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

Securities fraudster Trevor Cook, assets that might have been misappropriated from former East Germany, and over $2 million is interdicted at a U.S.-Mexican border crossing:
 

• Ex-Minneapolis money manager and securities fraudster Trevor Cook was sentenced a week ago to serve twenty-five years in prison for violating 18 U.S.C. §1341 (mail fraud) and 26 U.S.C. §7201 (tax fraud).  As Mr. Cook's sentencing memorandum reveals, he had earlier argued that the Court should impose just a twenty-year sentence. 
  
   
• Swiss banking documents that might memorialize the misappropriation of assets by parties and people's organizations from former East Germany, were turned over to the German Embassy in Bern on July 14th.  A July 15th media release issued by the Swiss Federal Department of Foreign Affairs reported that: "Germany had previously asked Switzerland for the documents in order to obtain further information about illegal financial movements before and after the fall of the Berlin Wall."
   

• Federal agents for the Calexico downtown port of entry at the U.S.-Mexican border interdicted more than $2 million dollars which possibly belongs to narco-traffickers.  The $2 million pictured below, was uncovered on August 8th during a vehicle inspection that included the use of  a currency-firearm detector dog.  A press release asserts that the $2 million had been hidden in luggage, a duffle bag and a plastic tub that were placed inside a vehicle.
   

Photo: U.S. Customs and Border Protection

Copyright 2010 Fred L. Abrams

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A Van Gogh goes missing; articles about asset recovery basics; and Barclay's Bank:

1. Egyptian authorities are trying to recover a Van Gogh that went missing on Saturday after it was stolen from the Mohamed Mahmoud Khalil Museum.  The museum houses a fine art collection worth at least $1.2 billion and the the Van Gogh's theft is described at "Van Gogh $55 Million `Poppy Flowers' Theft in Cairo Blamed on Lax Security".
   
    
2. Divorcing spouses, judgment creditors, domestic tax authorities, etc. can all be claimants relegated to an asset search / an asset recovery effort against beneficial owners fraudulently concealing assets.  Articles I have published regarding asset recovery basics include: "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy"; "Recognizing Hidden Assets, The Red Flags"; "An Asset Search In Geneva"; & "A Primer For Gathering Financial Intelligence".
   
    
3. Barclays Bank PLC has agreed to forfeit $298 million according to U.S. Treasury's Office of Foreign Assets Control and the U.S. Department of Justice.  At paragraphs 5 & 6 of the settlement agreement available here, Barclays admits it sometimes concealed the identities of bank customers who were subject to U.S. sanction programs.  Barclay's investment banking division had meanwhile, recently been the financial advisor, the restructuring agent and sole bookrunner for FDIC's $233 million dollar sale of commercial mortgage-backed notes, as explained by a press release.

Copyright 2010 Fred L. Abrams

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The August 14th "Asset Search News Roundup" mentions money laundering:

1. So far this summer the Financial Action Task Force published evaluations of the anti-money laundering efforts undertaken by Brazil, India and Saudi Arabia.  The Financial Action Task Force is a leading anti-money laundering organization, as described at "Anti-Money Laundering Bellwether Seeks Transparency Across The Globe".
    
2. Britian's Financial Services Agency has issued an August 2nd "Decision Notice" fining the Royal Bank of Scotland Group £5.6 million, (i.e. $8.9 million dollars), for acting in derogation of the 2007 Money Laundering Regulation.*  The Royal Bank of Scotland Group was accused of failing to identify bank customers subject to the UK's terrorist sanction list.  Reuters wrote about the fine and more information about it is available here.
    
3. The link chart below supplied by U.S. Treasury's Office of Foreign Assets Control, shows the alleged Zambada Financial Network.  The chart and its accompanying press release raise the question of whether suspected Sinaloa drug cartel leader Ismael Zambada-Garcia laundered assets through two companies believed to be his nominees, Mexico Arte y Diseno de Culiacan S.A. de C.V. and Autotransportes JYM S.A. de C.V.

*Money Laundering Regulations 2007, is reproduced under the terms of Crown Copyright Policy Guidance issued by HMSO.

**Chart: U.S. Treasury's Office of Foreign Assets Control

Copyright 2010 Fred L. Abrams

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425 pounds of hidden marijuana; Transparency International; and the defenses to a clawback lawsuit; are discussed at the August 5th "Asset Search News Roundup":
  

• Federal agents at a U.S.-Mexican land crossing interdicted more than 425 pounds of marijuana on July 24, 2010.  As "Marijuana Encased in Cement Seized by CBP" explains, the marijuana had been concealed in the shipment of concrete lawn furniture partly shown below.
  
  
  

• Along with its news release dated July 28th, Transparency International released its sixth annual progress report.  The report rates countries on their performance under The OECD Anti-Bribery Convention and highlights the problem of corrupt politically exposed persons.
  
   
• "Madoff trustee could sue 1,000 Ponzi victims" refers to the new clawback lawsuits Madoff trustee Irving Picard is expected to commence.  These lawsuits could be filed against investors who benefited from Madoff's Ponzi scheme by acquiring so-called "false profits".  Investors subject to clawback in the aftermath of a securities fraud, sometimes assert that the Court lacks in personam jurisdiction in their case.  Other possible defenses to a clawback lawsuit are that an investor acted in good faith, made an exchange for value, or was a secondary, tertiary, etc. transferee.
   
   

Copyright 2010 Fred L. Abrams

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This "Asset Search News Roundup" features France's richest woman; a retired Orlando police officer; and actor Wesley Snipes:
 

1. "Police question French heiress over scandal" reports that France's richest woman, L'Oreal heiress Liliane Bettencourt, is suspected of hiding assets from French tax authorities.  Among other things, French authorities are believed to be investigating whether the heiress could have concealed as much as $100 million by laundering through two Swiss bank accounts.
    
2. Retired Orlando, Florida police officer Amy Bretches was convicted on July 21st of money laundering.  Her indictment alleged that she unlawfully acquired FEMA monies, hiding them via financial accounts / a certificate of deposit.  The jury's July 21st verdict sheet filed in Ms. Bretches' case, shows she was acquitted of one money laundering charge and found guilty of two.
    
