How Do You Know That Your Exchange Funds are Really in the Bank?



In recent months we've learned of Bernie Madoff and others who perpetrated frauds upon their clients, most recently, Russell Wasendorf, Sr. of Peregrine Financial Group (PFGBest). These trusted investment brokers created fake statements to cover up their theft of client funds. Wasendorf has admitted that he forged actual bank statements using scanners, Photoshop, and desktop printers. He fooled auditors, regulators and clients into thinking that there was proof from the bank that client funds were all there.

We at Investment Property Exchange Services, Inc. (IPX1031) take security of client funds seriously. We have multiple safety and security features in place, but stories like this make us all wonder, “Is my money really safe?”

At IPX1031 the answer is decidedly, “YES.”
  1. As a large company, we are able to protect our clients through a separate banking staff that handles everything related to client funds. Neither coordinators, sales executives, nor the President or other senior management of IPX1031 have any rights or abilities to open or close bank accounts or to transfer funds. Control over our bank accounts is strictly limited to our multiple person banking staff. Separation of duties is a critical audit control, and having dedicated staff in which no single person has unfettered control or access over bank accounts eliminates opportunities for embezzlement of our client funds.

  2. All of our clients receive monthly statements directly from the bank, not from the Qualified Intermediary. IPX1031 is never in possession or control of the statements sent by the bank to our clients. This separation eliminates any opportunity for any fake statements and allows our clients to see all transactions and balances affecting their accounts.

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