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The Thailand Investment Scam

easy money

easy money

With every positive invention, scams invented by unscrupulous operators follow. Here is a story about how one scam came across my desk for two different clients in the same week!

The first case: A new client was referred to me. The task was to assist in a transaction where a Kuwaiti company was going to purchase 10% of the client’s equity for $5.5 million. The investor had located them through an Angel website (an Angel is a high net worth individual that is interested in investing in startups). Naturally, the client was ecstatic. They had not raised even 10% of that sum yet.

I had some healthy skepticism, but my task was to investigate and counsel, not to jump to conclusions.

The investor wanted to fund the investment through a Thailand company and recommended two Thai law firms. I checked both firms out through their websites. A US lawyer was a partner in one of the firms so I choose to start with that firm.

I spoke to the lawyer and everything seemed fine- at first. I did some heavy due diligence to make sure this lawyer and his firm were legitimate (the website looked real and the firm roster was deep; also, the lawyer had ostensibly authored a legal treatise).

The Thai lawyer (contact me for the name), sent the client an invoice- $2500 flat fee for his due diligence and $9500 for Thai registration- payment due in advance. My fraud indicator started redlining. One, the lawyer had changed his fee schedule (he quoted me an hourly rate). Two, what country charges $9500 to register a company? In the US, states charge between $50 and $250.

My client wasn’t ready to throw in the towel and I agreed that a little more digging was worthwhile. So, we asked the investor to send the investment contract to us. Once I saw this, I knew a scam was afoot as the contract did not resemble a contract prepared by anyone with $5.5 million to invest. Another red flag!

I wrote to the investor and suggested a few legal measures that would assure my client that he was a real investor. The response was all derision and scorn towards me and my ideas and complaining that my client had already agreed to the proposed structure.

After this message, my client was satisfied that the investor was running a scam. And, he told me that the investor had rejected the first Thai firm that my client had tapped to assist them!

The second case: A good friend is attempting to raise money for a stock trading platform. He was contacted by representatives of a large Thai chemical company. After asking him some questions and having him fill out a few applications, they were willing to invest $26.5 million in the trading platform.

One small catch: he had to register this company in Thailand. The cost: $13,000.

Needless to say, after dozens of polite emails, no money changed hands.

Lessons to be learned:

1. Even if you aren’t looking to raise money, you never know who you are dealing with on the web. I still don’t know if the “investor” was the person he said he was. He claimed to be an executive in a Kuwaiti construction company. You could see “his” name on that company’s web site. But, was the person on the website the person sending the emails?

2. Don’t trust someone else’s lawyer, especially if they are recommended to you by a counterparty. The Thai lawyer appeared legitimate, but he was not. The lesson: hire your own lawyer who only has loyalty to you and comes recommended by someone you trust.

3. If something looks too good to be true, it probably is. This is a real pitfall for entrepreneurs. They live their company’s ups and downs and they believe in its promise. But, they are the opposite of objective. So again, hire a good advisor (lawyer or investment professional) to help guide you with your raising funds. With that advisor’s help, you should adjust your sites about what the parameters are for a reasonable investment. If the offer isn’t in the ballpark, it may be a scam.

If you want more information, contact Avrum Aaron at 201-379-9230 or avrum@lop-llc.com.

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3 Negotiation Lessons from the Iran Nuclear Deal (and 1 Counter-Lesson)

Kerry

John Kerry rates the deal on a scale of one to ten.

Whether you are for or against the deal between the US-led world powers (I’m going to refer to them as the US) and Iran relating to Iran’s nuclear program, one thing that can’t be disputed is that the final deal seems a lot less restrictive for Iran than the prospective deal that had been discussed when the negotiations started. For example, Iran didn’t give up a single centrifuge and went from “anywhere, anytime” inspections to inspections upon 23 days notice.

Now, while I’ve negotiated many deals, I’ve never negotiated a deal with anywhere close to the historical significance of the Iran nuclear deal. It’s easy to second guess leaders and point out where they could’ve done better. However, as someone who has been an attorney for 20 years, I think some of what transpired in the negotiations can be elucidating to those of us who negotiate everyday business transactions.

Here are 3 lessons and 1 counter-lesson:

1. You are only as strong as your ability to walk away.

This one I heard from my mother. It seemed pretty clear with all the delays in the deadlines that the US was not going to walk away from making a deal, any deal. Along with the rest of the world, the Iranian negotiators knew this and could basically decline to agree to any point they didn’t like knowing the US would eventually relent.
If you need the gain the upper hand in negotiations, consider walking away. If you can, let your counterparty know. You’ll see the change in dynamics.

