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I work as a freelancer, alongside my regular dayjob, for several different people with all sorts of odd needs for software.

One those clients asked me to do something highly illegal. This isn't something that might be considered a privacy issue or some gray-area situation that might be a problem under certain circumstances. This is an outright scam, and if I proceed with what he is asking, a poor sod on the other end will end up losing several thousand dollars.

Usually I just ditch unethical clients, but as now he owes me money for dozens of hours I poured on one of the features for his software, and he already made it clear that he'll refuse to pay me anything if I don't help him out to conduct this scam.

This puts me in a delicate situation - I won't exactly go hungry if he doesn't pay me, but it is a rather large amount of money that I feel bad for just giving up. Worse even is that, if I refuse to do this thing for him, he'll just find someone else who doesn't mind about hurting others and the poor bloke on the other end will end up scammed nevertheless, unless I do something to prevent this from happening.

So far, my current plan is this:

  • Stop working with this client ASAP. Refuse any sort of communication.
  • Warn the authorities about the scam. While they didn't start scamming anyone yet, I have the paper trail that shows up the intention to do it and the step-by-step of the scamming process.
  • Warn their intended targets (I have their names and contact information) that a scam like so and so may be coming their way soon-ish. This is a delicate thing - I think the authorities might be the one that could do this properly, but I have no way of knowing whether they'll do so in a timely manner and I would feel bad to see a couple families losing their savings because a wicked bloke tricked them into a fake bitcoin thing.

Is this an adequate way of dealing with this situation?

UPDATE

After some rather long deliberation, I checked in with a lawyer. She helped me sort the situation with the police, and what steps I needed to take in order to keep my butt safe from possible retaliation.

I provided the police with all the information I had, and they took on their own to warn up the intended targets of the scam. They assured me they would do so as quick as possible, to prevent people from using their yearly bonus (usually paid on the end of November) on anything of the sort.

For the money they owe me, I'm going to solve that on the small claims courts. My lawyer told me that it is unlikely that I'll ever see a penny from it, but that's the shot I have at the moment.

From the scammer, I didn't hear anything else. They didn't answer my e-mails about the money they owe me, and I'm not inclined to press the issue with them face-to-face.

I leave a big thank you for everyone that chimed in with this situation.

Andrei
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T. Sar
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10 Answers10

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First of all, thank you, personally (1), for stepping up and making the right decision. We need more engineers human beings like you.

I am completely on board with your assessment and current decision to fight the scam. Go ahead.

One kind suggestion: Please ensure you have double backup (backup for the backup) of the required data/information to prove the crime. Here's some suggestions here, here and here that are applicable to your case.

Also, regarding the pending payment: do you not have the work agreement/contract and proof of delivery for the previous work you have done? You can also approach the (appropriate) authorities to get paid for your effort. You've earned it.

Edit:

Since it was not mentioned explicitly, let me be explicit here: Lawyer up. You need to protect yourself at all costs first, to fight the battle.

Thank you once again!!

(1)> Who knows? Maybe I or someone in my immediate family was one of the targets for the scammers.

