge you with fraud. At what point does he say you were fraudulent? Is he saying you misrepresented your physical/financial/credit, etc. to obtain the loan? You say he is having the police investigate you. Is that a threat he made, or did he actually do so? Did he file a police report? Did they contact you?
Yes he did file a police report for fraud said I didn't use the money the way it was intended even though it was a personal loan and the money was used for my trucking company well one man trucking company. The debt wasn't secure it was a personal loan just on my signature. I meant I had to pay the IRS for the tax on it once it was cancelled. I was making my monthly payments fine till I got sick.
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Old 06-06-2007, 11:16 AM   #4 (permalink)
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Yes he did file a police report for fraud said I didn't use the money the way it was intended even though it was a personal loan and the money was used for my trucking company well one man trucking company. The debt wasn't secure it was a personal loan just on my signature. I meant I had to pay the IRS for the tax on it once it was cancelled. I was making my monthly payments fine till I got sick.
The first question that comes to mind is, what was in it for this friend? Was he to get a portion of your profits, a business you were attempting to start? Surely you signed an agreement with him, didn't you? If the agreement that outlines the terms states that the money must be accounted for in such-and-such a manner, and you signed it and you cannot substantiate how you used the funds that very well MAY be considered fraud. I would get a copy of the police report and read it thoroughly.

A 103K unsecured personal loan is HUGE. Most lenders don't go over a quarter of that much on unsecured debt. Personal loan doesn't necessarily mean you can spend it on whatever you want to. If you agreed to certain terms and agreed to use the money in such and such a fashion, and you did not follow those terms precisely, whatever that may be, than your friend is out a lot of money at your hand and you actions could be considered fraudlent.

TWO ISSUES :

Issue one: Your getting ill and being unable to pay back the loan. That is civil.

Issue two: Did you use the money for the express purpose you agreed to? This could be criminal as well as civil ( fraud ) if you did not.

What does he say you used the money for and what DID you use the money for? The answer to that question determines if there was fraud involved.
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Old 06-06-2007, 11:55 AM   #5 (permalink)
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Originally Posted by GentleGrace View Post
The first question that comes to mind is, what was in it for this friend? Was he to get a portion of your profits, a business you were attempting to start? Surely you signed an agreement with him, didn't you? If the agreement that outlines the terms states that the money must be accounted for in such-and-such a manner, and you signed it and you cannot substantiate how you used the funds that very well MAY be considered fraud. I would get a copy of the police report and read it thoroughly.

A 103K unsecured personal loan is HUGE. Most lenders don't go over a quarter of that much on unsecured debt. Personal loan doesn't necessarily mean you can spend it on whatever you want to. If you agreed to certain terms and agreed to use the money in such and such a fashion, and you did not follow those terms precisely, whatever that may be, than your friend is out a lot of money at your hand and you actions could be considered fraudlent.

TWO ISSUES :

Issue one: Your getting ill and being unable to pay back the loan. That is civil.

Issue two: Did you use the money for the express purpose you agreed to? This could be criminal as well as civil ( fraud ) if you did not.

What does he say you used the money for and what DID you use the money for? The answer to that question determines if there was fraud involved.


The only thing that was on the agreement was the amount that was borrowed nothing else. Although I did spend the money on my trucking business and it wasn't $100,000.00 lump some it was so much here and so much there over a two and a half year span. There was no express pupose written on any agreement for what the money was to be used for, but like I said it was all used for my trucking business,
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Old 06-06-2007, 02:38 PM   #6 (permalink)
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Originally Posted by trucker533 View Post
The only thing that was on the agreement was the amount that was borrowed nothing else. Although I did spend the money on my trucking business and it wasn't $100,000.00 lump some it was so much here and so much there over a two and a half year span. There was no express pupose written on any agreement for what the money was to be used for, but like I said it was all used for my trucking business,
How did you have an agreement about the amount borrowed if you didn't know how much you were borrowing up front? I mean, you said he gave you some "here and so much there". If he gave you money here and there, how did you sign an agreement to repay? Do you have years worth of records and receipts to prove your claim you used the money for this purpose?

There is also the matter of verbal contracts which are surprisingly enforceable. To an average thinking person, it makes sense that someone didn't hand over a hundred thousand dollars for NO specific reason--you would have a hard time proving in court that he just handed it over to you for an unspecified reason.

What exactly does the police report allege?
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Old 06-06-2007, 10:01 PM   #7 (permalink)
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Quote:
Originally Posted by trucker533 View Post
I took out a personal loan from a friend in 12/2002 for $103,000.00 in 2005 it was discovered I had M/S, diabetes, and coronary artery diease and had to stop working and with nothing coming in I defaulted on the loan. I recieved a 1099C cancellation of debt return this year for the full amount I owed so I filed it with my taxes and had to pay it. But now the personal lender is having me investigated by the police for fraud and I just can't take anymore stress with my health and very little money coming in. How many more things can this personal lender do to me? I made my payments till I got sick and had a hardtime walking.
If any police department is currently investigating fraud charges against you, I would rather firmly suggest you contact an attorney in your area. You and he/she can discuss and review the exact terms of your personal loan; you can provide any documentation he/she needs to both familiarize themselves with your circumstances; he/she can help translate the police report so that you clearly understand what accusations were made, and if need be, then he/she (and you, of course) can decide what plans to make for your future. Many of your questions can probably be answered in a preliminary (possibly free) initial consultation. Each loan agreement is different; each carries its own terms and conditions, and without a qualified individual reviewing either any written document in its entirety or hearing the entire verbal agreement, you can't be assured of the validity of an answer. I will be the first to back out of attempting to answer your post directly. There are far too many details and variables to even begin .. except for the most obvious suggestion. (My opinion.)

