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Asset Search Blog

Investigating & Recovering Hidden Money & Other Assets

Recovering Assets By Identifying & Immobilizing Them

Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Financial Institutions, Money Laundering

Identifying and immobilizing assets in a timely fashion can be paramount to asset recovery cases ranging from an ultra- high net worth divorce to a forced collection proceeding against a debtor.

The abstract about “Suspending Suspicious Transactions” ¹ similarly mentions the “timely identification and immobilization” of  assets.  The abstract discusses this with regard to money laundering and terrorist financing:

“Seizure and confiscation of proceeds of crime, and funds intended to finance terrorism, are key objectives of the global initiative to combat money laundering and terrorism financing. The timely identification and immobilization of such funds are critical to permit the action necessary to prevent the flight of illicit assets beyond the reach of national law enforcement and prosecutorial authorities.”

Suspending Suspicious Transactions was published during July 2013 by the World Bank.  It examines the role Financial Intelligence Units, (“FIUs”), can have in freezing assets and/or postponing financial transactions at banks.

Suspending Suspicious Transactions also supplies fact patterns showing how FIUs work under anti-money laundering/countering financing of  terrorism, (“AML/CFT”), laws.  One of these fact patterns at pp.76-77, zeroes in on the way determined criminals utilized nominees, a sham loan and the purchase of  real property  to conceal assets in a money laundering scheme:

Page 76-77: Stroligo, Klaudijo, Horst Intscher, and Susan Davis-Crockwell. 2013. Suspending Suspicious Transactions. World Bank Study. Washington, DC: World Bank. doi:10.1596/978-0-8213-9917-0 License: Creative Commons Attribution CC BY 3.0

Page 76-77: Stroligo, Klaudijo, Horst Intscher, and Susan Davis-Crockwell. 2013. Suspending Suspicious Transactions. World Bank Study. Washington, DC: World Bank. doi:10.1596/978-0-8213-9917-0 License: Creative Commons Attribution CC BY 3.0

¹ Stroligo, Klaudijo, Horst Intscher, and Susan Davis-Crockwell. 2013. Suspending Suspicious Transactions. World Bank Study. Washington, DC: World Bank. doi:10.1596/978-0-8213-9917-0 License: Creative Commons Attribution CC BY 3.0

Copyright 2014 Fred L. Abrams

Divorce & Hidden Money: Four Methods Spouses Sometimes Use To Conceal Assets

Posted in Divorce & Child Support, Divorce & Hidden Money, Financial Institutions, Hidden Money, Money Laundering, Swiss Banks, Tax Fraud

This is the eighth post in the “Divorce & Hidden Money” series.  Like “Four Asset Concealment Tools” and “Four Ways Assets Can Be Secretly Transferred”, the post reveals methods a spouse may use to hide marital assets and keep more than his/her fair share of the marital estate.

Credit/Debit Cards- Using a credit or debit card which draws from a secret foreign bank account is one way divorcing spouses can secrete and/or launder assets.  This method is so common that the IRS established its Offshore Credit Card Program to detect tax cheats maintaining undeclared foreign accounts.

A ‘Zebra’ Strategy (a.k.a Commingling)- A divorcing spouse may conceal marital assets by commingling them with business or other assets.  This ‘zebra’ strategy of mixing assets, is mentioned by the article Cayman Bank Records Seized.   The article discusses Germany’s recent seizure of records and says that some Coutts Trust Company customers “followed a ‘zebra’ strategy of mixing legally declared and taxed accounts containing smaller amounts with undeclared accounts containing larger sums.”

Asset Protection Services- One promotor of these services is Capital Asset, Inc.  Its website claims that forming companies in Nevada, or Wyoming, or Delaware is preferable because: “Do you know that partnerships, corporations, LLCs in most states make you completely visible? If a judge can see your assets, he can seize them.”  Divorcing spouses may hire a promotor of asset protection services to establish such companies which can then be used to open bank accounts or maintain assets with anonymity.