2. If your counterparty thinks you need the agreement, she has the upper hand.

This is close to point 1, but a little different. Again, it seems that President Obama needed the agreement to shore up his dearth of foreign policy achievements. No doubt Iran watched the fit the White House threw when Israeli Prime Minister Netanyahu was invited by Speaker Boehner to address Congress.

If you are in a negotiation and you give the other party the impression that you must make this deal, you are at a huge disadvantage.

3. An agreement is only as good as the party signing it.

This is probably the point with the most importance, as it goes beyond negotiations to actual contractual performance. As many commentators have pointed out, the key to the Iranian deal is trusting Iran to stick to their obligations. Proponents of the deal tout the fact that the deal displays little to no trust of Iran. Opponents say the deal shows Iran way too much trust, given that nation’s record.

The issue of trust arises a lot in business negotiations. It is crucial to assess what level of trust you have with people you deal with. It is equally as crucial to find an attorney who knows how to make the issue of trust less important and arrange your contracts so you have more to rely on than trust in your counterparty.

The Counter-Lesson

There is one facet of the Iranian agreement that I don’t think translates into the world of every day negotiations.

Negotiations that drag on usually do not end in agreements. With all the missed deadlines in the Iranian agreement, if it would have followed the usual pattern it never would have ended in an agreement. In the business world, negotiations that stop and start and have significant delays usually end in no deal. Deals have momentum and if they lose that momentum they usually don’t close. Maybe, that’s a difference between normal deals and historic international covenants. We observed the same phenomena in the Greek Debt agreement with the EU.

Avrum Aaron, Esq. is the COO of Legal Outsourcing Partners, LLC (www.lop-llc.com). He’d like to negotiate on the other side of the table from John Kerry. He can be reached at 201.379.9230.

How Politics Can Ruin Sports

salute

It’s hard for Americans to understand just how important soccer is to the rest of the world. Let’s just say they call it football and it’s as important to the rest of the world as baseball and (American) football are together, and more, to Americans. The recent big news in the soccer world is that FIFA (Fédération Internationale de Football Association), the governing body for world soccer, was considering a ban on Israel in international competition based on the Arab-Israeli conflict (sometimes called the Israeli-Palestinian conflict).

I won’t share my opinion on what I think of this attempted ban. Anyone who knows anything about me can figure out that on his own. Also, the proposed bid was withdrawn at the last minute- so, the issue has been set aside for now.
What I would like to write about is: How the introduction of politics into international sports competitions has been shown to be a recipe for disaster.

I’m not going to consider politics in non-international competition where the mix can be a positive engine of change. Witness the integration of minorities in professional sports during the 50s and 60s.

Of course, politics has been present in (international) sports since the Olympics- the ancient Olympics. And, the Olympics is the international competition where politics is most prominent and causes the most damage.

Arguably, the first overtly political demonstration in the Olympics was in 1968 when US sprinters Tommie Smith and John Carlos raised their fists in a Black Power salute. (See the picture above). While they were heavily criticized, nothing about their display harmed the competition. In 1972, Palestinian terror group Black September killed 11 Israeli athletes at the Munich games. (The irony of the contradistinction to the present proposed ban has not been lost on the careful observer). This massacre did not halt any athletic aspect of the games- a decision which has been harshly reviewed by some. The fact that that the IOC refuses to hold even a moment of silence for these dead Olympians is a source of shame to the Olympic ideal.

Moving 4 years ahead to 1976- Many nations boycotted to protest South African Apartheid policies.

1980- The US led 65 nations in boycotting the Moscow Olympics, due to the USSR’s invasion of Afghanistan.

1984- In response to the 1980 boycott, the USSR led 14 nations in boycotting the Los Angeles Olympics.

All in all, politics ruined the Olympics three straight times. Specific events were simply not the same without the participation of all the nations of the world and the Gold Medalists in those events will always appear in the record books with a figurative asterisk.

But, why shouldn’t the nations of the world use sports to advance their political goals? What’s wrong with that?

Athletic competition is supposed to be about athletic competition…and nothing else. Unlike almost every other encounter in the world, athletics is the one arena where all the externalities should not matter. When two boxers step into the ring, it doesn’t matter what race or color they are, who they pray to, who has more money, whose family is more prominent or who is more educated or privileged. It’s all about who is the better boxer and that’s the beauty of sports.