3. Hollywood actor Wesley Snipes lost his appeal this month when his tax fraud conviction was upheld.  Mr. Snipes had been convicted in 2008 of violating 26 U.S.C. § 7203 by failing to file tax returns for the years 1999, 2000 and 2001.  He faces thirty-six months in prison, as discussed by a decision from the Eleventh Circuit Court of Appeals.
   
    
(Click On The Image To Read The Court of Appeals Decision)

 Copyright 2010 Fred L. Abrams

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Alleged medicare fraud, joint tax audits and recovered art are discussed by this "Asset Search News Roundup":
 

1. Federal prosecutors announced Friday that ninety-four people were charged with participating in an alleged attempt to defraud the Medicare program out of $251 million.  A Department of Justice press release explained that arrests related to the case were made in Miami, New York, Detroit and Baton Rouge.
    
    
2. IRS Commissioner Douglas Shulman's June 8th speech before the OECD, described the anticipated use of joint audits of businesses engaged in cross-border activities.  Joint audits could be conducted by tax authorities from different countries, sharing information in their fight against international tax fraud.
    
    
3. Eleven paintings that had gone missing after WWII from the Pirmasens municipal museum's collection were just recovered and returned to Germany.  Among the returned paintings were three by German genre painter Heinrich Buerkel.  As set forth by a press release, the grand-niece of deceased U.S. serviceman Harry Gursky had alerted U.S. officials about the paintings and surrendered them.  The late Mr. Gursky might have stolen the paintings after the allied invasion of Germany in 1945.  He may have brought the paintings into the U.S. and is believed to have hidden them in his basement.
   
   (One Of Heinrich Buerkel's Paintings Returned To Germany)

    

   Photo Courtesy of ICE

   Copyright 2010 Fred L. Abrams

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Today's "Asset Search News Roundup" examines the criminal investigation into HSBC and the SEC's case against Kenneth Wayne McLeod's estate:

• "U.S. Widens Tax Inquiry Into HSBC" reports that prosecutors are "ramping up their criminal investigation" of HSBC after U.S. taxpayers allegedly used foreign HSBC accounts to hide undeclared assets.  My April 21, 2010 "Asset Search News Roundup" mentioned these same U.S. taxpayers, who were accused of using foreign HSBC accounts to conceal assets from the IRS. 

• "Hundreds of Federal Agents Fall Victim to Ponzi Scheme" essentially describes the June 24, 2010 securities fraud case brought by the SEC against the estate of recently deceased Kenneth Wayne McLeod.  Mr. McLeod died from a self-inflicted gunshot wound on June 22nd in Jacksonville, Fla.  He allegedly ran a 22-year Ponzi scheme at his retirement benefits consulting firm and is thought to have defrauded agents from the FBI, ICE and DEA and others, out of $34 million dollars.  The securities fraud complaint filed by the SEC against Mr. McLeod's estate is available here:

 

 Copyright 2010 Fred L. Abrams

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The July 4th "Asset Search News Roundup" concentrates on Rudolf Leopold and cross-border activities:
 

1. Austrian museum director and art collector Rudolf Leopold died on Tuesday, as pointed out by both the Associated Press and the New York Times.  According to the Copyright Litigation Blog's July 2nd article, Mr. Leopold's death basically raises the issue of Austria's willingness to return Nazi-looted art, the subject of Holocaust-era art restitution claims.
    
    
2. "Tracking Trevor Cook's Assets Across U.S.-Swiss Borders" highlights how one particular Ponzi schemer could have used cross-border elements to launder criminal proceeds. The "Egmont Group" case study which follows, similarly demonstrates the use of cross-border elements, (i.e. multiple jurisdictions), by human traffickers and / or terrorist financiers.

 

Copyright 2010 Fred L. Abrams

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Discussed today are Arizona's attempt to stop cross-border crime and Minneapolis Ponzi schemer Trevor Cook:
 

+"Goddard launches plan to fight money laundering; Rocky Point Police Chief ambushed" states that Arizona Attorney General Terry Goddard has adopted a new anti-money laundering plan.  This plan is part of Arizona's effort to combat narco-traffickers engaged in various cross-border crimes.  As "A Strategy Of Seizing Sinaloa Drug Cartel Assets" suggested, asset forfeiture can be a critically important element in an anti-money laundering program.

++The June 16th "Asset Search News Roundup" last mentioned securities fraudster and Ponzi schemer Trevor Cook.  The Cook receiver recovering receivership estate assets on behalf of Cook's damaged investors filed a motion and supporting declaration for the reimbursement of expenses incurred this past May.  The Court's June 22nd docket entry additionally reflects that Mr. Cook is next scheduled to be sentenced in his criminal case on July 26, 2010 at 3:00 PM.

Copyright 2010 Fred L. Abrams

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The financial fraud investigation connected to Minneapolis money manager Trevor Cook is thought to have widened; Andrew B. Silva is sentenced in Virginia for tax fraud; and the delay in disclosing the names of some UBS AG bank customers:

• "FBI now is investigating Trevor Cook's associates" reports that governmental authorities have broadened their financial fraud investigation of Trevor Cook's Ponzi scheme.  I earlier wrote about Mr. Cook's 33 minute plea hearing at the April 14, 2010 "Asset Search News Roundup".
   
• Bloomberg.com's article "Surgeon Avoids Prison for Plotting to Hide HSBC Cash" supplied the details of the June 11th sentencing of Andrew B. Silva in Virginia federal court.  As I wrote at A Doctor, A Lawyer & Bricks Of Cash In Switzerland, Andrew B. Silva had smuggled cash in packages containing less than $10,000 during his abusive offshore tax avoidance scheme.
   
• The August 23, 2009 Asset Search News Roundup referred to the settlement of the UBS "John Doe" summons case pursuant to U.S.-Swiss tax treaties.  "Swiss Parliament Passes UBS Bill, But the IRS Doesn’t Yet Have Names" too mentioned that settlement.  It explained that there has been a delay implementing the settlement, in disclosing the UBS AG bank customers who are suspected U.S. tax cheats.

