Asset Search Blog | Hidden Assets Lawyer | Financial Intelligence Attorney Fred Abrams

Using Pretrial Discovery In Cases With Foreign Trusts

By Fred Abrams on January 30th, 2012 Posted in Asset Search/Fraud Investigation, Bankruptcy, Divorce & Child Support

It is no surprise that foreign trusts can easily be used as elements to fraudulently protect or conceal beneficially owned assets. In some jurisdictions a trust may however, be considered void if the trust was “self-settled” (i.e. the grantor and beneficiary were found to be one and the same). Trust veils might also be pierced on the ground that they are fraudulent conveyances, as explained by the May 23, 2011 “Asset Search News Roundup”.

To analyze whether a trust is actually fraudulent, litigants ranging from bankruptcy trustees to divorcing spouses try gathering relevant evidence through pretrial discovery devices. If a foreign trust has a U.S. owner for example, discovery devices could conceivably be used to elicit copies of the “Annual Information Return of Foreign Trust with A U.S. Owner”, Form 3520-A, that may have been supplied to the IRS Service Center, in Ogden, Utah.

Below are some discovery devices filed by the Chapter 7 trustee in the Michael Mastro bankruptcy case in Seattle, Washington. In Mr. Mastro’s case, one of three trusts at issue, (i.e. the LCY Trust), was replete with foreign elements. Mr. Mastro formed LCY Trust under Belizian law and it even had a Belizian trustee, called “Compass Trust Corporation.”

(To Access The Discovery Devices, Click On The Image)

Asset Search News Roundup: January 22, 2012

By Fred Abrams on January 22nd, 2012 Posted in Asset Search News, Financial Institutions, Money Laundering

A principal of PokerStars pleads guilty and Nigerian advance fee frauds:

♦ The May 9, 2011 Asset Search News Roundup and Secreting Money Via Internet Gambling On The Isle Of Man, discussed criminal prosecutions against the principals of three internet gambling businesses. One of the principals, Ira Rubin of PokerStars, just entered a guilty plea to counts 1, 8 & 9 of his superseding indictment.

These counts accused Mr. Rubin of violating: 31 U.S.C. § 5363 & 18 U.S.C. § 371 (illegal gambling conspiracy); 18 U.S.C. §§ 1343, 1344 & 1349 (conspiracy to commit bank and wire fraud); and 18 U.S.C. § 1956 (h) (money laundering conspiracy). Page 20 of Mr. Rubin’s indictment specifically claimed he was employed to process “…internet gambling transactions disguised as legitimate online merchant transactions, in order to trick U.S. banks into processing the transaction.” Mr. Rubin’s docket report reveals he will next be sentenced on May 17, 2012.

♦ Authorities like Belgium’s CTIF-CFI, have long warned of Nigerian advance fee frauds, (i.e. “419 Scams”). In the U.S., FinCEN considered these frauds at its October 2001 SAR Activity Review. A 1997 publication from the U.S. Bureau of International Narcotics and Law Enforcement Affairs, also analyzed advance fee frauds. Determined criminals now facilitating them, typically send their intended victims “softening up” e-mails.

The e-mails promise to pay out inheritances, lottery winnings or other funds. In their attempt to collect this phony inheritance, winnings, etc., the victims always end up advancing / losing some of their own money to the criminals. One variation of the fraud starts out with an e-mail promising to pay for help transferring monies from a supposed Holocaust claim fund. A January 18th e-mail thought to be part of this kind of fraud, is available here.

Revisiting A Lawsuit Against Two Private Investigators

By Fred Abrams on January 15th, 2012 Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Financial Institutions, Privacy Laws

Lawsuit Claims PI’s Could Have Illegally Accessed Bank Info, explained that plaintiff Victoria Florea had filed two lawsuits against private investigators Nicole Bocra and Terry L. Gilbeau, president of Checkmate Investigative Services, Inc. The first of these lawsuits was voluntarily discontinued by plaintiff Florea and her lawsuit filed October 17, 2011, then took its place.

The lawsuits apparently claimed that investigators Bocra and Gilbeau were researching whether Francis Driscoll during his divorce with plaintiff Florea, could have hidden assets at banks in Puerto Rico. According to allegations in one or more of the lawsuits, these investigators might have illegally conspired to access supposed bank customer information at Banco Popular of Puerto Rico, Western Bank and elsewhere.

One of the lawsuits indicated, for instance, that the alleged conspiracy could have involved the acquisition of this supposed Banco Popular bank account opening document:

(Click On The Document To Read It)*

Asset Search News Roundup: January 8, 2012

By Fred Abrams on January 8th, 2012 Posted in Asset Search News, Divorce & Child Support, Financial Institutions, Money Laundering, Tax Fraud

The Financial Action Task Force’s frequently asked questions webpage, states “Large-scale money laundering schemes invariably contain cross-border elements.” Large-scale money launderers are not the only ones who hide assets by utilizing cross-border or offshore elements. Divorcing spouses, judgment debtors and anyone else, may conceal valuable assets by combining offshore elements with additional ones.