Community
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Sourav Ghosh
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    Make sure of a backup a long way away & well secured... – Solar Mike Nov 22 '19 at 14:25
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    Give a backup to your lawyer, and another to a friend. – l0b0 Nov 22 '19 at 23:31
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    Just to be clear: backup doesn't mean simply taking a screenshot. Copy the actual email with all the headers. Forward it to some other address. Same for other text-messages services. A screenshot is worth less as evidence and it might not be worth enough if you lose access to the actual messages. – Bakuriu Nov 23 '19 at 10:30
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    [1] Astronomically unlikely, but the sentiment is nice nonetheless – Lightness Races in Orbit Nov 23 '19 at 23:42
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    Use the 3-2-1 rule for backups: Keep 3 copies, store 2 on different media, and keep 1 offsite. Not only do you want to send a copy to your lawyer, you want to make a print copy and keep it some place secure too ("mailing it to your parents/a friend" is probably sufficient). Keep a copy on a thumb drive you carry with you. – Draco18s no longer trusts SE Nov 24 '19 at 01:05
  • Another potential solution is that if there is an agreement (preferably a contract, but I know how things are...) you can use the concerning request as grounds for agreement renegotiation (change in scope of work) and getting your payment for previously delivered services. – Juliana Karasawa Souza Nov 25 '19 at 11:13
  • @LightnessRaceswithMonica This is the Social Contract - I wouldn't like this being done to me, so I won't do it to you :) – rath Nov 25 '19 at 16:40
  • @Draco18s Note that your example is actually probably a 3-3-3 scenario - it's 3 copies, on 3 different media (thumb drive's flash memory, cloud probably or HDD, and paper), in 3 different locations (your body, the cloud or lawyer's office, and your friend's house) – Delioth Nov 25 '19 at 21:57
  • @Delioth The rule is "at least 3 copies" on "at least 2 mediums" with "at least 1 off-site." Off-site prevents issues like "the building burning down" and 2 different mediums (in the same building) prevents things like "an unexpected power surge erased all electronic copies." More is always better. "The cloud" is where the original exists and should not be trusted, so the 3 backups are separate (a different cloud storage is fine, it just *can't be the same email account* as that isn't a backup). – Draco18s no longer trusts SE Nov 25 '19 at 22:30
  • @Draco18s Oh yeah, it's better to have more - I just wanted to point out that your 3-2-1 example isn't strictly a 3-2-1 (it's better than the 3-2-1 because it's a 3-3-3, but it's also more cumbersome for someone looking for "good enough") – Delioth Nov 25 '19 at 22:34
  • @Delioth I was more "here's some ideas" than "do all these things." – Draco18s no longer trusts SE Nov 25 '19 at 22:54
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Find a lawyer

You've made a great ethical decision by choosing not to help your employer perpetrate their scam. I admire that.

But no-one here can tell you the right (and safe) way to continue. We don't know where you are, we aren't familiar with the law in your area, and most importantly we aren't accountable when something we've advised you to do goes wrong.

You need to talk to a lawyer in your local jurisdiction, listen to their advice, and follow the plan that you make together.

Player One
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    Why is a lawyer better than the police, regarding the scamming part? A lawyer might be needed for getting paid for the work done, though. – virolino Nov 22 '19 at 13:17
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    @virolino A lawyer will cost more, but will be guaranteed to be working for the OP's best interests. – Player One Nov 22 '19 at 13:24
  • That was the implied idea from the beginning, yes. But how would the police work "not guaranteed" for the OP's best interests? If you imply corruption (or anything else for that matter), lawyers can be guilty in the same way as anyone else. – virolino Nov 22 '19 at 13:32
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    There are also often (in the countries I've lived in) free law clinics where people can go to get advice when they're unfamiliar with things like the situation described in (for example) this question. – Player One Nov 22 '19 at 13:35
  • @virolino we're down to one Mod now, so let's keep it easy and continue any discussion here – Player One Nov 22 '19 at 13:41
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    @virolino It's not that the police and supporting organizations (such as a distict attorney) might not desire to work for the OP's best interests, but unlike the relationship with an attorney the police a) have no specific regulatory obligation to work in any particular person's best interests, as an attorney generally does with a client, and b) are free to push you well down or even off their priority list when something else comes up, and they have many, many other obligations that they would likely consider higher priority for both ethical and political reasons. – cjs Nov 22 '19 at 21:37
  • Just curious : are lawyers really accountable if something goes wrong? Can't they just dismiss it as "better luck next time?" – Eric Duminil Nov 23 '19 at 09:13
  • @EricDuminil I'm not sure how accountable the lawyers in the OP's jurisdiction would be if something goes wrong. My point was the the OP would be accountable if they do something that goes wrong, so they should get a local professional law expert in their corner, rather than internet strangers. – Player One Nov 28 '19 at 12:15
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Is this an adequate way of dealing with this situation?

No it isn't. None of these include you getting paid for work already done.

I would call his bluff, send him a bill for everything owing and ignore anything that isn't a payment.

Short blunt note with it so he knows you're not interested in licking any lollipops. "You currently owe me X dozen hours, please organise payment immediately, invoice attached. Regards Me"

As a freelancer you do not give any leeway to threats of non payment. It's the only reason you work. Don't get into a shady dialogue or anything else, just ignore anything that doesn't include payment.

As far as going to the authorities or clients, that's always going to be an unknown with unpredictable results. Once you start venturing into shady areas anything can happen up to broken legs or worse if it means jail time for someone. And doing that to a client isn't good for your rep however unfair that sounds. There's always a taint attached.

