Be careful if someone tells you’ve won a big prize.

By James Ward

James Ward

When our clients decide to leave money to a charity, it’s usually to their local church or the university they attended or a well-known charity such as St. Jude’s, the Alzheimer’s Association, or the SPCA. Sometimes, however, it’s to a somewhat obscure charity and we have to research a bit to make sure we’re finding the right charity.

In rare cases, however, it looks like the donor is making a donation to a fraudulent charity. I found one apparent fraud operated by a financial advisor and his wife, and another operated by a husband-and-wife couple of attorneys. If something doesn’t seem quite right, I counsel and challenge the donor to see how much they know about the charity, and whether they’re making the right choice.

I recently had a client who wanted to donate more than $500,000 to a man who runs a pet rescue operation in Spain. She had forwarded an email from him where he apologized for his delay in responding, but he had just returned from a seven-hour rescue operation to save “Fluffy.”

Really? Something just didn’t seem right, so we followed the leads she gave us. (She has been making small donations for years to support various animals he claims to have rescued.) His “headquarters” in The Netherlands gave us their information, but the Internet was full of claims he was a total fraud and preyed upon people who wanted to help rescue pets. He has reused the same photos again and again in different countries and has actually been arrested for fraud in Spain, but my client stuck to her guns that “she has communicated with him previously, and he’s such a wonderful man.” — Note, almost all successful scammers are polite and courteous individuals. That’s how they exceed with their scams.

From what I know of international tax law, if he is a Dutch citizen living in Spain, he very likely pays no income tax in either country. But, if he’s running a total fraud circus, then he’s running ahead of the law and hiding whatever needs to be hidden to live his wonderful lifestyle.

A quick check on a cost-of-living comparison between his coastal area of Spain and our Silicon Valley area of California makes the gift seem to have a value of more than $1.5 million to this apparent fraudster, and without him paying a bit of income tax. This is an example of why international scammers exist, and why they keep pushing. What’s the cost of a simple website and posting photos of a few stray animals? It’s minimal.

Despite my efforts to persuade her otherwise, it is her money, and this is what she wants to do with it after her death. At least she’s still hanging onto her money until death so that it can be used for her care — but that’s not the end of it. Her donations to the group have so far been very small, but then she asked if I’ve had other clients who have won the Publishers Clearinghouse Sweepstakes. NO! PLEASE! This is a well-known scam! Don’t fall for it!  I begged her to not fall for it, but she was pretty sure she had already won.

I advised her that I had one client who had been on the verge of falling for this same scam, and another who had actually lost $80,000 to the scam. There actually is a Publishers Clearinghouse Sweepstakes, and they recently paid more than $18 million to settle claims of illegal and deceptive practices, but there are also huge scam operations using the name and logo of the Publishers Clearinghouse Sweepstakes to scam millions of dollars away from unsuspecting seniors.

Be careful with donations, and be careful if someone tells you’ve won a big prize.