Copyright 2010 Fred L. Abrams

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"If A Judge Can See Your Assets, He Can Seize Them", mentioned that shell companies formed in Nevada, Wyoming or Delaware especially lacked transparency because in these states there are virtually no reporting requirements about company managers, shareholders, etc. 

Some beneficial owners therefore anonymously establish Nevada, Wyoming, or Delaware shell companies and then use them to open nominee bank accounts through which assets can be laundered or otherwise concealed.  My May 5, 2010 "Weekly Asset Search News Roundup" additionally described "Asset Managing Group, Inc.", which offers anonymity by registering yachts and aircraft via Delaware formed companies.

The Levin-Grassley-McCaskill Incorporation Transparency and Law Enforcement Assistance Act addresses the above situations.  This proposed legislation has already been the subject of a November 5, 2009 hearing by the Committee on Homeland Security and Governmental Affairs.  If this bill became U.S. law, it would require a company's true beneficial owner to be identified / disclosed:

Copyright 2010 Fred L. Abrams

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This "Asset Search News Roundup" highlights an updated tax protocol, a $40 million dollar asset recovery and the sentencing of New York securities fraudster Matthew D. Weitzman:

1. On May 27, 2010 the Organisation For Economic Co-Operation And Development announced that the United States and ten other countries agreed to an updated tax protocol which provides for increased cooperation in the fight against tax fraud with cross-border elements.
   
    
2. A U.S. Department of Justice press release explained that over $40 million dollars was recovered by asset forfeiture for injured investors in Japan who supplied funds to suspected Ponzi schemer Isamu Kuroiwa.  Mr. Kuroiwa is thought to have defrauded 30,000 plus victims out of about $1 billion dollars.
   
    
3. As more fully set forth here, securities fraudster Matthew D. Weitzman of Armonk, N.Y. was sentenced last week to 97 months in prison.  A June 10, 2009 SEC civil complaint  had alleged that an injured investor in late March 2009 discovered part of the fraud and apparently confronted Mr. Weitzman about it.  Page 13 of the sentencing memorandum in Mr. Weitzman's criminal case meanwhile, emphasized that Mr. Weitzman voluntarily reported his fraud to governmental authorities in late March 2009.
   
    

Copyright 2010 Fred L. Abrams

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An alleged Guatemalan drug lord and Peter Madoff are the subjects of the May 26th "Asset Search News Roundup":

"Suing Peter Madoff For Bernard Madoff's Securities Fraud" described plaintiffs' summary judgment motion pending against Peter Madoff in The Lautenberg Foundation v. Madoff, 09-Civ-00816.  Pages 8-10 of a May 20th reply memorandum shows that the Madoff plaintiffs are relying heavily on their claim that Peter Madoff was liable as a "control person".   
 

U.S. Treasury's Office of Foreign Assets Control recently added Waldemar Lorenzana Lima to its list of Specially Designated Narcotics Traffickers under the Foreign Narcotics Kingpin Designation Act.  A press release characterizes Mr. Lorenzana as a Guatemalan drug lord with ties to Mexico's Sinaloa narco-traffickers.  The instant Treasury designation freezes any of Mr. Lorenzana's assets subject to U.S. jurisdiction.  The image which follows, depicts Mr. Lorenzana's alleged trafficking organization.

Image: U.S. Treasury's Office of Foreign Assets Control

Copyright Fred L. Abrams 2010

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Today's "Asset Search News Roundup" discusses my next speaking engagement and asset forfeiture:
 

• At the New York County Lawyers' Association, 14 Vesey Street, New York City, on May 25, 2010, I will present "Ethically Accessing Financial Intelligence From Warsaw To Wilmington, In Criminal & Civil Cases".  It examines the financial fraud investigations of Ponzi schemer Trevor Cook, Former Premier Michael Misick of the Turks & Caicos Islands and some others.  A complete description of the program / registration information is available here.
  
   
• A May 13, 2010 article in The Saint Paul Legal Ledger - Capitol Report mentions that Representative Tina Liebling of the Minnesota House of Representatives seeks change in state asset forfeiture laws.  According to the May 13th article, Representative Liebling favors asset seizure during a police investigation, but opposes asset forfeiture absent a criminal conviction.
  
   
• My post "Seizing Assets In A Suspected Racial Profiling Scheme?", explained that the plaintiffs in James Morrow et. al. v. City of Tenaha Deputy City Marshal Barry Washington et. al., claimed they had been subjected to improper seizures or forfeitures.  This past February 19th, the Court permitted the Morrow plaintiffs to file their third amended complaint, as revealed by the Morrow docket report.

Copyright 2010 Fred L. Abrams

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The May 12th "Asset Search News Roundup" talks about both whistleblower awards and hiding assets in informal banking systems:

1. Ten days ago I had the pleasure of meeting a noted colleague, attorney Jack Blum.  Among Mr. Blum's high-profile clients are whistleblowers Rudolf Elmer and Heinrich Kieber, who are respectively described at "Julius Baer whistleblower cites Swiss tax edge" & "Americans Seeking Reward Money Inform IRS on Others".  Mr. Blum especially emphasized in one of our conversations, that whistleblower awards can be a most effective countermeasure against tax fraud and other financial frauds.
    
2. Informal banking systems, (a.k.a. alternative remittance systems), may be used by terrorists and anyone else hiding assets.  As shown below by the money laundering typology from the Egmont Group of Financial Intelligence Units, hawala is one of these informal banking systems.

Typology / Case# 06060: Courtesy of The Egmont Group

Copyright 2010 Fred L. Abrams

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Concealing assets through yachts / aircraft and the 2010 Bank Secrecy Act / Anti-Money Laundering Examination Manual are on the radar in this "Asset Search News Roundup":

• Beneficial owners sometimes fraudulently conceal their assets by secretly purchasing a valuable yacht or aircraft.  They may then establish a Delaware or other shell company and use a nominee director to register the yacht or aircraft with anonymity.  Asset Managing Group, Inc. offers a yacht / aircraft registration service via Delaware corporations with nominee directors.
   