Kilisi
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    Thank you for your candid response. You're offering another point a view that, while I may not necessarily agree yet, gives good food for thought. I'll give this some hard thinking. – T. Sar Nov 22 '19 at 13:11
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    Good, think hard, this might be a bluff just to stop you asking for your money and no intention of scamming in the way you think and your evidence is made out of dust so trying to use it will just discredit you. Never take things like this at face value without looking at the angles. My solution just cuts through straight to pushing for your money already earnt, other crap is always secondary to me. I get the money first, deal with other stuff later, until then no wiggle room. – Kilisi Nov 22 '19 at 13:37
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    The intention of scamming is pretty clear, however. It is very explicit on their language, with a defined date to declare bankruptcy and all that. I was asked to implement the system and it is beyond reasonable doubt that this is anything but a scam. Still, your point is very good, and I'll be discussing it with a trusted person. – T. Sar Nov 22 '19 at 15:39
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    +1 I like this answer. If you haven't invoiced him yet, do it and call his bluff. When the invoice reaches past the net30, then get a lawyer involved, but I'd also tip the authorities with paper trail and everything after. If you do it too soon, he could go to jail, his business closed, and you'd be left with no payment. I'd tread carefully. – Mike Nov 22 '19 at 16:45
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    I think this is a reasonable strategy, but not without risks. Your client may consider your disregard of new instructions as a kind of implied legal threat, depending on whether they think you are a do-gooder or not. If the client eventually succeeds in the scam and a victim manages to unravel the plot, you may be exposed to claims of negligence for failure to report to authorities. A lawyer is really the best option. – Lawnmower Man Nov 22 '19 at 21:13
  • IANAL, but yes, I am deadly serious: https://criminal.findlaw.com/criminal-charges/failure-to-report-a-crime.html – Lawnmower Man Nov 22 '19 at 21:16
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    @LawnmowerMan bunch of answers talking lawyers already, maybe upvote them all and downvote mine. I'm not going to advise such a course. – Kilisi Nov 22 '19 at 21:21
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    As an addendum to this, absolutely do not threaten to go to the police, that is blackmail and is illegal. Either go to the police or don't, but don't threaten. – rtpax Nov 23 '19 at 01:25
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    Zero chance any invoice is paid by a self-confessed scammer that has already defined a date for bankruptcy. – Laconic Droid Nov 23 '19 at 01:28
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    @LaconicDroid rubbish, I have been paid by people AFTER they declared bankruptcy, still have clients right now who are notorious for non payment and other issues. They just don't mess with me, because I don't let them negotiate or anything else. It's very rare that I haven't been paid at all and that chap regrets it. A major skill as a freelancer is making sure you get your $$ – Kilisi Nov 23 '19 at 02:11
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    @Kilisi Doubly confirmed. A major skill is avoiding being scammed by clients who are shady. – Rui F Ribeiro Nov 23 '19 at 12:32
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    @rtpax Threatening to go to the police about the scam he's trying to set up if he doesn't pay you is indeed blackmail in most jurisdictions. Agreeing not to go to the police may also be illegal under mandatory reporting laws, depending on jurisdiction. However, threatening legal action to recover the money he owes you shouldn't be illegal in almost any jurisdiction. Of course, it's still something you probably don't want to do without talking to a lawyer first. – reirab Nov 23 '19 at 21:12
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    This is a good answer because it points out a reality of doing business with people who are willing to break the law: they also don't mind breaking other laws, like assault and battery. OP should tread carefully - it's possible to be in the right, legally speaking, but with two broken legs and eating through a straw :( – Aaron F Nov 25 '19 at 09:49
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Warn up the authorities about the scam. While they didn't start scamming no-one yet, I have the paper trail that shows up the intention to do it and the step-by-step of the scamming process.

This is the way to go, even if it will make your life uncomfortable for a while. As a consequence, the other two will happen also.

The police will probably want to let the scam process advance up to the point where your employer cannot deny it - to catch him in flagrante delicto. Be prepared for it.

Ask the police to give you some (written, signed) proof that you go along with the scam on the side of the police - just to avoid potential problems, being accused of being an accomplice to the scam.

Ask the authorities all the questions you have, regarding on how to proceed, both with the scam, and with getting your payment.