It would be great if a courtroom could be like that, but sadly it’s not even close. All the factors which don’t matter in sports make their way into the law- as (perhaps) nowhere else. That makes sense. Laws are made by politicians. Judges are elected or appointed by politicians. Judicial decisions can have major political implications. The list goes on and on.

But, in sports, politics obliterates that pure competition that makes sports appealing.

Modern history has shown that the intrusion of politics into sports has harmed sports. It behooves all sports fans to reject the intrusion of politics into sports.

Avrum Aaron, COO of Legal Outsourcing Partners, LLC (www.lop-llc.com), is a huge sports fan and would love to hear your opinion. avrum@lop-llc.com.

The Efficient Breach

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Here’s something that probably happens all the time.

A longtime client called me the other day with this story: He found a used car that he really loved: a 2005 PT Cruiser Convertible in perfect condition with 17,000 miles on it. He agreed to buy the car on Thursday. The dealer signed the purchase agreement, but refused to take a deposit even though my client offered twice. On Monday, the dealer told him that they sold the car to someone else. My client called me to explore this options.

This is an interesting case because of the contractual doctrine of Specific Performance. (At least, I thought it was interesting). Usually, when a buyer agrees to buy something and the seller doesn’t deliver, the buyer is required to buy the good elsewhere and, if she pays more or incurs other expenses, can sue the defaulting seller for the difference. This is derived from the aggrieved party’s duty to mitigate damages when a contract is breached.

However, an exception to this rule exists with a unique good. The classic example of a unique good is real estate, since no two parcels are exactly the same. Other unique goods would include original art work as there is only one Mona Lisa.

But, is car a unique good?

Here are the two extremes:

1. Yes, if it’s the car that the Secret Service confiscated from Al Capone and was used a few time by FDR as a limousine (Shout out to the History Channel for that one!).

2. No, if it’s the new car you bought last year.

Unfortunately, the deliberation ends here, because my client had no interest in pursuing the car; He didn’t trust what the dealer would do to the car is they had to deliver it to him.

My client’s best option was to try to find a similar car and then sue for the difference, assuming he paid more for the substitute.

Which brings me to the subject of this post? Is the remedy and method to reach that remedy enabling dishonesty?

Here’s how that works: the dealer agrees to sell a car. Until the customer picks it up, the dealer holds the car for sale to any higher bidder. If the dealer gets a better he just breaches the first sale contract and makes more on the sale. Besides being dishonest, what’s the dealer’s downside? The aggrieved seller has to find another car and then sue the dealer for the difference. There is a good chance the customer will find a car for a similar price and even if the customer pays more, he still has to sue the dealer in court and prove that there were damages. (The dealer will likely argue that the difference in price was due to the second car being superior in some way- less miles, better condition, better options, etc.)

So, the dishonest dealer can put a few extra dollars in his pocket and worry about the legal fallout later.

And the law doesn’t care??!!

The answer is yes, the law doesn’t care. The law isn’t about making people behave well, honestly or decently; It’s about administering an efficient marketplace/society and this is the optimal result.

This phenomenon even has a name; it’s called – “The Efficient Breach”.

Do you think it’s fair?

Avrum Aaron, Esq. is the COO of Legal Outsourcing Partners, LLC. http://www.lop-llc.com. You can write to him at avrum@lop-llc.com and let him know if you have an efficient breach story.

Can a Notary Notarize outside her State?

seal

As a US lawyer that lives outside the US, I am often asked to notarize documents for US citizens. This should be pretty simple. After all, I am a New Jersey Notary by virtue of the fact that I am admitted to practice law in New Jersey. Since I can practice law while I am outside New Jersey, I should be able to notarize when I am outside New Jersey.

Pretty simple- but, not so fast.

There are those that say that a notary can only notarize when he or she is physically located in his state. This is the position of the American Society of Notaries (http://www.asnnotary.org/?form=jurisdictionissues). Of course, they have as much authority to make state law as the American Automobile Association has to set state speeding limits. That is, none whatsoever.

To read the rest go here: http://legaloutsourcingpartners.com/category/blog/

Do What You Love

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I’m not sure who originated this idea, but it goes something like this: Find something you love, get good it and you’ll find yourself a successful career that meets all your expectations. That’s great advice, but does it really work?

