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.
Lawyers, Accountants, Financial Advisors & Other Gatekeepers- While acting as intermediaries for a divorcing spouse, gatekeepers can easily wire transfer the divorcing spouse’s money across international borders. A divorcing spouse might also secretly maintain funds by depositing them into a gatekeeper’s offshore bank account.
Trade-Based Money Laundering (i.e. Washing Illicit Proceeds Through Trade Transactions)- Generating phony invoices, over-valuing or under-valuing goods and multiple invoicing, are just a few ways trade-based laundering is carried out. The chart reproduced below reveals how funds were transferred and washed at the time of one trade-based laundering scheme.
First Image courtesy of Flickr (Licensed) by HM Revenue & Customs.
Second Image courtesy of Flickr (Licensed) by Jeffrey Beall.
Third Image courtesy of Flickr (Licensed) by Karen Roe.
Fourth Image courtesy of Flickr (Licensed) by Images Money.
Fifth Image courtesy of U.S. Immigration and Customs Enforcement.
(Edited January 25, 14)
Copyright 2013 Fred L. Abrams