Since nobody is perfect, police is not perfect either. As it was made clear in the comments, you might want to also have a lawyer on your side, to avoid unneeded pressure / abuse from the police.

virolino
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    Absolutely get everything in writing as suggested here! – DrMrstheMonarch Nov 22 '19 at 12:02
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    I wasn't aware that the police asking me to work with them was a possibility. Thanks for pointing that out! – T. Sar Nov 22 '19 at 12:03
  • So you are not really a movie watcher? :) I mean, police / detective movies (comedies or otherwise). – virolino Nov 22 '19 at 12:04
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    @virolino do you have real life examples of police acting the way you describe as "probably"? Or behaving the same way in real life the same way that actors portray them in comedies? – Player One Nov 22 '19 at 12:48
  • @PlayerOne: I do not have personal experience in aiding the police organizing "in flagrante delicto". I am also aware that reality and movies "do not always match". But I have experience when the police investigated simpler situations, where discussions were enough, besides some pictures taken as proof. – virolino Nov 22 '19 at 13:12
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    As another twist, I have anecdotal evidence of the police threatening to charge the person who came to them (with illegal drugs accidentally shipped to them) unless they worked with the police (obviously dangerous for the innocent guy). A lawyer intermediary would have prevented that. – Spehro Pefhany Nov 24 '19 at 14:52
  • @PlayerOne A conviction for carrying out the scam may be a bigger prize than a conviction for planning it. – Anton Sherwood Nov 25 '19 at 01:59
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    @SpehroPefhany: your logic actually makes sense, and sounds plausible. However, I also have some (limited) with lawyers, and they are equally not trustworthy - they have their own specific ways to fail on you. +1 – virolino Nov 25 '19 at 05:43
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    I'm not familiar with the exact situation in Brazil, but even in Europe or USA, people who know their shit generally advise against talking to the police without a lawyer if there's the slightest chance that you might end up on the suspect side. The police is not your friend if you are even a potential suspect. – Tom Nov 25 '19 at 09:00
  • @Tom: As I already admitted, I did not have this POV in mind initially. +1 – virolino Nov 25 '19 at 09:13
  • @Tom and just to be clear - nobody can know if they will be seen as a potential suspect or not (even if they're squeaky clean); the police are not obligated to know the law inside out and can/do make mistakes. A lawyer makes sure you are doing everything you need to help, without risking your freedom. –  Nov 25 '19 at 15:47
  • @PlayerOne, Comedies isn't the only source for such assumption. Wikipedia has an article on Sting operation too. – Igor G Dec 04 '19 at 13:55
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he already made it clear that he'll refuse to pay me anything if I don't help him out to conduct this scam.

I think he might be trying to embark you on a wonderfully escalating trip:

Hey, do X for me, or I won't pay you my debt.
Now, do Y for me, or I'll tell everyone you did X (even though it'd harm me too; but don't worry, I'll find my way out, thank you very much).
Now, do Z alone, or I'll tell them you did Y.
... and so on

So it follows that:
1. Taking even the first step down that path could mean you're hooked for good.
2. That path wouldn't give you any power over him, so it won't help you get that pay.
3. In fact, it's him who'd get more power over you.
4. Contributing to his illegal activities could mean you'll never be willing to reach for legal protection, should you need it. (And it certainly looks like you already need it)

it is a rather large amount of money that I feel bad for just giving up.

Don't feel bad about it! Going along with his plan will see you loosing much more.

And thank you for your plan to take counter measures and make this world safer! Just take care!

Igor G
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...asked me to do something highly illegal ...

<p>...he already made it clear that he'll refuse to pay me anything if I don't help him out to conduct this scam..</p>

Conclusion: he is a criminal. You have little or no reason to beleive him. He probably does not intend to pay you anyway (and his scammer reflexes will trigger even if he intends to pay in the first place, and doing the crime intended is probably the only way for him to get the money needed to pay you).

So chalk these money/labour as already lost, read here and do whatever your personal moral dictates.

fraxinus
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    ... and if the illegal work is done, he might even use it to blackmail the OP. – Val Nov 24 '19 at 10:12
  • good point. Working with a criminal can be bad in many ways... even if you are a better (and luckier) criminal. – fraxinus Nov 25 '19 at 10:25
  • The only thing worse than working with a criminal is working with a profoundly stupid person. – fraxinus Nov 25 '19 at 10:25
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Not to pay is a bluff, because you would report him.

The work turns out to be illegal, so you want to quit.
He owes you money for work already done.
He says that he will not pay that if you quit.
You have documentation of his illegal behaviour.

So he makes a threat to not pay the money.