Sure, I can see it working for musicians and athletes, but what about the other 99.9% of us- the lawyers, accountants and sanitation engineers of the world. A better formulation would be find something you like and try to make a go of it.

How many of us really love the work we do? Do lawyers like their jobs?

When I worked in the big New York law firm scene, I would have said no. With the little free time we had, we would swap horror stories, complain of the long hours, and tell the success stories of the colleagues who made it to the investment banking world. We were young and immature.

Now, 20 years in and very far from that scene, I see it differently. When I am running an outsourcing company, 6000 miles from Manhattan and with a 7 hour time difference, I still speak to tons of lawyers and I hear little complaining. Maybe my team, applicants and my lawyer clients don’t feel comfortable opening up to me. I’d rather chalk it up to maturity. A pessimist might chalk it up to defeat.

But, if I ever get down about some of the more tedious stuff that lawyers have to do, I think about two jobs (among the thousands that, in my opinion, are worse than mine): police who deal with rioters and people who physically maintain the sewage system; and I thank God and my parents that I went to college, law school and I don’t have their jobs.

So, overall for lawyers the glass may be half full, or half empty.

But, there is something lawyers can do to steer their efforts to the stuff they love, or at least, like. Lawyers do a lot of tasks- they analyze, they research and study the law and they present arguments verbally and in writing, etc. Some lawyers are great at delivering an oral argument, but they don’t like the research. Some lawyers like the analysis, but they don’t like having to formulate it in writing. You get the idea.

What these lawyers can do is turn to an outsourcing firm where other lawyers are more than happy to fill in and do the less desired tasks. I’ll illustrate this with an example: I have one client who runs a small law firm. She’s great at dealing with clients and bringing in business. But, she’s one woman with 24 hours in the day. So, she looks to my firm (and other lawyers outside my firm) to do the things that she can’t.

It’s a win/win. She does what she likes, what she’s good at, and my team supports her effort to give his clients excellent service.

She does what she loves and succeeds.

Avrum Aaron, is the COO of Legal Outsourcing Partners, LLC. Check out the website- http://www.legaloutsourcingpartners.com or call him at 201-379-9230.

Linked-In Protects a Stalker

stalking

Since 2008, my wife and I have been pursued by a stalker. He’s called our employers, colleagues, schools and anyone else he could talk to and spread slander about us. These calls caused our family direct harm in a few ways. We only discovered this in 2012 after several years of “mystery callers” to our contacts. It’s a long story, but it’s not for this blog. (If anyone is interested, the court filings are a matter of public record.)

What I want to write about is how hard it is to get the authorities to take these crimes seriously and how even private companies protect evildoers for the sake of the privacy (of the criminal).

Although we tried, no one at the police took our claims seriously. A violated restraining order was put in front of the courts and the judge dismissed it on a technicality she herself created.

But, that’s the public system. Those police have to fight murderers and rapists every day. The courts see all kinds of crazy things. So, when people accuse a man of stalking them via telephone calls, I understand that nobody really cares that the law is violated. It isn’t right; but its reality.

I didn’t expect Linked-In to take such a pro- stalker approach. I would think they would want to protect their real members from harm. But, maybe they are just asleep at the switch?

Here’s what happened:

On the same day, my wife and I received invitations to “Link-In” with someone named Green that works at Shell in Whitewater, Wisconsin. “Mr. Green” had attended a University in Aberdeen in the UK. The requests were kind of strange because neither I nor my wife have ever studied in the UK, nor been to Wisconsin, nor worked in the Petroleum industry. We had already discovered that our stalker has previously used Linked-In to try to “link” with other family members and friends through various sources, attempting to use those connections to gather employment and personal information about us. He uses various personas, races, pictures, connections to do so.

I contacted Linked-In, told them the story in brief and asked them to reveal the email address of “Mr. Green”. They declined because they could violate HIS privacy. He reached out to me and my wife in the same day- not us to him. We strongly suspect a stalker and HIS privacy is inviolate.

To Linked-In’s credit they did respond with some ways that I could block “Mr. Green” from contacting me again. And, they gave me a chance to make a “formal request”- whatever that means. Of course, these are totally unhelpful to me, as our “Mr. Green” will simply create a new persona, picture, background, fake Linked-In profile and try again. But at least somebody at Linked-In feels they are protecting their members, but perhaps not the right ones.

Avrum Aaron, Esq. is the COO of Legal Outsourcing Partners, LLC. (www.lop-llc.com). He can be reached at avrum@lop-llc.com.