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

During ultra-high net worth divorces, one party can conceal vast sums of money from the other by going offshore.  Stated differently, divorcing spouses may hide their wealth by utilizing cross-border elements, as money launderers do.   The Financial Action Task Force mentions these elements at a F.A.Q. webpage which says “[l]arge-scale money laundering schemes invariably contain cross-border elements.

Cross-border elements can include foreign bank accounts and nominees.  Expensive stamp or coin collections, fine art and antiquities are sometimes secretly purchased offshore or transferred there.  Valuable real estate bought in a foreign jurisdiction might also be possessed with anonymity by titling it in the name of a paramour or other intermediary.  In anticipation of a divorce, yachts, airplanes, luxury automobiles, diamonds and jewelry may too be hidden offshore.

Foreign trusts or foundations, shell companies, sham loans, fraudulent conveyances and offshore credit or debit cards, can also play roles in these cross-border schemes.  The article Hiding Millions From Your Ex Gets Harder, Thanks To Offshore Tax Crackdown discussed the suspected use of offshore elements by a divorcing husband, Alaskan plastic surgeon Michael D. Brandner.  At the time of his divorce, Dr. Brandner may have parked assets in Central America to hide them from his wife of 28 years.

Among other things, Dr. Brandner could have used a shell company to open a secret bank account.  He too might have converted over $3 million into five cashier’s checks and then secretly transferred these funds to Central America.  Anchorage Doctor Accused of Hiding Millions During Divorce explained that if guilty of the wire fraud charges he faces, Dr. Brandner could be sentenced to 20 years of prison and fined $250,000.  The case pending against Dr. Brandner is known as USA v. Brandner, United States District Court for the District of Alaska, Index No. 13-cr-00103.  Prosecutors in the case are also seeking asset forfeiture.   To read Dr. Brandner’s indictment, click here.

Copyright 2013-2015 Fred L. Abrams