• The Federal Financial Institutions Examination Council has released the 2010 edition of the Bank Secrecy Act / Anti-Money Laundering Examination Manual.  Its indicia or "red flags" of money laundering are listed at Appendix F:
   

Copyright 2010 Fred L. Abrams

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Holocaust-era assets and securities fraudster Trevor Cook are the focus of this week's "Asset Search News Roundup":
 

1. An April 21, 2010 Bloomberg.com article explained that Berlin's Free University went live with its website about Holocaust-era assets / "degenerate" art confiscated by the Nazis.  "During A War Everybody Loots A Little Bit", earlier mentioned that as much as 20 percent of Europe's art is thought to have been looted by the Nazis.
   
    
2. At "Hopes of cash stash dashed in Minneapolis money manager Trevor Cook case", the Minneapolis Star Tribune reported about a failed meeting between securities fraudster Trevor Cook and Cook Receiver R.J. Zayed.  As explained by "Interdicting A Ponzi Schemer's Assets", Receiver Zayed is trying to recover Cook Receivership assets.  The Receiver's comments about his meeting with Mr. Cook, can be read below.

 

 

Copyright 2010 Fred L. Abrams

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This "Asset Search News Roundup" concentrates on an alleged $45 million dollar tax fraud and the conviction of Mr. Dennis Hecker's girlfriend, Christi Michele Rowan:

• An April 15th press release explained that property developers Mauricio Cohen Assor and his son, Leon Cohen-Levy are accused of hiding $45 million from the IRS by using nominees to maintain domestic and foreign bank accounts.  "2 Charged in International Tax Evasion Scheme Said To Involve HSBC" discussed the two but wrote that their supposed scheme was thought to have been aided by Swiss lawyers, shell companies and foreign accounts at HSBC.  "A Doctor, A Lawyer & Bricks Of Cash In Switzerland" reported on another case in which assets may have been hidden at HSBC during a tax fraud.

• I brought up Mr. Dennis Hecker at my January 9th and February 14th "Asset Search News Roundups" & in "Has Auto Magnate Dennis Hecker Hidden His Assets?"   An April 21, 2010 Minneapolis Star Tribune article advised that Mr. Hecker's girlfriend Christi Michele Rowan, pleaded guilty to bankruptcy fraud and bank fraud charges.   Ms. Rowan was specifically convicted of making false statements in Mr. Hecker's bankruptcy case and for lying on a federal loan application for a 2008 Land Rover vehicle.  The underlying information filed in her criminal case is shown below and can be completely viewed by clicking here.
   

 Copyright 2010 Fred L. Abrams

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The guilty plea of Minneapolis money manager Trevor Cook and the Court's dismissal of a Wisconsin lawsuit against Associated Bank, are mentioned by today's "Asset Search News Roundup":

* At a plea hearing that took 33 minutes yesterday, Trevor Cook pleaded guilty to counts one and two of his of his criminal information.  At that time, Mr. Cook was convicted of violating 18 U.S.C. §1341 (mail fraud) and 26 U.S.C. §7201 (tax fraud.).  A press release described Mr. Cook's plea agreement and the securities fraud / Ponzi scheme he had caused.

* "Associated Bank Sued For Supposedly Ignoring Red Flags" examined a Wisconsin lawsuit claiming anti-money laundering regulations had been violated.  That same lawsuit was dismissed one week ago, as reported by "Judge dismisses lawsuit against Associated Bank".  My April 10, 2010 post was about a similar lawsuit brought against Wachovia.   

 Copyright 2010 Fred L. Abrams

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The April 8th "Asset Search News Roundup" comments on both a revised OECD-Council of Europe tax treaty and a contested provenance case brought to recover an ancient gold tablet:

1. An April 6th press release announced that the OECD and Council of Europe are updating a treaty aimed at helping governments fight cross-border tax evasion.  The press release states: "[t]his will enable developing countries to become parties to the amended convention and benefit from the new, more transparent tax-cooperation environment."
   
    
2. Berlin's Vorderasiatisches Museum lost the contested provenance case it brought to recover a small gold tablet which dates to the reign of the Assyrian King Tukulti-Ninurta I.  The ancient tablet had allegedly gone missing from a national Berlin museum at the conclusion of World War II.
    

As more fully set forth in a March 30, 2010 Nassau County N.Y. Surrogate's decision, the Vorderasiatisches Museum could not recover the tablet from the estate of Riven Flamenbaum because of the doctrine of laches.  The late Mr. Flamenbaum had been a holocaust survivor and reportedly maintained the tablet in his Great Neck, New York safety deposit box.

Copyright 2010 Fred L. Abrams

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Prime Minister Silvio Berlusconi of Italy and the Egmont Group of Financial Intelligence Units are featured in the March 31st "Asset Search News Roundup":
 

• As mentioned on March 10th by "Italy: Law to Protect Berlusconi in Court", Prime Minister Berlusconi's anticipated public corruption trials have been delayed.  "It Didn't Work for The Beatles, Either" had meanwhile, earlier reported that the Prime Minister once said: "I am the Jesus Christ of politics. I sacrifice myself for everyone."
   

• The Egmont Group publishes money laundering typologies at its website's "Library".  The following typology describes how drug traffickers and / or organized criminals used multiple jurisdictions and shell companies to launder assets:
  
  
  

Money Laundering Typology Courtesy of The Egmont Group

Copyright 2010 Fred L. Abrams

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Today's "Asset Search News Roundup" reports on "Operation Illegal Motion" and describes the recovery of a 3,000-year-old sarcophagus:

1. A press release mentions that Robert L. Stevens of Baton Rouge, Louisiana, was the 10th person criminally charged as a result of "Operation Illegal Motion".  Operation Illegal Motion is a public corruption probe of the criminal court system of East Baton Rouge Parish.  So far the probe has resulted in the convictions of two former police officers, the former chief investigator for a public defender’s office, former court employees and others.
   