These elements are sometimes financial accounts opened anonymously, in the name of shell companies. As suggested by “If A Judge Can See Your Assets, He Can Seize Them”, financial accounts and shell companies can be put to work to disguise the beneficial ownership of assets. Over the summer, Senator Carl Levin (MI) sponsored two bills which try to address this abuse. These two bills are the subject of today’s “Asset Search News Roundup”:

The Stop Tax Haven Abuse Act (S. 1346), was introduced in the U.S. Senate on July 12, 2011 and it is discussed here. This bill could help the IRS identify the beneficial owners of offshore financial accounts. The bill would also compel persons in the business of forming shell companies, to follow anti-money laundering rules. Under these rules, the owners of shell companies would presumably be identified.
The Incorporation Transparency and Law Enforcement Assistance Act (S.1483), similarly requires beneficial owners of shell companies and other business entities, to be identified. Senator Levin introduced S.1483 in the Senate on August 2, 2011. Its predecessor, (S.569), was introduced on March 11, 2009, as shown by the “June 10, 2010 Asset Search News Roundup.”

An Asset Search Via Whistleblowers & Other Tipsters

By Fred Abrams on January 1st, 2012 Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Money Laundering, Securities Fraud, Tax Fraud

“Human Intelligence & The SEC’s Whistleblower Program” examines the government’s handling of tips in its search for assets concealed by securities fraudsters. The IRS Whistleblower Program too seeks tips from informants who help the IRS detect assets concealed in tax frauds.

Besides these whistleblower programs, tips can often be generated in a variety of ways. “Warsaw Prosecutors Eye Possible Money Laundering At 50 Platowcowa Street” highlights a tip supplied through an anonymous letter. This tip letter caused Polish prosecutors to launch a money laundering investigation and search for funds connected to a suspected shell company in Delaware.

“An Asset Search, Tax Fraud & Divorce” meanwhile, describes how a prospective tipster was interviewed by Brian, an ex-IRS special agent and former high-ranking official at FinCEN. Brian conducted this interview to locate marital assets believed to have been hidden by a divorcing husband suspected of tax fraud.

Asset Search News Roundup: December 26, 2011

By Fred Abrams on December 26th, 2011 Posted in Asset Search News, Holocaust-Era Assets

More than 20% of Europe’s art could have been looted by the Nazis during the Holocaust and in countless cases, the looted art was ultimately transferred to museums and private collections. When analyzing these transfers, one may detect the use of multiple jurisdictions, forgeries or other common concealment methods. Given the foregoing, this “Asset Search News Roundup” scrutinizes the transfer of art at the time of the Holocaust-era:

“Nazi Loot Claim Fails to Hinder Planned Cologne Kandinsky Sale” reports on the auction of Zwei Schwarze Flecken (Two Black Marks), at Kunsthaus Lempertz of Cologne, Germany. Kunthaus Lempertz considers Zwei Schwarze Flecken to have clear title, despite the existence of a Holocaust-era art restitution claim.
The article “A detective’s work at the MFA“, discusses Oskar Kokoschka’s Two Nudes (Lovers), which Boston’s Museum of Fine Arts says was lawfully transferred during the Holocaust. This article cites Raymond Dowd, Esq., who litigated Bakalar v. Vavra, Index No. 05-CV-3037 (S.D.N.Y.), the first Holocaust-era art case ever to be tried in federal court. Mr. Dowd basically asserts that the museum’s provenance research of Two Nudes lacks transparency and is defective. Mr. Dowd’s blog article about Two Nudes is available here.
“Mr. Curt Valentin’s Nazi-Looted Art“, comments on the Holocaust-era sale of art to New York’s MoMA. It explained that the Nazis issued a November 14, 1936 letter authorizing art dealer Curt Valentin to transfer art from Germany to America. Valentin sold this art to MoMA, including: Derain’s “Valley of the Lot at Vers“; Kirchner’s “Street Scene“; Klee’s “Around the Fish“; and Matisse’s “Blue Window“. The November 14, 1936 letter and Valentin’s transfer of art during the Holocaust, are too mentioned by the recent ARTnews post, “MoMA’s Problematic Provenances“.

Collecting Evidence In An Offshore Asset Search

By Fred Abrams on December 20th, 2011 Posted in Asset Search/Fraud Investigation, Bankruptcy, Divorce & Child Support, Swiss Banks

The pretrial discovery phase of a divorce, bankruptcy or other legal matter is often the best chance one has to collect evidence of any assets hidden offshore. The attached letter rogatory* submitted to the Swiss court, was included in one divorcing wife’s pretrial effort to gather such evidence.

