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Asset Search Blog

Investigating & Recovering Hidden Money & Other Assets

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: Private Detectives, Bank Searches & An Alleged Negligent Investigation

Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Divorce & Hidden Money, Hidden Money, Money Laundering, Privacy Laws

This is the fifth post in the “Divorce & Hidden Money” series.  The post asks: what standards should private detectives follow when they investigate a divorcing spouse’s bank account?  At the conclusion, the post discusses some best practices.  

The August 7, 2012 complaint I filed in Florea v. Bocra claimed that Plaintiff Victoria Florea, (“Florea”), wanted to learn whether her ex-husband Francis Driscoll had hidden money or other assets during the couple’s 2007 Massachusetts divorce.

I)  THE PRIVATE DETECTIVES

Private detective Nicole Bocra of Infinity Investigative Solutions then allegedly offered to investigate Francis Driscoll by conducting bank searches about him, at Puerto Rico and other foreign banks.  Florea asserted that pursuant to contracts for the bank searches, she paid Bocra and/or Infinity Investigative Solutions, at least $41,200 between about December 6, 2007 through about October 24, 2008.

Florea too claimed that in pursuance of these bank searches, Bocra worked with California private detective Terry L. Gilbeau, (Gilbeau), of Checkmate Investigative Services, Inc.  Gilbeau currently practices law in Rocklin, California and the August 7th complaint alleged Gilbeau had been a Certified Fraud Examiner since 1989, certified by the world’s largest anti-fraud organization, The Association of Certified Fraud Examiners.

II) THE SUPPOSED BANK SEARCHES

The complaint additionally alleged that Bocra and Gilbeau participated in Puerto Rico bank searches even though federal law safeguarded a bank customer’s privacy; and Puerto Rico banks protected bank account information from public disclosure pursuant to the Gramm-Leach-Bliley Act, at 15 U.S.C. § 6801 (a) & (b)(1).

According to the allegations of the complaint, Bocra and Gilbeau negligently used intermediaries as “backdoor channels” during their supposed bank searches of Francis Driscoll.  Bocra’s and Gilbeau’s alleged use of intermediaries had supposedly created the high risk that Bocra and Gilbeau would collect spurious or stolen information from the banks. Continue Reading

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:

Continue Reading

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.

Continue Reading

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.

Continue Reading

Mr. Francis Supposedly Built A Business Empire By Defrauding The US

Posted in Asset Search/Fraud Investigation, Public Corruption, White-Collar Crime Generally

Leonard Glenn Francis is a Malaysian national who is the CEO and owner of Glenn Defense Marine Asia, a general contractor to the United States Navy.   He is suspected of using Glenn Defense Marine Asia to defraud the Navy out of an estimated $20 million.  At a November 22, 2013 court filing, prosecutors argued that Mr. Francis “ has built a business empire based on defrauding the United States.”

Mr. Francis is accused of  fraudulently billing the Navy while supplying its ships with marine husbanding services (i.e. fuel, tugboats, food etc.).  Mr. Francis supposedly also bribed senior Naval officials with cash, lavish travel and the service of prostitutes.  These Naval officials are thought to have provided Mr. Francis with secret information about criminal investigations into him; and / or they allegedly disclosed confidential defense procurement information.

The Washington Post reported that the possible involvement of two admirals in the alleged public corruption scheme, “makes the crisis the worst to tar the Navy since the 1991 Tailhook scandal, when a convention of naval aviators sexually assaulted scores of women.”  A September 12, 2013 complaint filed in one of three criminal cases pending against Mr. Francis, included purported e-mails.  They were allegedly sent from April 27 to May 21, 2012, between Mr. Francis and a codefendant, Mr. John Bertrand Beliveau, Jr.  Mr. Beliveau has been employed as a Special Agent by the Naval Criminal Investigative Service since about 2002 and his purported e-mails are set forth below.

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Stashed Paintings Bring Issue Of Art Restitution To The Forefront

Posted in Asset Search/Fraud Investigation, Financial Institutions, Holocaust-Era Assets, Swiss Banks

In 2010, German customs police discovered that Mr. Cornelius Gurlitt had travelled by train from Zurich to Munich with a large sum of cash.  A subsequent investigation revealed that Mr. Gurlitt reportedly failed to file tax returns.  Since Mr. Gurlitt was suspected of a possible tax fraud, a search warrant for his Munich apartment was issued.  Reuters, the Daily Mail, and The Economist explained that during the execution of the search warrant, approximately 1400 paintings were discovered stashed in the apartment.

As Germany Says 590 Artworks in Munich Haul May Be Nazi Loot suggests, some of these paintings will be the subjects of Holocaust-era art restitution claims filed by the heirs of Jewish art collectors.  Raymond Dowd, Esq. handles these kinds of claims.  Mr. Dowd tried Bakalar v. Vavra, Index No. 05-CV-3037 (S.D.N.Y.), the first Nazi-era art case ever to go to trial in federal court.  He also lectured widely on Nazi-era art restitution cases, including at Yad Vashem, Jerusalem, Israel; the Jewish Museum, Berlin, Germany; The Prague Conference on Holocaust-Era Assets, Czech Republic; the New York State Bar Association and the Association of the Bar of the City of New York.

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Laundering Assets By Putting A Lawyer To Work

Posted in Financial Institutions, Money Laundering

My October 24th post “Concealing Monies In A Cayman Islands Bank Account”, supplied the fact pattern of a divorcing husband hiding funds offshore.  That divorcing husband hid assets by putting a lawyer and other elements to work.  The following money laundering typology ¹ similarly analyzes a scheme thought to have been facilitated by a lawyer:

¹Money Laundering Typology Courtesy of The Egmont Group of Financial Intelligence Units

Copyright 2013 Fred L. Abrams