    
2. On March 10, 2010 U.S. authorities returned a 3,000-year-old sarcophagus to the Supreme Council of Antiquities of Egypt's Ministry of Culture.  The 21st Dynasty sarcophagus was interdicted at Miami International Airport in 2008 and subsequently forfeited.  Its exporter in Spain could not provide proper provenance and the sarcophagus is presumed to have been stolen.

Photo: U.S. Immigration and Customs Enforcement

Copyright 2010 Fred L. Abrams

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The March 14, 2010 "Asset Search News Roundup" first highlights ex-Detroit councilwoman Monica Conyers and then mentions Madoff Trustee Irving Picard:

*As The Wall Street Journal described at "House Judiciary Chairman’s Wife Sentenced to Prison" and "Lawmaker's Wife Sentenced to Jail", ex-councilwoman Monica Conyers was sentenced to 37 months of prison for her public corruption scheme.  "Public Corruption Charges Against Two Politically Exposed Persons", was the last time I discussed Ms. Conyers.  

*Yesterday's post "Mr. Cook Continues His Incarceration For Civil Contempt", recounted that Madoff Trustee Irving Picard had pursued forced collection proceedings in multiple jurisdictions.  "U.S. judge backs Madoff trustee's claims method", recently reported on a separate issue involving Trustee Picard-- a controversy stemming from his valuation of investor's claims.  Trustee Picard's efforts to recover assets through clawback claims in the Madoff case has also been debated by some. 

Copyright 2010 Fred L. Abrams

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This "Asset Search News Roundup" focuses on "politically exposed persons", some of whom would launder corruption monies.

1. "Stolen Asset Recovery: Politically Exposed Persons, A Policy Paper On Strengthening Preventative Measures" was published in 2009 and it is available at the Stolen Asset Recovery Initiative's website.  The 2009 policy paper stated at page 17: "[I]f, as the World bank suggests, $1 trillion of corruption money is moving around the world each year, where is it? ....the money must be moving undetected through the banks and intermediaries and the current systems are failing to detect it". 
   
    
2. The Senate's permanent subcommittee on investigations held a hearing on February 4, 2010 about politically exposed persons from abroad hiding corruption monies in the United States.  At this hearing, the investigations subcommittee released its 330-page report "Keeping Foreign Corruption Out Of The United States: Four Case Studies".  A news release mentioning the hearing explained: "...that politically powerful foreign officials, and those close to them, have found ways to use the U.S. financial system to protect and enhance their ill-gotten gains".  

Copyright 2010 Fred L. Abrams

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"A Strategy Of Seizing Sinaloa Drug Cartel Assets" is about the U.S. Department of Justice's use of asset forfeiture against Mexico's drug cartels.  U.S. Treasury's Office of Foreign Assets Control ("OFAC") pursues this forfeiture policy alongside the Department of Justice.  As explained by my February 11, 2009 "Asset Search News Roundup", the OFAC can list drug traffickers as "Specially Designated Narcotics Traffickers". 

If a drug trafficker is placed on the "Specially Designated Narcotics Traffickers" list, than his / her assets subject to U.S. jurisdiction are frozen.  A February 25, 2010 press release reveals that the OFAC added seven supposed leaders of the La Familia Michoacana (La Familia) drug cartel, to the Specially Designated Narcotics Traffickers list.  These seven suspected La Familia leaders are depicted in an OFAC link chart:

Chart Courtesy of U.S. Treasury's OFAC

Copyright 2010 Fred L. Abrams

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Today's "Asset Search News Roundup" is about the New York case against the ex-president of Guatemala, Alfonso Portillo and it also mentions the sentencing of New York former top cop Bernard Kerik:

• The one-count indictment unsealed on January 26, 2010 in the case against ex-president Portillo is available here.  Mr. Portillo's indictment alleges that he embezzled monies in a public corruption scheme during his Guatemalan presidency.  According to his indictment, Mr. Portillo supposedly laundered illicit proceeds through multiple jurisdictions including: New York, Miami, Paris, Luxembourg and Switzerland.  He is specifically accused of violating 18 U.S.C. §1956 and the federal government is seeking asset forfeiture pursuant to 18 U.S.C. §982.
  
   
• As reported by Bloomberg.com on February 18, 2010, former NYPD Police Commissioner Bernard Kerik was sentenced to four years of prison for tax fraud and some of the other crimes described at "White-Collar Crime & A Former Top Cop".  The letter Mr. Kerik sent to the Court just prior to his sentencing is available here: 

 Copyright 2010 Fred L. Abrams

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This "Asset Search News Roundup" contains a copy of the indictment filed against Minneapolis auto magnate Dennis Hecker.  It also discusses the securities fraud complaints pending in New York against Bank of America.
 

1. A press release from the U.S. Department of Justice announced that Mr. Hecker was indicted last Wednesday for allegedly hiding his assets.  "Has Auto Magnate Dennis Hecker Hidden His Assets?"  had described a few of Mr. Hecker's supposed fraudulent financial transfers and explained that Mr. Hecker had reportedly been under criminal investigation.
   
   Mr. Hecker's seven-count indictment accused him of concealing assets through money laundering in violation of 18 U.S.C. §1957.  The indictment additionally charged Mr. Hecker with allegedly violating 18 U.S.C. §1343 (wire fraud) and 18 U.S.C. §1349 (conspiracy to commit wire fraud).
   
    
2. As an October 19, 2009 Amended Complaint and a January 12, 2010 Complaint demonstrate, the SEC had filed securities fraud complaints in New York against Bank of America.  These complaints were over alleged non-disclosure about Bank of America's merger with Merrill Lynch and / or year-end bonuses paid to Merrill Lynch employees.
   
   The February 12th article "Fork It Over: Rakoff Wants the Scoop on Why Bank of America Fired Its GC " reported that the Court is contemplating a settlement of these SEC complaints.  Said article explained that Bank of America was also just sued in connection with its Merrill Lynch merger, by New York Attorney General Andrew Cuomo.  The New York Attorney General's securities fraud suit can be viewed here. 