At the time of pretrial discovery in her New York divorce, this wife used the letter rogatory to try to compel a Swiss bank to disclose info about her husband’s secret financial account. In the Chapter 7 bankruptcy of Michael Mastro, discovery devices were likewise employed to collect evidence or leads about assets thought to be offshore. One of these devices is the subpoena duces tecum reproduced below.

This subpoena reveals that the trustee for the Mastro bankruptcy estate sought among other things, copies of Mr. Mastro’s passport, airline tickets and hotel receipts. As “Secreting Assets Without A Border Trace” indicated, investigators may search for offshore assets by “concentrat[ing] on foreign hotels, payment information, telephone records and on credit card expenses for details of physical movements and lifestyle.”

(Click On The Subpoena To Read It)

*Letter Rogatory Has Been Sanitized / Changed For Privacy Reasons.

Asset Search News Roundup: December 11, 2011

By Fred Abrams on December 11th, 2011 Posted in Asset Search News, Holocaust-Era Assets, Tax Fraud

Individuals ranging from Nazi war criminals to tax fraudsters have long been known to secretly transfer assets by smuggling cash. Today’s “Asset Search News Roundup” focuses on this smuggling.

The January 11, 1941 article “Confirms Nazi Money Hiding“, describes one Holocaust-era scheme in which Nazi war criminal Hermann Goering pocketed smuggled cash. Goering is mentioned at the Asset Search Blog article “During A War Everybody Loots A Little Bit“.
“A Doctor, A Lawyer & Bricks Of Cash In Switzerland” discusses a tax fraud partly facilitated through bulk-cash smuggling. Criminal charges just lodged by Indian police against a top-ranking Tibetan Buddhist monk, also bring up cash smuggling. As The Telegraph and Time report, police claim the monk possessed smuggled cash at his monastery, which is in northern India.

Lawsuit Claims PI’s Could Have Illegally Accessed Bank Info

By Fred Abrams on December 4th, 2011 Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Financial Institutions, Privacy Laws

On January 12, 2011, my local counsel commenced a civil lawsuit in Puerto Rico against two private investigators. One of the defendants in the January 12th lawsuit* was Mr. Terry L. Gilbeau of Rocklin, California. Mr. Gilbeau is a newly admitted attorney, a Certified Fraud Examiner and president of the Checkmate Investigative Services Inc. private investigation firm.

Another defendant in the January 12th lawsuit was private investigator Nicole Bocra of the Virginia-based Infinity Investigative Solutions company. The January 12th lawsuit alleged that the two private investigators might have conspired to illegally access bank customer information at Banco Popular of Puerto Rico. According to this lawsuit, the investigators could have participated in the possible conspiracy while researching whether some bank accounts were connected to plaintiff Victoria Florea’s divorce.

Upon plaintiff Florea’s application, the Court eventually dismissed the January 12th lawsuit without prejudice. On October 17, 2011, plaintiff Florea then filed a new lawsuit against these private investigators. The October 17th lawsuit alleges defendant Bocra first executed a December 5, 2007 agreement to search for bank accounts on behalf of plaintiff Florea. This lawsuit claims that defendants Bocra and / or Gilbeau might have next conspired to illegally access a bank account opening document and other banking information.

An alleged April 6, 2009 e-mail attached to the lawsuit, seems to describe one supposed attempt to access banking information. The alleged e-mail is addressed to plaintiff Florea and is believed to have been written by defendant Bocra. It refers to a so-called “information purveyor” and says “but the bank management is watching the file like a hawk, and they are just waiting for their opportunity to make a copy”:

Asset Search News Roundup: November 26, 2011

By Fred Abrams on November 26th, 2011 Posted in Asset Search News, Bankruptcy, Tax Fraud

Investigating assets by issuing subpoenas and a letter rogatory–

It is well-known that subpoenas may play a critically important role in an asset investigation. To try to locate bankruptcy estate assets for example, the trustee in Michael Mastro’s bankruptcy case subpoenaed credit card records from Amercian Express and a credit file from Equifax. An earlier post about the Mastro bankruptcy is “Mr. Mastro Supposedly Transfers His Rolls Royce & Other Assets.”

A prosecutor investigating an alleged tax fraud originating in Italy, has issued a letter rogatory regarding Chiron Holding LLC of Delaware. The letter rogatory demonstrates that the prosecutor and Italian Finance Police are analyzing if Chiron participated in a suspected scheme to illegally avoid €416,895,973 in capital gains taxes. To read a translated copy of the letter rogatory, click on this image:

Fred L. Abrams has located tens of millions of dollars hidden in offshore tax havens and filed legal proceedings in Zurich, Geneva, Tel Aviv, Amsterdam and Puerto Rico to seek discovery from foreign bank witnesses. A member of the New York bar since 1990, he has handled a wide variety of legal matters in which assets were hidden, such as RICO, money laundering, identity theft and tax fraud.