Asset Search, White Collar Crime : Lawyer & Attorney Fred Abrams : Tax Fraud, Financial Fraud

The instant "Asset Search News Roundup" mentions a suspected tax cheat who may have absconded to Costa Rica; Switzerland's release of $60 million belonging to a leading Pakistani politician; and that software designed to combat financial crime is being tested in Australia:

• Michael Miskin is under investigation for parking undeclared revenue at Liechtenstein's LGT Bank, but may have absconded to Costa Rica.  According to The Sunday Times of London, Mr. Miskin is suspected of tax fraud because he was identified in a stolen LGT Bank customer list.  The Sunday Times also reported that Mr. Miskin had used LGT Bank to hide assets from his wife during divorce proceedings five years ago.

• The New York Times reported that Swiss authorities have released about $60 million beneficially owned by leading politician Asif Ali Zardari, who may soon be named Pakistan's president. Mr. Zardari's funds were frozen as early as 1997 because of a  Swiss money laundering probe.

• The United Nations Office on Drugs and Crime, recently advised that its "goAML" software will be tested by the Egmont Group through the Australian Financial Intelligence Unit,  "AUSTRAC".   A news release about the testing, explained that "goAML" is already being used in Canada and is designed to combat financial crimes like money laundering and terrorist financing.  Further information about "goAML" is described at its six page brochure.

 Copyright 2008 Fred L. Abrams

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Ndubuisi Joseph Okafor, M.D., had practiced primary care medicine through the Okafor Group in the Washington D.C. metropolitan area.  He was however, sentenced in U.S.A. v. Okafor, to 65 months in prison followed by three years of supervised release for health insurance fraud and tax evasion.  He was also ordered to pay restitution in the amount of $769,192 to tax authorities and $33,060 to Medicare.


As partly described by his July 18, 2008 criminal judgment, Dr. Okafor had entered a plea agreement for violating 18 U.S.C. §1347 (Healthcare Fraud) along with 26 U.S.C. §§7201 (Tax Evasion) & 7206 {2} (False Income Tax Returns).  According to a press release about Dr. Okafor's plea agreement, Dr. Okafor had: submitted phony bills to Medicare and other health care providers; filed false tax returns; and diverted business revenue by using a corporate checking account to pay for personal expenses. 


Based on that same press release, Dr. Okafor had also engaged in an abusive offshore tax avoidance scheme.  This was true because Dr. Okafor had used his two offshore shell companies formed in the Bahamas to transfer undeclared revenue from his Washington D.C. Okafor Group.  As suggested by "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy", the use of shell companies and a high-risk geographical location like the Bahamas, is a red flag that assets may have been hidden.


Copyright 2008 Fred L. Abrams

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This week's roundup highlights three different matters in which assets were hidden by a "john" patronizing prostitutes; a Pakistani national engaged in terrorist financing; and an attorney from Utah:

• The Charlotte Observer reported at  "2nd guilty plea in call-girl ring case" , that a "john" pleaded guilty to tax fraud for hiding revenue from the IRS by deducting his payments to prostitutes as a business expense of his construction company. 

• An FBI press release announced yesterday that Pakistani national Saifullah Anjum Ranjha pleaded guilty to conspiring to launder money and to concealing terrorist financing through the hawala system.  As briefly mentioned by  "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy", hawala and other alternate remittance systems are common money laundering / asset concealment methods. 

• Attorney Dennis B. Evanson of Utah, was sentenced on August 15, 2008 to serve ten years in prison for his role in an abusive offshore tax avoidance scheme.  Mr. Evanson had earlier been indicted with five co-defendants for concealing assets by using nominees, offshore bank accounts and other means.

 Copyright 2008 Fred L. Abrams

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In "Army Major Arrested For Money Laundering", I described how Major John Cockerham and his wife Melissa Cockerham were prosecuted for a bribery / money laundering scheme.  According to their indictment, Major Cockerham had taken bribes as an Army Contracting Officer in Kuwait while awarding contracts for bottled water, etc.  Since their indictment, Major Cockerham pleaded guilty to conspiracy, bribery and money laundering conspiracy, and his wife pleaded guitly to money laundering conspiracy.  Although a recent docket report reflects that Major Cockerham and his wife await sentencing on October 22, 2008, Major Cockerham's sister Carolyn Blake, is still scheduled for trial in connection with their case. 

