Asset Search Blog : Asset Search & Hidden Assets : Lawyer & Attorney Fred Abrams : Tax Fraud, Asset Investigations

The humanitarian non-profit Slovenian Red Cross operates in 12 regions with 916 local Red Cross organizations.  Its former Secretary-General Mirko Jelenic however, is suspected of involvement  in a criminal "breach of trust", as mentioned by Slovenian law.  He might have used Slovenian Red Cross monies in a phony real estate sale agreed to in the year 2000. 

GNN Inc., of 2316 Baynard Blvd.,Wilmington, could possibly also have been used as a nominee corporation to facilitate the supposed phony sale.  The Delaware U.S. Attorney on behalf of prosecutors in Slovenia, therefore filed a motion on October 14, 2009 seeking the issuance of a letter rogatory about GNN Inc. The Court then issued its October 22, 2009 Order which permitted discovery via a letter rogatory about GNN Inc. in Delaware: 

  

On October 14, 2009 the Delaware U.S. Attorney had additionally sought the issuance of a different letter rogatory for prosecutors in Poland.  As discussed at "Warsaw Prosecutors Eye Possible Money Laundering At 50 Platowcowa Street", the prosecutors in Poland too needed information from witnesses residing in Delaware, for a criminal investigation.

Letters rogatory are sometimes also an available legal remedy for: divorcing spouses, judgment creditors, etc. This is especially true if a divorcing spouse, judgment creditor, etc. is searching for assets that have been laundered through multiple jurisdictions and / or are hidden by cross-border elements.  

(Edited December 10, 2009)

Copyright 2009 Fred L. Abrams

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This "Asset Search News Roundup" is about "politically exposed persons" who are accused of hiding cash during alleged bribe-taking.  One such person is Governor José Roberto Arruda of Brasilia.  "Brazil in shock as secret video catches 'corrupt' governor red-handed", reports that Brazilian Federal Police in "Operation Pandora" possess surveillance video of  the Governor supposedly pocketing bribe money.  Others related to the Governor are also under suspicion for hiding cash bribes because of "Operation Pandora". 

The Governor's press secretary and former Cabinet chief were both videotaped suspiciously counting cash into a bag.  The leader of the Governor's regional government was filmed possibly hiding a bribe in her handbag.  A video clip reveals that "Tribuna do Brasil" newspaper owner Alcyr Collaço, might too have concealed a bribe in his underpants.  "Corruption Allegations Against Federal District Governor" reveals that a different video, could show Brazilian lawmakers Rubens Júnior César Brunelli and Leonardo Prudente praying after the supposed secret transfer of a bribe. 

One U.S. lawmaker similarly accused of hiding bribes is former Massachusetts state senator Dianne Wilkerson.  The surveillance video / still photos at "Public Corruption Charges Against Two Politically Exposed Persons" allegedly show her concealing a bribe by stuffing it into her bra.  A pretrial conference in her public corruption case is currently scheduled for December 15, 2009, according to the relevant docket report:

Copyright 2009 Fred L. Abrams

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A list of asset concealment red flags is available at "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy".  This list includes a beneficial owner's use of shell companies, foreign bank accounts, etc.

Even yet another red flag of asset concealment can be the transfer of assets without any economic benefit, as may happen when there has been a "back-to-back" loan.  As set forth in greater detail at "Laundered Assets", a loan is "back-to-back" when it is secretly fully collateralized and the borrower and the lender are one and the same.

The link chart below also published at "Laundered Assets", is replete with red flags.  Although it has been changed for privacy reasons, this link chart shows how one true beneficial owner hid his / her assets by using: a Liberian shell company; a foreign bank account in Curacao and a "back-to-back" loan disbursed in Amsterdam:   

Copyright 2007-2009 Fred L. Abrams

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On November 23rd the U.S. SEC commenced its enforcement action by filing the following civil complaint for suspected securities fraud against Minneapolis money managers Trevor Cook and Patrick Kiley:

As I last wrote in my  October 29th "Asset Search News Roundup", Mr. Cook and Mr. Kiley could conceivably also face money laundering charges.  If this happens, they would be following in the footsteps of other suspected Ponzi schemers who were named in SEC civil complaints and then criminally prosecuted for alleged money laundering or other suspected financial frauds.

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The General Inspector of Financial Control in Poland received an anonymous tip letter about alleged suspicious activity.  This tip ultimately related to Ukraine resident Sergly Savchuk;  Prime Invest L.L.C. of Florida and the Sesa Polska & Tecza Mazur limited liability companies of 50 Platowcowa Street, Warsaw:

The Warsaw Circuit Prosecutor's Office next started their financial fraud investigation of the two companies at 50 Platowcowa Street.  These Warsaw prosecutors presumably wanted to determine whether the Platowcowa Street companies, Prime Invest LLC and Mr. Savchuk, had laundered money in violation of Article 299 of Poland's penal law.

It soon became apparent that Prime Invest L.L.C was a suspected shell company that had maintained a bank account in Poland.  Mr. Savchuk might have also beneficially owned Prime Invest L.L.C. and had possibly used it in 2004 for the nominee purchase of the former "Evita" mineral water plant in Biskupiec.

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This "Asset Search News Roundup" mentions the sentence of a former Louisiana congressman and the 14,700 U.S. taxpayers who sought partial amnesty from the IRS:

• A November 13th FBI press release explained that Former Louisiana Congressman William Jefferson was sentenced to thirteen years in prison for public corruption and other crimes.  As I discussed at the August 11th "Asset Search News Roundup", the former congressman was found guilty of soliciting bribes and then hiding them through money laundering.  He was also convicted of honest services wire fraud, racketeering and conspiracy.