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Carmelite Chambers International Fraud & Asset Recovery Conference

Posted in Asset Search/Fraud Investigation, Financial Institutions, Hidden Money, Money Laundering, Securities Fraud, Tax Fraud

I will present my program “The Ins & Outs Of Recovering Assets Via Whistleblowers & Other Tipsters” in London at 11:40 AM June 23, 2014, during the Carmelite Chambers International Fraud & Asset Recovery Conference.   “The Ins & Outs Of Recovering Assets Via Whistleblowers & Other Tipsters” highlights how whistleblowers sniff out vast sums of money hidden through laundering and other asset concealment schemes.  I open the program by discussing the fact pattern of a divorcing husband hiding tens of millions of dollars from his wife and domestic tax authorities, by using shell companies, multiple jurisdictions, etc.

The program features Washington, DC attorney Jack Blum who will talk about the IRS Whistleblower Program.  Mr. Blum has been an expert witness for the U.S. Department of Justice and the Internal Revenue Service.  Mr. Blum additionally served as associate counsel, or assistant counsel, or special counsel to three U.S. Senate committees or subcommittees; and been quoted by or mentioned in thousands of newspaper and magazine articles around the world.

Since he resigned at the end of 2008, as “Of Counsel” to Baker & Hostetler’s Washington, DC office, Mr. Blum practices part-time for a select group of clients.  Just one of Mr. Blum’s clients is whistleblower Rudolf Elmer.  As described by “Swiss Banker Blows Whistle on Tax Evasion”, Mr. Elmer provided tips to the IRS, a U.S. Senate subcommittee and the Manhattan District Attorney’s Office, about suspected tax cheats with offshore bank accounts.  At a January 17, 2011 Frontline Club Press Conference, Mr. Elmer also supplied WikiLeaks with this same kind of information.  Mr. Elmer’s whistleblowing led to his criminal prosecution by Swiss authorities, on charges that he violated Swiss bank secrecy law.

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Bitcoin & Other Virtual Currency As A Money Laundering Threat

Posted in Asset Search/Fraud Investigation, Financial Institutions, Hidden Money, Money Laundering

The search for the true identity of Bitcoin creator Mr. Satoshi Nakamoto is discussed by “Will the Real Satoshi Nakamoto Please Stand Up” and at a video:

Mt. Gox which was once the world’s largest Bitcoin currency exchange, is also in the news.  It made bankruptcy filings in Japan and the U.S. and reportedly lost virtual currency valued at $473 million.

Perhaps most important, is that Bitcoin and other virtual currency can be a major money laundering threat.  This is true because with anonymity, determined criminals may exchange their illicit monies for virtual currency.   As a USA Today editorial explains “drug dealers, tax cheats, money launderers and terrorists do have uses for such a currency. Bitcoin gives them a way to try to hide money or move it to places undetected.”

Moreover, a criminal’s hidden money would presumably be even harder to detect if that criminal used virtual currency like Bitcoin along with the kind of virtual office and internet bank mentioned at Wyomingcorporations.us. Continue Reading

Divorce & Hidden Money: Whistleblowing, Tax Fraud & Tipping The IRS

Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Divorce & Hidden Money, Hidden Money, Money Laundering, Tax Fraud, White-Collar Crime Generally

The post “An Asset Search, Tax Fraud & Divorce” was first published at the Asset Search Blog on January 16, 2008.  It is republished below as the seventh post in the “Divorce & Hidden Money” series.  The post describes my investigation of a divorcing husband.  While I was the divorcing wife’s attorney, I discovered the husband had hidden money offshore in anticipation of the divorce.  I also suspected the husband concealed this money from the IRS in furtherance of a tax fraud.