 

A second Army Major however, also awaits sentencing because of the separate bribery scheme described by the three-count Information filed in U.S.A. v. James Momon, Jr.  Major Momon, (who in 2005 took over Major Cockerham's job as a Contracting Officer in Kuwait), pleaded guilty on August 13 to conspiracy and bribery charges.  A press release about the guilty plea, mentions that Major Momon began taking bribes in 2005, while awarding bottled water and other Army contracts. 

 

Just as Major Cockerham hid bribe monies by using offshore bank accounts in high-risk locations such as Kuwait and Dubai, Major Momon similarly hid his bribes in bank accounts in the Philippines.  Furthermore, both Major Cockerham and Major Momon had each used shell companies as a means to conceal the bribes they had received.

 

Copyright 2008 Fred L. Abrams

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A litigant demonstrating that an adversary has hidden assets offshore, bears the burden of proof in court under Federal Rule of Evidence 301 or other evidentiary  rules.  Such a litigant may be able to satisfy this burden with admissible evidence like authenticated copies of an adversary's offshore bank account records.  Evidence like admissible copies of offshore bank account records is however, often located out of the U.S. or otherwise difficult to obtain.


My post "Bearer Shares & An Asset Search" for example, explained how one divorcing spouse and his business partners used a variety of methods to minimize any evidence left in the U.S. by their assets parked in an offshore bank.  In the foregoing kind of situation, a Letter Rogatory, (a.k.a " A Request For Legal Assistance" or "Letter of Request"), can play a vital role in a litigant's offshore asset search.  This is true because a Letter Rogatory may possibly be used to elicit legally sufficient evidence from an offshore bank or other foreign witness.


A Letter Rogatory can sometimes be filed as mentioned by the Hague Evidence Convention (20: Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters Hague Convention).  Examples of some of the kinds of Letters Rogatory I have filed can be found at my posts: "An Asset Search In Israel", "An Asset Search In Switzerland" and "Asset Search Tips For Divorce & Child Support Cases".


A variety of factors ordinarily determine how effective a Letter Rogatory will be in eliciting evidence from a foreign bank or other foreign witness.  Some of these factors may include:

• Whether the Letter Rogatory is filed pursuant to any foreign law exceptions to bank secrecy / professional secrecy laws;

• Whether competent foreign counsel has been retained to help draft and then further prosecute the Letter Rogatory;

• And whether the Court perceives a Letter Rogatory to be a fishing expedition because it is overly broad.

 

Copyright 2008 Fred L. Abrams

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Class-action attorney Richard Scruggs was well-known for his litigation against the tobacco industry, HMOs, State Farm Insurance and many others.  On June 27, 2008, he was however, sentenced to five years of prison for conspiring to pay a $50,000 bribe to Mississippi Judge Henry L. Lackey of the Third Circuit Judicial District Court in Lafayette County.  Mr. Scruggs had used attorney Timothy Balducci, as his nominee, (i.e. representative), to transfer bribe monies to Judge Lackey.  By using a nominee to transfer his bribe, Mr. Scruggs had disguised the fact that he was the source of the bribe.


Another example of how nominees are sometimes used to transfer money in judicial bribery schemes, was provided at my post  "Using Multiple Jurisdictions To Launder Money".  As that post explained, the U.S. Department of Justice filed an amended complaint alleging that Ms. Primarosa Battistella had used Swiss bank accounts and three lawyers to transfer bribe monies to judges in Italy.  According to the amended complaint at paragraphs "16" - "18", the three lawyers had essentially acted as nominees who transferred the bribes.


Mr. Scruggs and Ms. Battistella both remind me of a former client who had been a suspected member of organized crime and was indicted for tampering with a witness.  At that time, the client's relative approached me in the hallway of my office and said:  "Would it help the case if  the judge was given a cash payment?".  Disgusted, I abruptly walked away.


Copyright 2008 Fred L. Abrams

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