Social Media As An Evidence Tool: Uncovering Fraud With Social Media Technology

Unknowingly, the children of wealthy parents have been unwittingly providing evidence against their parents through social media platforms when posting photographs of their luxurious lifestyles online.  It has not been uncommon for some of the super-wealthy and affluent to attempt to hide assets from taxation and government scrutiny by bookkeeping trickery or simply moving assets overseas.  While some families choose to significantly underreport their earnings or assets in order to avoid paying high amounts of taxes, their lies have become increasingly exposed through social media as an evidence tool.  

Fraud Investigators Increasingly Look to Social Media for Uncovering Evidence of Fraud

Fraud investigators report they have been able to use social media technology as evidence to prove the hiding of assets.  While many perpetrators (i.e., parents) are not themselves on social media platforms, their children often post daily, or even hourly, on platforms such as Instagram, Facebook, and Twitter.  These posts that often include photographs of extravagant vacation resorts, expensive cars, or even stacks of cash can now be used as evidence against people intending to hide such wealth.

Recent studies in the field revealed utilizing social media as an evidence tool now comprises up to 75 percent of evidence used in such litigation cases.  For example, in one debt recovery case where a man claimed to have no assets for repayment had his lies revealed when one of his children posted a photograph of the family’s $22 million yacht while vacationing in the Bahamas.

Geolocation Technology in Social Media Acts As Tool For Evidence Discovery

In many of these cases, investigators also use the geolocation of where the posts to social media were made to help build their cases.  Investigators have been able to find significant amounts of unreported assets and money by cross-referencing social media posts with land registries overseas.  With such specific evidence turned over to the courts, these assets that previously were often concealed overseas can now often be found with specificity.

Investigators have also been able to use such posts to build up profiles on not only the intended targets but on their associates as well.  More specifically, because the like-minded perpetrators often run in the same social circles, investigators have been able to use social network posts to catch associates or build parallel profiles on targets that have been under the same scrutiny. 

Social Media As An Evidence Tool To Catch Hackers

Investigators have also been able to use social media posts to track down hackers of social media accounts and protect or recover the assets of those being hacked.  Information disseminated in social media can often leave hints for hackers to strike. Wealthy families that have fallen victim to hackers being able to guess or crack passwords to their social media accounts have also been able to use investigators to track down hackers based on fake social media posts.  In one case, hackers were caught once they began to send invoices for private jet trips, luxury estates, and shopping sprees to the wealthy family’s office.   

How Will Innovations in Social Media Technology Influence Evidence Gathering for Fraud?

As technology continues to evolve and new innovations are created in how information is dispersed in social media, we can expect that investigators will be able to use such social media tools as evidence with increasing efficiency and speed.  Intellectual property attorneys also often use social media to identify, track down, and or prove IP infringement.  While social media may be seen as a mere social outlet to some, others could be utilizing the public information for legal purposes (building a case) or illegal purposes (hacking and crime).  

As seen recently, in the ongoing case of the college admissions scandal, what you put out in social media can be used against you, even when you don’t expect it. Therefore, all social media users should be aware of what they and their family members post, and keep mindful of the consequences of sharing private information publicly.

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Klemchuk LLP is a litigation, intellectual property, transactional, and international business law firm dedicated to protecting innovation. The firm provides tailored legal solutions to industries including software, technology, retail, real estate, consumer goods, ecommerce, telecommunications, restaurant, energy, media, and professional services. The firm focuses on serving mid-market companies seeking long-term, value-added relationships with a law firm. Learn more about experiencing law practiced differently and our local counsel practice.

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