Catherine Bell explains how a Ponzi scheme unraveled when perpetrators broke basic LLC rules. Each real estate deal needs its own LLC with a separate bank account. Mixing personal expenses or combining properties in one LLC lets authorities pierce the corporate veil and seize assets.
based on all our discovery of some stuff that's happened with something. Anyway, long story short, it turns out it's a Ponzi scheme and there's been some criminal activity in the sense of piercing the corporate veil. So I want everybody to understand piercing the corporate veil. So when you have an LLC, like every deal that you do needs to be in its own LLC, right? And the importance of having your own LLC for it is that it protects the asset, but it protects the people and everything around it, right? But there's rules around having an LLC. Your LLC isn't your personal bank account. It is a business bank account. All money coming in and out must only be associated with that particular property or project or LLC. You can't be like taking vacations with it or, Hey, I'm going to go buy some shoes and there's like money in that account, so I'm just going to spend it on whatever. You do that, it's called piercing the corporate veil. When you pierce the corporate veil, all the rules and protections around having that LLC now disappear and you feel like you're— these rules don't apply to you and you pierce the corporate veil. Now that's where when you've pierced the corporate veil, all those protections are gone. Now you're vulnerable to— there's just a whole world of laws that when they get broken, you're screwed. You screwed yourself. And so, Trevor, we're talking about the importance of LLCs, and when you have an LLC, to never ever pierce that corporate veil. But the point is that they pierced the corporate veil by doing some really stupid stuff, and because of that, they now have exposed themselves, which now gives us the ability to literally press criminal charges and go after them and the assets and all the things. It's that each individual property that you have needs to have its own LLC. You never want to put two properties into an LLC because if something happens to one property, then you could literally lose both. So some people think that it's a giant pain in the butt, like, what does it matter? No, it actually really matters. I literally have like an entire closet of all the binders of all the LLCs because each asset needs to be protected in each one. You never know what's going to happen, right? So the protecting the asset and the investors and protecting the money literally is at the top, which is why, again, so I— why I love this country so much. It's that the laws are there to build an incredible empire, to go make a difference, and which we're all here to do. But you need to play by the rules and protect it all as well.
