Man Tries to Fake Death But Botches The Job- Why You Should Diversify Your Money Manager
By Stacie Clifford Kitts, CPA
A 38 year old money manager and part time pilot who allegedly stole millions from investors, tried to fake his own death by jumping out of the plane he was piloting just after informing air-traffic controllers that his windshield had imploded. The plane subsequently crashed in East Milton Florida.
Once he had parachuted to the ground, the crooked money manager approached a home in Alabama and claimed that he had been in a canoeing accident.
The local police took him to a hotel where our crook checked in under a fake name. Authorities later discover that he had hidden a motorcycle nearby and had apparently used it to skip town. The bad guy has yet to be caught.
Sounds like the plot to a bad movie – but sadly, it is not.
People who handed their money over to Heritage Wealth Management described Marcus Schrenker (our crook) as a smooth talker according to CNN.
Apparently, Mr. Schrenker was stealing money from investors – who were also his friends and neighbors – through an annuity scheme.
If you have been following any of the Bernie Madoff ponzi fiasco you might notice that this story is eerily similar in an important way. In both cases, investors claim to have been clueless about what their supposed money managers were doing with their money – in the Madoff case all they really cared about – it seemed – was the amazing return they appeared to be getting on their investments.
As reported by CNN, many people who handed their money over to Mr. Schrenker indicated that they had little information about what he was doing with it or how it was being invested.
In light of recent revelations, handing over 100% of your wealth to one person to manage is obviously a choice that should be highly scrutinized.
In my opinion, both of these story’s represent clear examples of why we should diversify our money managers and not just our investment choices.
Lets face it, how would you know if your money manager was ripping you off? Mr. Madoff even handed out fake account activity statements to his investors. Heck, he supposedly had his funds audited by an accountant for heaven sakes.
Frankly, you could have called either of these men your friend – and yet they still would have stolen your money.
Choosing a Tax Preparer
Published by the IRS
If you will be paying someone to do your tax return, choose a tax preparer wisely. You are legally responsible for what’s on your tax returns even if they are prepared by someone else. So, it’s important to find a qualified tax professional.
The most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions, and other items. By doing so, they have your best interest in mind and are trying to help you avoid penalties, interest, or additional taxes that could result from later IRS contacts.
Most tax return preparers are professional, honest and provide excellent service to their clients; you can use the following tips to choose a preparer who will offer the best service for their tax preparation needs.
Find out what the service fees are before the return is prepared. Avoid preparers who base their fee on a percentage of the amount of your refund or who claim they can obtain larger refunds than other preparers.
Only use a tax professional that signs your tax return and provides you with a copy for your records.
Avoid tax preparers that ask you to sign a blank tax form.
Choose a tax preparer that will be around to answer questions after the return has been filed.
Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys. Find out if the preparer belongs to a professional organization that requires its members to pursue continuing education and also holds them accountable to a code of ethics.
Determine if the preparer’s credentials meet your needs. Does your state have licensing or registration requirements for paid preparers? Is he or she an Enrolled Agent, Certified Public Accountant, or Attorney? If so, the preparer can represent taxpayers before the IRS on all matters – including audits, collections, and appeals. Other return preparers can represent taxpayers only in audits regarding a return signed as a preparer.
Before you sign your tax return, review it and ask questions.
You can report suspected tax fraud and abusive tax preparers to the IRS on Form 3949-A, Information Referral or by sending a letter to Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A from IRS.gov or order by mail at 800-829-3676.