There is a potential threat that you could make, reporting his behaviour somewhere. This is stronger than his threat.

The threat you could make is so obvious that you do not actually make it, it is implicit in the situation.

I think the threat not to pay is only a bluff, with the purpose to make you feel insecure about it. That actually worked.

The situation could be different if he would not know you have documentation, or that you have enough of it. He may have been just not aware of the facts when he made the threat.
So maybe you need to make him aware of the situation.

Your side does not even have to be a threat: It is a reaction. It is the obvious reaction he can expect, just from the situation.

Independent of all this is the question of what to about his criminal behaviour. This is a question of ethics, not about him.

To find what to do, you wrote good proposals yourself, and other answers contain more ideas.

Find what should ideally be done. Then choose some of them, as long as it does not hurt yourself.

I think it is important to avoid doing more of it than is comfortable, not even a little, because it erodes your motivation to do the right thing later.

Volker Siegel
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While you already have some good answers and I absolutely agree with the advice to talk to a lawyer, I think you have two separate issues that you need to handle independently.

One is

[...] he owes me money for dozens of hours I poured on one of the features for his software

and the other is that he wants you to

[...] help him out to conduct this scam.

These issues seem connected, as your client is blackmailing you into the scam by withholding the payment but if you want to stay on the right side of the law you should probably address them separately.

Getting your money

I assume that you have a paper trail for the work that you did. I hope that you didn't go off and spent dozens of hours based on something unprovable like a phone call alone.

I am not familiar with the Brazilian legal system but most countries have various forms of legally binding contracts, besides a piece of paper with two signatures on it. So if you have some way of proving there has been an agreement and that you've upheld your end of it, then you should be able to claim payment for the work done, regardless of the current situation.

Make sure you stick to the rules (e.g. where I am from you are required to send a certain number of reminder letters in a given timeframe and be able to prove that you sent them, before you can take legal action) and claim that money the appropriate way. Again, I'm not familiar with the local situation, probably you have several options such as a debt collection agency or small claims court -- your lawyer may be able to advise you on that. Usually such an initial conversation is free, or you can make your client pay the costs you have to make.

Getting out of the scam

Regardless of receiving payment or not, you have to make a choice what you do about the new work you've been requested to do. As others have also advised, I'd be tempted to contact the police, again possibly after speaking to a lawyer first. If they ask you to collaborate with them to catch the guy, you can consider that; if they decide not to pursue it because they "have more important things to do", just thank the client for their offer but say you do not wish to accept the project and leave it at that.

CompuChip
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I'm not sure if you're in the U.S.. I would skip the police and go straight to the FBI about this. If your client wants to steal several thousand dollars from one customer, they may be multiplying that with several. The FBI, or similar justice organization where you are, can authorize you to proceed with immunity, the police cannot.

Brian D
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I had such an experience and I know that kind of guys. Most efficient scenario would be like this;

  • Stay away from lawyers as long as you can, until you have safety concerns. It doesn't worth the money, trust me.
  • Act nice to your client, warn him about the consequences of scamming, tell him you will do the job, but you need the full payment of your previous hours to begin to this kind of stuff, give him full trust.
  • If he agrees, you get your payment and tell 'I changed my mind and we are even now'. Never pick up calls again.
  • If he doesn't agree, be cool with that and keep your ground. He will, eventually.
  • Under any condition you should not do the job. He will not pay you if you do it.
  • Keep all the evidence with triple back-up.
  • Never tell about reporting him until you have already reported and have a lawyer.

Edit : You may think scamming the criminal is wrong, I will explain with an example; A thief pointed a gun at you and made you promise him that you will go to your bank and deposit all your cash and bring that to him. Would you do that? You just promise and scam the criminal, right? Ethics are not intended to support criminals, it's for regular people, not a guy that forcing you into crime and threatens not paying you what he owes you.

peynir
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    Just to point out - you're essentially advising OP to commit a scam (steps 2 and 3 of your answer: full payment upfront and then don't do it). Of course the client has very questionable morals, doesn't mean they are to be scammed back... – Juliana Karasawa Souza Nov 25 '19 at 11:06
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    @JulianaKarasawaSouza That's not what the answer says; it says to get full payment for the previous work that's already done on promise of then doing the new, illegal work; and then after being paid refusing to actually accept the new work. It's not very ethical, but it's also not a scam. – marcelm Nov 26 '19 at 12:01