Copyright 2010 Fred L. Abrams

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The Wall Street Journal's February 4, 2010 article "Switzerland Freezes Freed Duvalier Assets", is about alleged illicit assets blocked in Switzerland.  The blocked assets have been maintained in Swiss bank accounts and are believed to originate from Haiti's public coffers.  These public coffers were reportedly looted by former politically exposed person Jean-Claude "Baby Doc" Duvalier, who fled Haiti in 1986. 

The Wall Street Journal article claims that foreign dictators no longer favor hiding assets at Swiss banks because of "tough" Swiss laws requiring banks to know the source of funds.  The Swiss laws the article seems to refer to are commonly called "customer identification" or "know your customer" rules.  Rules requiring banks to identify their customers have been adopted across the globe and are in effect in the United States, the United Kingdom, etc. 

Swiss banks specifically follow customer identification rules by requiring their customers to execute a "declaration of beneficial ownership" which is also known as a "Form A".  Swiss banks also routinely monitor customer accounts, consistent with international anti-money laundering standards.  A former Yale Law School visiting scholar discusses the use of "Form A's" and shares some of his views on Swiss banking, at "Customer Identification At UBS AG And Some Other Banks". 

 Copyright 2010 Fred L. Abrams

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The January 29th "Asset Search News Roundup" talks about HealthSouth's ex-chief Richard Scrushy and includes the most recent remarks of Assistant Secretary For Terrorist Financing David Cohen:

• "HealthSouth Founder Scrushy Is Acquitted of Fraud" explained  that Mr. Scrushy was acquitted in June of securities fraud and other criminal law violations.  Mr. Scrushy  was however, sentenced to prison in his separate bribery case.  HealthSouth shareholders were also awarded a $2.8 billion dollar judgment against Mr. Scrushy.  Some of the litigation by these shareholders / post-judgment creditors, is outlined at: "The Richard Scrushy asset search resumes".
  
   
• My post "Transnationally Tracking The Assets Of Terrorists", briefly referred to the funding of Al Qaeda terrorists.  Assistant Secretary For Terrorist Financing David Cohen just shared his thoughts about Al Qaeda, with the Council on Foreign Relations. To read the Assistant Secretary's remarks, click on the following image:
                 
  
  
  
  
    

Remarks Courtesy of U.S. Department of the Treasury.

 Copyright 2010 Fred L. Abrams

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Former Turks and Caicos premier Michael Misick is the subject of today's "Asset Search News Roundup".  The Former Premier is the ex-husband of U.S. actress and model LisaRaye McCoy and his pending New Jersey litigation is discussed at "Target Of Corruption Probe Sues Hip-Hoppers For Supposed Fraud" & "Could Former Premier Misick Face U.S. Forced Collection Proceedings?". 

The Former Premier is also a co-defendant in two civil complaints that are related to each other and have been removed from state court to Florida federal court.  Paragraphs 50-60 of the first complaint, accuses the Former Premier of possible involvement in a civil RICO scheme.  Paragraph 58 of the second complaint, alleges that the Former Premier might not have "implement[ed] appropriate supervisory methodologies" in connection with a supposed securities fraud / Ponzi scheme.  To access the two complaints, click on each of the images below:

   

 
Copyright 2010 Fred L. Abrams

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The Association of Certified Anti-Money Laundering Specialists is a private sector anti-money laundering credentialing organization and Colby Adams is a reporter affiliated with it.  Mr. Adams telephoned me this week to discuss my thoughts about abusive offshore tax avoidance schemes and The "John Doe" Summons Case, which was settled with UBS AG.

My comments on The "John Doe" Summons Case have just been published by MoneyLaundering.com / ComplianceAdvantage.com, as part of Mr. Adams' article, "Nearly a Year into Bank Secrecy Crack Down, Little Progress Seen": 

*"Nearly a Year into Bank Secrecy Crack Down, Little Progress Seen", Copyright 2010 Alert Global Media, reprinted with permission.

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The January 9th "Asset Search News Roundup" provides an update on a couple of matters from Minnesota:

1. Both "Money Laundering By Minneapolis Managers?" and "Associated Bank Sued For Supposedly Ignoring Red Flags" described pending civil complaints against suspected securities fraudsters Trevor Cook, Patrick Kiley and their companies.  Another complaint filed against them was commenced on November 23, 2009, in Minnesota by the U.S. Commodity Futures Trading Commission.  Click here, to view the November 23rd complaint.
   
    
2. My October 20, 2009, article "Has Auto Magnate Dennis Hecker Hidden His Assets?" discussed Mr. Hecker's bankruptcy and divorce proceedings in Minnesota.  On January 6, 2010 "Judge's patience with Hecker runs out", reported that Mr. Hecker had delayed discovery sought by bankruptcy creditor Chrysler Financial.
   
   The delay was apparently caused by Mr. Hecker's claim that he was somehow entitled to Fifth Amendment protection against self-incrimination, in his civil bankruptcy case.  As "Judge to Hecker: Repay or go to jail" stated, Mr. Hecker also reportedly "looted" $125,000 which was the subject of his now finalized Hennepin County divorce proceeding.

Copyright 2010 Fred L. Abrams

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The "Asset Search News Roundup: January 26, 2009 " mentioned that Heartland Payment Systems was subjected to what might have been the biggest credit / debit card information theft in the U.S.  Mr. Albert Gonzalez was ultimately indicted for that privacy law violation / computer intrusion and other ones.  In fact, Mr. Gonzalez pleaded guilty to criminal charges respectively brought in New Jersey, New York and Massachusetts. 

As "Using Foreign Computer Evidence Against An Accused Hacker" indicated, Mr. Gonzalez had initially been accused of using multiple jurisdictions / cross-border elements to facilitate computer hacking, identity theft and money laundering.  A December 29th Department of Justice press release also apparently indicated that Mr. Gonzalez had used cross-border elements to commit his crimes. 

