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

This "Asset Search News Roundup" is about a former president detained because he may have hidden illicit assets by laundering them; a Bollywood film producer who pleaded guilty to conspiracy to commit money laundering; and a Pennsylvania jury deliberates over the case against an ex-Pennsylvania judge:

1)  As described at my post "White-Collar Crime", hiding assets sometimes leads to  criminal law violations. Such may be the case of former Taiwanese President Chen Shui-bian who may have hidden / laundered as much as $30 million in illicit assets along with nine other people.  According to "Taiwan Detains Chen on Suspicion of Money Laundering (Update1)",  the former president was detained by the Taipei District Court because of alleged money laundering, embezzlement and bribe taking.  The Taipei Times further reports Former President Chen is now at a hospital on a hunger strike, as his detention continues.

2)  The Washington Post and The Times of India mentioned the November 13th guilty plea of Bollywood film producer and the head of Elite Entertainment, Inc., Vijay K. Taneja.  As a Department of Justice press release also explained, Mr. Taneja pleaded guilty to one count of conspiracy to commit money laundering arising from his $33 million dollar mortgage fraud scheme.

3)  Timesleader.com reported that A jury began its deliberations yesterday, in the money laundering and mail fraud trial of ex-Pennsylvania Superior Court Judge Michael Joyce.  Based on news accounts, ex-Judge Joyce collected $440,000 in insurance monies by faking neck and back injuries from a 2001 auto accident.  The U.S. Attorney's Office specifically alleged that Former Judge Joyce deposited the insurance proceeds into a brokerage account he used to purchase real property, an interest in a 1978 Cessna airplane and a Harley-Davidson motorcycle.   

Copyright 2008 Fred L. Abrams

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"Using Divorce To Dissipate Assets & Delay Creditors", explains that a debtor may use a divorce settlement to impede an asset search or forced collection proceeding.  This week's "Asset Search News Roundup" is about a convicted murderer who may have used his divorce in this same way.  It also discusses some new Tax Information Exchange Agreements and how $182,000 had been hidden in the bathroom walls of a Cleveland home.

• "Victim's Father Tries to Collect $60 Million from Serrano", mentions that murderer Nelson Serrano might have protected his assets by transferring them to his wife pursuant to his August 2007 divorce settlement.  Mr. Serrano may have fraudulently transferred his assets in anticipation of the $60 million dollar judgment ultimately awarded against him in favor of the parents of one of his victims. 

• The Organisation for Economic Co-operation and Development ("OECD"), announced on October 30, that the British Virgin Islands, Guernsey and Jersey, entered into Tax Information Exchange Agreements to help combat tax fraud.  As I describe at "Offshore Bank Accounts In Liechtenstein", the OECD had earlier disseminated a list of suspected tax cheats with offshore bank accounts at Liechtenstein's LGT Group.

• The November 8, 2008, New York Times article "Finding Cash in Walls, and Reaping Grief", reports that $182,000 in Depression-era currency was found by a contractor in the bathroom walls of a Cleveland home.

Copyright 2008 Fred L. Abrams

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An asset search may reveal assets concealed by a public corruption scheme; cash smuggling; or money laundering.  Accordingly, this "Asset Search News Roundup" examines the following:

(A)  On October 28, Massachusetts State Senator Dianne Wilkerson was arrested on a criminal complaint for public corruption.  As reported at "FBI: Photos Show Massachusetts Lawmaker Stuffing Bribes in Bra", federal agents allegedly recorded State Senator Wilkerson concealing bribe monies under her sweater, in her bra.  Twelve photos from the undercover operation can be viewed here.

(B)  U.S. border police searching two motor homes on October 26, found $38,780 which had been hidden at the Blue Water Bridge border crossing in Lake Huron, Michigan.  As a press release explained, the smuggled cash was concealed in: a safe built into a closest; a personal bag; a bathroom cabinet with a false floor; and in another compartment.  Just one day before the $38,780 was discovered, border police at the Blue Water Bridge interdicted $2 million in ecstasy pills hidden in a truck.     

(C)  "Risk-Based Approach for Casinos" and "Risk-Based Approach Guidance for Legal Professionals", were recently released / published at the website of The Financial Action Task Force.  The Financial Action Task Force is a leading transnational organization against money laundering.

Copyright 2008 Fred L. Abrams

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This Asset Search News Roundup discusses: hiding assets through International Business Corporations; the continued restraint of Dennis Kozlowski's assets; and the guilty verdict against Senator Ted Stevens for concealing his home renovations and other gifts:

• A private investigator recently asked me how International Business Corporations and / or offshore credit cards may be used to hide assets during a tax fraud.  In "What are some of the Most Common Abusive Tax Schemes?", the IRS provides three examples of tax fraud schemes involving International Business Corporations.  As I explained at "High-Risk Locations & An Asset Search", the IRS also implemented its Offshore Credit Card Program to identify offshore cardholders and make them an "audit priority".