• Ms. Lynnley Browning's article "14,700 Disclosed Offshore Accounts", reported that a number of U.S. taxpayers have voluntarily disclosed their secret foreign bank accounts as part of an IRS partial amnesty program.  As I wrote at "Some Abusive Offshore Tax Avoidance Schemes At UBS", U.S. taxpayers who own a foreign bank account with assets in excess of $10,000 are required to disclose the same at Schedule B, Part III of their U.S. Individual Tax Return Form 1040. They must also separately file a TDF 90-22.1, (a.k.a. a "FBAR" form).

"14,700 Disclosed Offshore Accounts" indicated that the disclosing taxpayers will be treated with leniency despite their failure to make the above-mentioned filings.  It also stated that the taxpayers may have been prompted to make their disclosures because of the settlement of U.S.A. v. UBS AG, 1:09-cv-20423.  In that case, the IRS tried to compel UBS to supply foreign bank account information belonging to suspected U.S. tax cheats.  As fully described by "UBS & Its 'John Doe' Summons", the IRS sought this information by serving the John Doe Summons depicted below: 

Copyright 2009 Fred L. Abrams

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A complaint verified by Former Premier Michael Misick of the Turks and Caicos Islands, claims hip- hop pioneers David Mays and Raymond Scott breached the Z & M Media LLC operating agreement, at Exhibit "A".  The Former Premier, Mr. Mays, Mr. Scott and others, are believed to hold ownership interests in Z & M Media, which is the operating company for the biweekly  "Hip Hop Weekly Magazine". 

The complaint additionally seeks damages for more than a million dollars from Mr. Mays and Mr. Scott because of an alleged fraud / embezzlement scheme. Amended Complaint at ¶¶ 161-164.  It asserts that Mr. Mays and Mr. Scott might have misappropriated cash from Z & M Media. Id. at ¶¶ 33-44. 

In responding to the complaint, Mr. Mays denied any wrongdoing via his opposing affidavit.  He also stated that Hip Hop Weekly was "the bible of the hip hop industry" with an estimated readership of one million. Opposing Affidavit ¶4.  Since February 2009, the magazine has been sold by the "CVS" chain and at many other retailers throughout the U.S., according to a letter from its distributor:

On April 20, 2009 the Court issued a temporary restraining order against Mr. Mays and Mr. Scott, which prohibited any violation of the above-mentioned operating agreement.  This restraint was continued by the Court's Order dated May 19, 2009.  Via their July 14, 2009 answer, counterclaim and third-party complaint, Mr. Mays and Mr. Scott however, alleged that the Former Premier had unjustifiably brought the complaint to gain complete control of Z & M Media.  The Former Premier would then supposedly sell Z & M Media and its assets to fund his defense against a "likely criminal prosecution by the British government". (Answer, Counterclaim & Third-Party Complaint, at pp. 23-24, ¶3).

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A tax filing at the "Financials Page" of its website reveals that the Alavi Foundation had assets in 2007 with a fair market value of nearly $88 million.  Federal prosecutors meanwhile, filed an amended complaint last Thursday against The Alavi Foundation.  It sought asset forfeiture, as reported by Reuters, The New York Times and an FBI press release.

According to these news accounts, the gravamen of the amended complaint is that the nonprofit Alavi Foundation allegedly concealed the Iranian Government's true beneficial ownership of a N.Y.C. Fifth Avenue building. The Alavi Foundation may have done this along with Bank Melli and ASSA CO. LTD and ASSA CORP. 

As described at  "Bank Melli Accused Of Hiding Its Fifth Avenue Assets", Bank Melli, ASSA Co. LTD. and ASSA CORP. have all been linked to terrorist financing.  All three are currently the subject of Weapons of Mass Destruction sanctions programs and U.S. economic sanctions.

After the filing of the amended complaint, the Court also acted pursuant to 18 U.S.C. §981 and issued a Warrant of Seizure for Alavi Foundation monies maintained at Sterling National Bank:

Copyright 2009 Fred L. Abrams

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The Financial Action Task Force ("FATF"), is the bellwether for the fight against global money laundering and terrorist financing.  Its leading role is recognized by U.S. lawmakers in the Bank Secrecy Act at  31 U.S.C. §5311, which states:  

"FATF’s Forty Recommendations on Money Laundering and the ... Special Recommendations on Terrorist Financing are the recognized global standards for fighting money laundering and terrorist financing. The FATF has engaged in an assessment process for jurisdictions based on their compliance with these standards." 

By following the FATF's Forty Recommendations and Special Recommendations, governmental entities try to detect assets hidden by money launderers, identity thieves and other financial fraudsters.  Consistent with these Recommendations, the FATF just made its October 30th statement calling for greater transparency.  A higher degree of transparency could help uncover assets fraudulently concealed in financial institutions across the globe.

The FATF explained in its statement, that enhanced transparency was needed at financial institutions regarding customer due diligence; beneficial ownership; legal persons / legal arrangements (i.e. nominees); secrecy laws and cross-border exchange of information.

A few "Asset Search Blog" articles exploring these sort of topics are:

1. "Concealing Assets By Circumventing Customer Identification Rules"
    
2. "Beneficial Owners Concealing Their Foreign Bank Accounts"
    
3. "Nominees & Hidden Assets"
    
4. "Financial Discovery & Foreign Bank Secrecy Laws"
    
5. "Asset Search News Roundup: September 23, 2009"

Copyright 2009 Fred L. Abrams

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