According to the December 29th press release, Mr. Gonzalez was an "international hacker" convicted because of "coordination across....geographical lines".  Page 7 paragraph (1) (c) of a November 20, 2009 plea agreement additionally suggests that Mr. Gonzalez used cross-border elements in his crimes.  It stated that he had leased or controlled computer servers in Latvia and Ukraine:

Copyright 2010 Fred L. Abrams

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Today"s "Asset Search News Roundup" highlights hiding / smuggling cash at U.S.-Mexican border crossings and describes how fraudsters might select bank accounts to facilitate their financial frauds:

• On December 14, 2009 federal agents reportedly seized $300,000 in undeclared currency at a U.S.- Mexican border crossing in Arizona.  The $300,000 was allegedly hidden / smuggled in a suitcase in a vehicle occupied by two residents from Sonora, Mexico.
  
  The previous day, federal agents at a different border crossing in Arizona had seized $70,000 dollars possessed by another person from Sonora, Mexico.  According to a U.S. Customs and Border Patrol press release, the $70,000 was hidden in this spare tire of a 2008 Chevrolet Cheyenne: 

• "Concealing Cash By Laundering In Lithuania", mentioned two international gang members who were the subject of the Baltic Times article "Money Laundering Gang Detained".  These gang members had supposedly targeted bank accounts with no financial activity and then allegedly hijacked them for use as laundering links in a money laundering circuit.
  
  Others facilitate their financial frauds by contrarily selecting bank accounts which have lots of financial activity.  A December 15, 2009 press release explains that Lone Star National Bank former vice president Emma Vigil was convicted of bank fraud for her embezzlement.  Ms. Vigil had concealed the embezzlement at Lone Star National Bank by targeting customers who had "high balance and high activity accounts". 
   

Copyright 2009 Fred L. Abrams

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Holocaust-era assets and Mutual Legal Assistance Treaties are the subjects of this "Asset Search News Roundup":

1. My article "During A War Everybody Loots A Little Bit", discusses Nazi-looted art.  A December 1, 2009, press release also raises this issue.  The December press release explains that U.S. authorities recently recovered a painting in a Holocaust-era assets case.  The "Jeune Fille à la Robe Bleue" painting depicted below, had been looted from a Jewish family that fled Belgium during WWII.  A Long Island, N.Y. gallery owner ultimately cooperated in the painting's forfeiture.
   
   
   
   Image: U.S. Immigration and Customs Enforcement
    
   
2. Mutual Legal Assistance Treaties are sometimes used to locate assets that are parked or hidden offshore.  A Swiss prosecutor proceeded in Florida last month under such a treaty in The Matter of Jarred Kaplan, 2:09-mc-00040-UA-DNF.  As outlined by a memorandum of law, the prosecutor sought to interview a possible witness in Florida pursuant to The Treaty for Mutual Assistance in Criminal Matters, May 25, 1973, United States-Switzerland, 27 U.S.T. 2019, T.I.A.S. 8302.  This suspected witness was believed to be related to the purchase of a watch stolen from Watchmaker's Watch Center in Lugano, Switzerland on September 11, 2008.

Copyright 2009 Fred L. Abrams

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Attorney Arienne Irving's December 4, 2009 Judgment of Acquittal pursuant to Fed. R. Crim. P. 29, raises the general issue of lawyers or clients who might use illegal eavesdropping equipment to "research" an adversary.  I previously wrote about violating privacy laws via eavesdropping at "Attorney Christensen's Wiretap Conviction".  That article explained how former attorney Terry Christensen had, (while representing billionaire husband Kirk Kerkorian), conspired to eavesdrop on a wife's telephone conversations.

In Ms. Irving's case, she and Attorney Robert Simels were indicted for suspected witness tampering and for allegedly possessing and shipping illegal eavesdropping equipment in derogation of 18 U.S.C. §§2512 (1) (a) & (b).  According to a DEA press release, a client of Mr. Simels and Ms. Irving had earlier used this eavesdropping equipment in Guyana to research or "target" apparent adversaries, some of whom were later murdered. 

As set forth in my "Asset Search News Roundup" for September 10, 2009, a jury returned a guilty verdict against Mr. Simels and he was sentenced to 168 months of prison.  Despite the same trial jury reaching the guilty verdict below regarding Ms. Irving, the Court acquitted her as previously mentioned.

 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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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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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 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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On the radar this week is: former Police Commissioner Bernard Kerik's guilty plea and following the money trail to Canada.

• After I wrote "Bernard Kerik Is Jailed While His Trial Is Delayed", the former police commissioner pleaded guilty to hiding assets in a tax fraud and public corruption charges.  The details of Mr. Kerik's November 5, 2009 guilty plea are described by Reuters in "Ex-head of NY police pleads guilty to corruption".  His sentencing before U.S. District Court Judge Stephen Robinson, is set for February 18, 2010.

• My October 29th "Asset Search News Roundup" named Switzerland, Panama, Costa Rica and the United Kingdom as jurisdictions which could have been used by some Minneapolis money managers to launder the proceeds of a suspected securities fraud. 

Following the money trail of this suspected securities fraud appears to have also led to Canada, as explained by the article "$300 million Oxford trail leads into Canada". 

Perhaps most notable, is that each one of the above-mentioned locations is generally considered by financial investigators to be a high-risk geographical location.  This means that a nexus to any one of them, can be a red flag for money laundering. 

 Copyright 2009 Fred L. Abrams

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The October 22, 2008 "Asset Search News Roundup" mentioned the problem of money launderers concealing assets through money mules.  The Federal Deposit Insurance Corporation issued its own alert last week about this same use of money mules:

A money mule making a wire transfer can however, be especially vulnerable to detection.  This is true because at the time of a wire transfer, financial institutions and governmental authorities can search for "red flags".  Thirteen of these red flags are identified by "Money Laundering Red Flags, Wire Transfers", which is from the BSA / AML Examination Manual published by the U.S. government's Federal Financial Institutions Examination Council.