All I can really determine by your initial post is that you've entered into a personal loan agreement and that for what EVER reason, your creditor has gone to the police department. Obviously something happened in between those two points. If you're not comfortable discussing them in great detail in an open forum, you're under no obligation. My point in responding to your post is simply to state that I think your questions can probably best be answered more to your satisfaction by a local attorney, especially if there is a police department involved. What appears to have begun with a simple signature loan 2 years ago is now in the hands of law enforcement.

My final suggestion? If you haven't already obtained a copy of the police report, at least attempt to do so. Gather your paperwork, including the original agreement you signed and even your filed IRS returns. (Cancelled checks, receipts, etc will help document what you used the proceeds for.) If you're able, put the entire 2 years down in writing to detail the agreement, any pertinent conversations regarding the loan, etc. (That will help save valuable time and may even prompt a few forgotten details.) Then schedule a consultation or even if needs be, conduct a telephone consultation with a licensed attorney in your area who is familiar with your state's laws. *I've passed along additional information via private message above. Hopefully, it may help until you decide what to do.*

Good luck.

Last edited by TheJury'sStillOut; 06-07-2007 at 06:30 AM.
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Old 06-07-2007, 06:10 AM   #8 (permalink)
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How did you have an agreement about the amount borrowed if you didn't know how much you were borrowing up front? I mean, you said he gave you some "here and so much there". If he gave you money here and there, how did you sign an agreement to repay? Do you have years worth of records and receipts to prove your claim you used the money for this purpose?

There is also the matter of verbal contracts which are surprisingly enforceable. To an average thinking person, it makes sense that someone didn't hand over a hundred thousand dollars for NO specific reason--you would have a hard time proving in court that he just handed it over to you for an unspecified reason.

What exactly does the police report allege?

I signed the first agreement for $47,000.00 on 01/2002 then on 12/2002 I signed another agreement that superceded the first one and
it was setup as a line of credit for $100,000.00 which included the $47,000.00 loan that was made to me back in 01/2002. Even though there is nothing in either agreement that states what the money was for it was understood it was to help me with my trucking company and that is where every dime went into my trucking business. I asked the police what the report said and he told me that they are still investigating there is no report as of now. The police officer told me that the person that lent me the money came in to make the complaint about seven or eight months ago and they just started investigating it. The person that made the loan to me is a financial advisor for investments, brokerage, and financial advisory services. I can't understand why he didn't say something about this five and a half years ago when the first loan was made to me.
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Old 06-07-2007, 06:41 AM   #9 (permalink)
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I signed the first agreement for $47,000.00 on 01/2002 then on 12/2002 I signed another agreement that superceded the first one and
it was setup as a line of credit for $100,000.00 which included the $47,000.00 loan that was made to me back in 01/2002. Even though there is nothing in either agreement that states what the money was for it was understood it was to help me with my trucking company and that is where every dime went into my trucking business. I asked the police what the report said and he told me that they are still investigating there is no report as of now. The police officer told me that the person that lent me the money came in to make the complaint about seven or eight months ago and they just started investigating it. The person that made the loan to me is a financial advisor for investments, brokerage, and financial advisory services. I can't understand why he didn't say something about this five and a half years ago when the first loan was made to me.

At the time you entered into the loan agreement, I'd hazard a guess that both of you were under the impression (and intent) that nothing would interfere with it. It appears from what you've posted that the "good faith" remained until circumstances prevented you from paying the loan in full. Again, I would recommend you gather your paperwork. I think I'd also ask the attorney if any interest charged on your loan (if any) is considered 'reasonable.' One would hope that an individual in the career field you mentioned is certainly aware of "usary" fees.

Again, good luck.
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Old 06-07-2007, 08:06 AM   #10 (permalink)
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Originally Posted by trucker533 View Post
I signed the first agreement for $47,000.00 on 01/2002 then on 12/2002 I signed another agreement that superceded the first one and
it was setup as a line of credit for $100,000.00 which included the $47,000.00 loan that was made to me back in 01/2002. Even though there is nothing in either agreement that states what the money was for it was understood it was to help me with my trucking company and that is where every dime went into my trucking business. I asked the police what the report said and he told me that they are still investigating there is no report as of now. The police officer told me that the person that lent me the money came in to make the complaint about seven or eight months ago and they just started investigating it. The person that made the loan to me is a financial advisor for investments, brokerage, and financial advisory services. I can't understand why he didn't say something about this five and a half years ago when the first loan was made to me.
First of all, the police CANNOT keep you from having a copy of the police report. ANYONE can have a copy of it--it is not privileged information. I suggest you go, in person, to the police station and ask for a copy of it. They MUST, by law, provide it for you. They CANNOT investigate ANYTHING without a police report. It is preliminary--it MUST be first. They do not investigate to see if there is "enough evidence" to write a report. The report is basic. First. Always.

Secondly, the only defense against fraud is paperwork. Proof you spent the money as you said. If there is nothing in the paperwork to stipulate what the money is for (aside from the verbal agreement)then you both have an equal chance of proving the terms were or were not violated.

I do not have a crystal ball but I cannot understand what would be fraudulent about what has transpired. Since the terms do not state otherwise, it would be difficult for him to prove intent. And, since you DID, in fact, pay on the loan until circumstances beyond your control transpired, I believe that demonstrates good faith. I believe his case against you for fraud is slim. If the police become involved, THEY would spend a great deal of time and effort trying to prove something (that you misappropriated funds) and from what you have said, that was not even outlined in the agreement specifically what the money was for.

I don't see how that meets the legal definition for fraud.

I certainly would call an attorney for a free consultation--but do not go without a police report--that is the proverbial ground zero. IF there is no police report, you could presume this is all posturing and bluff from someone who is mean spirited enough to try to press criminal charges for something that clearly is civil.
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