If evidence of tax fraud is brought to the attention of a judge presiding over a divorce, the judge may report the fraud to the IRS.  When the divorcing husband admitted in his affidavit that he had not paid taxes, the judge in Hashimoto v. De La Rosa, 2004 slip op. 51081(Sup. Ct. N.Y. County, June 23, 2004) reported him to the I.R.S.  In Beth M. v. Joseph M., 2006 slip op. 51490 (Sup. Ct. Nassau County, July 25, 2006), the judge similarly reported a husband who testified during court proceedings that he had not filed tax returns for the years 1997 through 2001 and other times.

Some divorcing spouses meanwhile, directly tip the IRS about their spouse’s tax fraud.  The spouses supplying these tips may be eligible for a reward as participants in the IRS Whistleblower program.  It typically takes six or more years for an IRS whistleblower to collect any reward and a whistleblower can face many challenges.  More information about blowing the whistle is at the Reuters article Record $104 million reward boosts whistleblowing on tax cheats, which cites me; and the New York Times article The Price Whistle-Blowers Pay For Secrets. Continue Reading

Divorce & Hidden Money: Four Asset Concealment Tools

Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Divorce & Hidden Money, Financial Institutions, Hidden Money, Money Laundering, Swiss Banks

This is the sixth post in the “Divorce & Hidden Money” series.

Four Ways Assets Can Be Secretly Transferred” mentioned methods some use to move assets across international borders.  My post regarding the 2011 divorce between Helga and Gaston Glock discussed additional asset concealment tools.  Any one or a combination of these additional tools can be used to hide marital assets:

Multiple Jurisdictions-  To obscure the true beneficial ownership of funds or other things of value, a divorcing spouse may transfer assets through multiple jurisdictions.  If multiple jurisdictions are employed to hide marital assets during a divorce, efforts to valuate the marital estate can be hampered.

 

Foreign Bank Accounts-  A divorcing spouse may park assets in bank accounts located in Luxembourg, Liechtenstein, Switzerland, etc., which are jurisdictions with especially strong bank secrecy laws.  As a chart from a Financial Intelligence Unit based in Canada partly demonstrates, foreign bank accounts can too be used as the laundering links of a money laundering circuit.

 

Dummy Corporations / Shell Companies -  These business entities are easily formed in Nevada, Wyoming, Delaware and other places where there are few reporting requirements about an entity’s shareholders, managers, etc.  The dummy corporations and / or shell companies can be utilized to open nontransparent bank accounts; and funds can then be deposited with anonymity into these accounts.

 

Trusts - a divorcing spouse may fraudulently transfer marital assets to a trust.  Depending on the circumstances, there can be different legal remedies available when this occurs.  The remedies may involve using pretrial discovery and seeking a court order to set aside the fraudulent transfer of marital assets to a trust.

 

 

First Image courtesy of Flickr (Licensed) by Norman B. Leventhal Map Center at the BPL.
Second Image courtesy of Flickr (Licensed) by Tax Credits.
Third Image courtesy of Flickr (Licensed) by Andrew Malone.
Fourth Image courtesy of Flickr (Licensed) by Ewen Roberts.

Copyright 2014 Fred L. Abrams

Divorce & Hidden Money: Helga Glock Claims Gaston Glock Started Concealing His Assets

Posted in Divorce & Child Support, Divorce & Hidden Money, Financial Institutions, Hidden Money, Swiss Banks

This is the fourth post in the “Divorce & Hidden Money” series.

Mr. Gaston Glock’s creation of the ubiquitous Glock pistol turned him into a billionaire and he is thought to be one of the twenty wealthiest individuals in all of Austria.  Mr. Glock’s ex-wife Ms. Helga Glock meanwhile, suspected he is concealing marital assets which could be connected to the couple’s 2011 Austrian divorce.

Ms. Glock therefore used civil law tools in an attempt to detect any marital assets / alleged hidden monies Mr. Glock supposedly possessed.  The civil law tools Ms. Glock employed included: 1) her Swiss petition to freeze a UBS bank account reportedly maintained by Mr. Glock in Switzerland; and 2) the March 18, 2013 request for judicial assistance filed at In re application of: H.M.G., U.S. District Court for the Northern District of Georgia, Index No. 13-cv-02598.