• The October 22 article, "Judge won’t remove Kozlowski asset freeze" reported that the Court briefly extended the restraining order preventing the transfer of Mr. Dennis Kozlowski's assets.  As described by "Using Divorce To Dissipate Assets & Delay Creditors", the Court had initially restrained Mr. Kozlowski's assets only up through October 17, 2008.

• Senator Ted Stevens was convicted this past Monday of  lying about / concealing his home renovations and gifts from a wealthy oil contractor.  The Senator's July 29, 2008 indictment specifically alleged that the Senator had violated 18 U.S.C. §1001 by making false statements in financial disclosure forms.  According to "Sen. Ted Stevens found guilty in corruption case", the Senator had testified for three days during his monthlong public corruption trial.

Copyright 2008 Fred L. Abrams

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Some people commit identity theft or aggravated identity theft and then hide their illicit gains by laundering them.  This Asset Search News Roundup is therefore about both identity theft and money laundering:

• The Daily Pennsylvanian reported that former Drexel student Jocelyn Kirsch was sentenced on October 17th to five years in prison for aggravated identity theft, money laundering and criminal conspiracy.  A criminal information filed against Ms. Kirsch and her co-conspirator Edward Anderton, had accused the two of laundering the proceeds from identity thefts through bank and PayPal accounts.

• As explained at the October 21st article "ID theft: money laundering case", Australian authorities arrested a 29-year old who had allegedly belonged to an identity theft gang and laundered over $280,000.  The 29-year old was the 21st person criminally charged because of Operation Hickey, which was commenced in  Australia in 2006 to investigate identity theft.

• "Criminals look for fall guys in identity theft scam", mentioned how an identity theft scam in the U.K. uses unsuspecting money mules to launder money.  The U.K. trade association APACS, issued a September 25 press release about such recruitment of money mules in the UK.  A recent WalesOnline article also briefly described the case of a British student who was solicited by e-mail to became a money mule.

Copyright 2008 Fred L. Abrams

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At "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy ", I described a number of common asset concealment methods.  Three of these methods, (i.e. cash, portable valuable commodities and nominees), are explored by this week's "Asset Search News Roundup":

a)  As I suggested to Forbes Magazine in its March 13, 2008 article "Cash Is King, cash remains hard to trace and can be used to hide one's assets.  This very point was partly demonstrated by "Stash of Cash in Escambia County", which explained that a recent drug raid discovered hundreds of thousands of dollars at one Florida home, hidden in book bags, air conditioning ducts, etc.

b)  The October 2008 article "UBS' Diamond Smuggling Scandal" mentioned how portable valuable commodities like diamonds may be used to hide assets.  The article disclosed that UBS banker Bradley Birkenfeld had hidden assets from the IRS by transporting diamonds in a tube of toothpaste at Swiss and U.S. border crossings.  Mr. Birkenfeld's other asset concealment methods were discussed at my post, "Offering Offshore Asset Protection To Tax Cheats".

c)  Hareetz.com reported in "Police list reveals Abergil family assets", that wives and several others may have essentially been used as nominees to conceal the assets of a suspected Israeli criminal cartel.  Identified by Israeli authorities as early as 2004, some of these alleged illicit assets include: dozens of vehicles, 37 companies and 48 apartments.

Copyright 2008 Fred L. Abrams

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Covered by this "Asset Search News Roundup" are: a German student arrested for hiding $15 million in his luggage; Sir Ian Blair's resignation amidst a public corruption claim; and the financial fraud investigation of AIG Insurance Company.

• German customs officials made their largest cash seizure ever from an individual, after finding euros valued at $15 million hidden in a student's luggage.  As mentioned by the Sydney Morning Herald, the 29- year-old German student was at Frankfurt Airport waiting to board a flight to the Middle East.  The student was likely a courier hiding / smuggling cash and is under investigation for suspected money laundering.

• When Sir Ian Blair issued an October 2 statement explaining his resignation as London's 24th Metropolitan Police Commissioner, Transparency International issued a statement of its own. Based on Transparency International's statement, Sir Ian Blair's resignation is related to public corruption allegations.  As the Daily Mail mentioned, Sir Ian Blair was accused of improperly giving more than £3million in Metropolitan Police contracts to his friend of 30 years, Andy  Miller. 

• As was widely reported, AIG Insurance Company accepted an $85 billion federal government rescue loan and then spent hundreds of thousands on a lavish business event which included $23,000 in spa charges.  Although AIG's spa charges did not involve criminal wrongdoing, AIG is already the subject of an ongoing financial fraud investigation.  

Copyright 2008 Fred L. Abrams

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Given the fact that some beneficial owners conceal funds in bank accounts used as money laundering "links", this "Asset Search News Roundup" describes money laundering news from around the world:

1. Australia: The Australian Institute of Criminology, has released its September report, "Money laundering risks of prepaid stored value cards".  Said report explains money laundering through the abuse of plastic cards, ("prepaid stored value cards"), which store value electronically.