MS. GLOCK’S MARCH 18th REQUEST FOR JUDICIAL ASSISTANCE

Ms. Glock’s March 7, 2013 affidavit filed at her request for judicial assistance, claimed Mr. Glock had earlier started hiding and moving personal and corporate assets in anticipation of the couple’s divorce.  The March 7th affidavit discussed Ms. Glock’s belief that Mr. Glock was trying to transfer assets out of her reach; and that there had allegedly been a steady flow of assets out of Austria.

According to the affidavit, there were financial transfers to the above-mentioned UBS Swiss bank account and to bank accounts in Liechtenstein or Luxembourg.  Also according to the affidavit, Mr. Glock had a Bermuda trust formed so that it could receive $51 million from “Glock”.  The affidavit additionally referred to the “worldwide Glock Group structure” and indicated the structure was thought to be partially depicted by this chart:

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Red Flags In The Case Of Fraudster Elaine White

Posted in Asset Search/Fraud Investigation, Bank Search, Divorce & Child Support, Financial Institutions, Hidden Money, Money Laundering, White-Collar Crime Generally

From about 2006-2012, Canadian Elaine White offered an asset tracking service to her clients who were divorcing spouses, Ponzi scheme victims and others who were searching for hidden money.  Ms. White apparently told her clients that she could detect offshore bank accounts which contained the hidden money they were looking for.  Ms. White then supplied her clients with purported bank account information from the offshore banks.

As described at “A Suspected Fraudulent Asset Recovery Business,” Ms. White is the subject of a criminal prosecution in Virginia because of her asset tracking business.  On October 7, 2013 the Court accepted Ms. White’s guilty plea to Count Two of her April 10, 2013 indictment (i.e. conspiracy to commit money laundering).

The Statement of Facts at her plea agreement showed that instead of providing genuine information to her clients, Ms. White supplied “false and fraudulent data and fabricated bank records…”  Ms. White’s asset tracking raised at least two red flags.

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Divorce & Hidden Money: Four Ways Assets Can Be Secretly Transfered

Posted in Divorce & Child Support, Divorce & Hidden Money, Drug-Related Assets, Financial Institutions, Hidden Money, Money Laundering, Swiss Banks

This is the third post in the “Divorce & Hidden Money” series:

One divorcing wife explained to me that she believed her husband had hidden money in offshore bank accounts.  This divorcing wife found a box her husband inadvertently left  in the basement after he moved out of their marital residence.  The box had an account opening application from one offshore bank and brochures from others.

Another divorcing wife found some correspondence at the family’s summer home.  The correspondence  was between her husband and the foreign attorney who helped establish the husband’s secret offshore bank accounts.  A different divorcing wife found a scrap of paper on which her husband had scrawled the name of a Swiss banker and a Swiss financial account number.

The above-described matters raised the same question, how could these husbands secretly transfer funds across international borders into offshore bank accounts?  Like narco-traffickers, tax evaders, terrorist financiers and others, divorcing spouses may use the following methods to secretly transfer assets:

Bulk Cash Smuggling- Determined criminals routinely smuggle cash through porous borders.  Illicit cash couriers for instance, travel through Mexico-U.S. border crossings on behalf of  Mexican drug cartels.  German tax cheats are also known to smuggle undeclared cash into Liechtenstein by stashing the cash in luggage and then driving with it across the German-Liechtenstein border.

Portable Valuable Commodities Like Diamonds & Jewelry- After his arrest, Bernard Madoff seemingly tried to transfer watches, cufflinks and other jewelry worth more than $1 million.  Madoff attempted to mail these items to friends and relatives.  Bradley Birkenfeld the whistleblower, is believed to have similarly smuggled diamonds in a tube of toothpaste while on a jet flying across U.S.-Swiss borders.

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