2.  Switzerland: According to Swissinfo.ch, the Swiss Federal Prosecutor's Office confirmed that ten affiliates of the People's Mujahideen Organisation of Iran ("PMOI"), were just arrested by the authorities for money laundering.  PMOI remains banned by the European Union because PMOI is a known terrorist group.  The U.S. Treasury Department similarly lists PMOI at page 218 of its Specially Designated Nationals List, dated September 30, 2008.

3.  United States: Examiner.com reported this week, that Mr. Juan Solano was sentenced to 15 months for money laundering and harboring illegal aliens via his Maryland "El Pollo Rico" restaurant.  According to a Department of Justice press release, Mr. Solano and his sister Consuelo Solano were also ordered to hand over a total of $7.2 million in assets, because of the government's asset forfeiture claim.

Copyright 2008 Fred L. Abrams

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Since public corruption crimes can involve the concealment of bribe money or other illicit assets, public corruption is the subject of this "Asset Search News Roundup".  As partly mentioned at  "White-Collar Crime & A Former Top Cop", Transparency International's Corruption Perception Index annually ranks 180 countries by their perceived levels of corruption.  

The Corruption Perception Index specifically does this by assessing countries on a scale of "1" to "10.  As more fully described by a press release, the 2008 Corruption Perception Index was just released on September 23.  According to said press release, corruption is falling in Ireland while it is rising in the neighboring United Kingdom.

Copyright 2008 Fred L. Abrams

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The hacking of vice presidential candidate Governor Palin's e-mail account at Yahoo, is examined by this "Asset Search News Roundup".  Based on the Washington Post's "Hacker impersonated Palin, stole e-mail password ", the hacker violated federal privacy law 18 U.S.C. § 1030, (Fraud and related activity in connection with computers).

The hacker is also suspected of pretexting, (i.e. using false pretenses), while contacting Yahoo to gain access to Governor Palin's e-mail account.  Pretexters sometimes illegally access other kinds of personal information, as described at: "Pretexting During An Asset Search" and "The Gramm-Leach-Bliley Act & An Asset Search".

Copyright 2008 Fred L. Abrams

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This "Asset Search Roundup" covers the guilty plea of Raffaello Follieri; a suspected tax return preparer fraud in Minnesota; and how cash is sometimes hidden by "zappers":

• Raffaello Follieri has pleaded guilty to conspiracy, wire fraud and money laundering charges in U.S.A. v. Follieri, according to a September 11, 2008 Wall Street Journal article.  As set forth in an earlier press release, Mr. Follieri had been arrested for a fraudulent investment scheme in which he offered to sell real estate on behalf  of the Vatican.

• A September 4, 2008 Star Tribune article reported that Julius Nyamweya Kiage of Brooklyn Park, Minnesota is essentially being investigated for a suspected tax return preparer fraud.  Mr. Kiage is the proprietor of J.K. Accounting & Co. and might soon face a variety of federal charges.

• As mentioned by the August 29, 2008, New York Times Article "With Software, Till Tampering Is Hard to Find",  "zapper" software programs can delete electronically recorded sales information from a cash register / at the point-of-sale.  They are therefore sometimes used to conceal cash sales during tax frauds.  The misuse of  "zappers" is more fully discussed at Boston University School of Law Working Paper 08-07, "Zappers: Tax Fraud, Technology and Terrorist Funding". 

Copyright 2008 Fred L. Abrams

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Mr. Frank Lowy of Australia; Puerto Rico Governor Anibal Acevedo Vila; and articles regarding privacy issues; are all mentioned in this "Asset Search News Roundup":

• Although the U.S. Senate Subcommittee report "Tax Haven Banks And U.S. Tax Compliance" accused Mr. Frank Lowy of concealing $68 million in a suspected tax fraud, The Australian Business advised that Mr. Lowy's Westfield Group had a $928 million operating profit for the half-year.  

• A U.S. Department of Justice press release reported that Puerto Rico's Governor Anibal Acevedo Vila was indicted on August 19, 2008 for money laundering and wire fraud.  As the Associated Press explained in "Puerto Rico governor indicted on 5 new charges", the Governor's August 19th indictment was his second one.  The Governor's first indictment is fully described at my post, "Puerto Rico's Governor and Public Corruption".

• The sale of data by the Iowa County Recorders Association to Datatree, has been temporarily suspended according to DesMoinesRegister.Com.  The sale raises privacy concerns because it includes the transfer of personal information like social security numbers.  Also raising privacy issues, is a recent Knoxnews.com article about a Tennessee Highway Patrol trooper who allegedly conducted unauthorized background checks.

 Copyright 2008 Fred L. Abrams

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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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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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