Copyright 2009 Fred L. Abrams

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This "Asset Search News Roundup" is about the clawback claim filed against the late billionaire Jeffrey Picower and hiding assets by laundering them through multiple jurisdictions:

• "Madoff friend drowned due to heart attack" reported that on October 25, 2009 billionaire Jeffrey Picower died because of a heart attack and accidental drowning in a swimming pool at his Palm Beach home.  The late Mr. Picower was sued for at least $5 billion by Madoff trustee Irving Picard in the adversary proceeding available here.  The Madoff trustee sought "clawback" of the $5 billion because it was alleged to be an investor's profit from the Madoff Ponzi scheme.  Reuters meanwhile explained in "Madoff trustee ups claim against investor Picower", that this claim against Mr. Picower could have been raised to $7.2 billion.

• In "Feds had early clues in currency case" the Star Tribune mentioned Minneapolis money managers Pat Kiley and Trevor Cook.  They are among those being sued for the suspected securities fraud I described at "Money Laundering By Minneapolis Money Managers?". 

I discussed this possible fraud again in my October 11th "Asset Search News Roundup".  As my October 11th Roundup explained, proceeds from the alleged fraud might possibly have been laundered in Switzerland, Panama, Costa Rica and the United Kingdom.   

If any criminal proceeds were actually transferred through these countries, then laundering through multiple jurisdictions may have occurred.  I refer to laundering through multiple jurisdictions and other asset concealment methods at my article: "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy".

Copyright 2009 Fred L. Abrams

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A U.S. Army Sergeant pleads guilty to taking bribes, then trying to conceal them in a money laundering conspiracy and $32.8 million in U.S. currency is interdicted because of "Project Coronado":

 *A U.S. Department of Justice press release describes the conviction of Army Sergeant Ana C. Chavez for a public corruption scheme which had bribery and money laundering components.  The Sergeant pleaded guilty on October 20, 2009 to taking $90,000 in bribe monies and trying to hide them in U.S. bank accounts through a money laundering conspiracy.  I already wrote about these kinds of public corruption schemes at: "Army Major Arrested For Money Laundering" and "Second Army Major Guilty Of Bribery".

*Another press release states that Project Coronado netted $32.8 million in suspected drug-related currency along with 11.7 tons of drugs.  Project Coronado resulted in almost 1200 arrests and focused on La Familia Michoacán, which is reportedly the most violent of Mexico's five drug cartels.  On April 15, 2009  La Familia Michoacán was placed on U.S. Treasury's Specially Designated Nationals List pursuant to the Kingpin Act.  This designation freezes any La Familia assets subject to U.S. jurisdiction, as described by my February 11, 2009 "Asset Search News Roundup".  Finally multiple cities were involved in Project Coronado:

Map Courtesy Of: U.S. Drug Enforcement Administration

Copyright 2009 Fred L. Abrams

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Holocaust-era assets and drug-related assets are both covered by this "Asset Search News Roundup": 

*My article "Searching For Nazi-Looted Art" described the Holocaust-era assets / contested provenance case of Bakalar v. Vavra, Index No. 05-CV-3037 (S.D.N.Y.).  The trial court in Bakalar rejected the claim that Egon Schiele's "Seated Woman With Bent Left Leg (Torso)" was Nazi-looted art ransacked during the Holocaust from Austrian-Jewish entertainer Fritz Grunbaum.  Bakalar, is now on appeal in the Second Circuit of the U.S. Court of Appeals and there was an oral argument in it on October 9, 2009.

 **"Interdicting The Assets Of Mexico's Narco-Traffickers" included a U.S. Treasury Office of Foreign Assets Control link chart and press release from October 2008.  This link chart and press release basically indicated that Telesforo Baltazar Tirado Escamilla was subject to sanctions under the Foreign Narcotics Kingpin Designation Act (21 U.S.C. § 1901-1908, 8 U.S.C. § 1182) and Executive Order 12978 of October 21, 1995.

Telesforo Baltazar Tirado Escamilla was sanctioned for supposedly using his "Productos Farmaceuticos Collins" company to supply the Mexican narco-trafficking Amezcua Contreras Organization with the precursor materials for methamphetamine production.

The Office of Foreign Assets Control recently claimed via its September 2009 link chart and press release, that Telesforo Baltazar Tirado Escamilla had attempted to evade the sanctions.  He is accused of evading the sanctions by using "key front individuals", as the September 2009 link chart reveals:

Link Chart: U.S. Treasury Office Of Foreign Assets Control

Copyright 2009 Fred L. Abrams

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The October 11th Asset Search News Roundup describes what could have been the use of cross-border elements to launder the proceeds of a securities fraud.  The interdiction of $41 million from bulk cash smuggling in Mexico and Colombia, is also discussed.

• The "Money Laundering FAQ" webpage belonging to the Financial Action Task Force states that: "Large-scale money laundering schemes invariably contain cross-border elements".  Cross-border elements may have existed in the suspected securities fraud case mentioned at "Money Laundering By Minneapolis Money Managers?".

In that case, (known as Philips v. Cook, 09-cv-01732), proceeds from an alleged securities fraud might have been laundered across international borders and transferred into Switzerland, Panama, Costa Rica and the United Kingdom.  "Investors fear money went south -- to Panama", mentioned these particular cross-border elements in connection with the Phillips case.

• Bulk cash and other smuggling continues even though cargo containers can be screened by X-ray and gamma ray machines and radiation detection devices at ports like the one in Cartagena, depicted below. This past September, $41 million in U.S. currency was interdicted from bulk cash smugglers who had used cargo containers. 

A press release states that the $41 million was hidden in the cargo containers at Colombian and Mexican ports.   Other articles herein about smuggling cash include: "Concealing Assets By Smuggling Cash", "Smuggling Cash Across Iraq's Border" and "A Yola, A Police Sergeant & A Restauranteur".

Picture: U.S. Customs and Border Protection

Copyright 2009 Fred L. Abrams

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In this "Asset Search News Roundup", I mention that 90 tax information exchange agreements have been executed since April and talk about the $198 million dollar lawsuit filed last Friday:

• Due to the existence of tax information exchange agreements executed by different countries, a national tax authority could conceivably learn that a taxpayer has concealed assets in an abusive offshore tax avoidance scheme.  A September 25, 2009 OECD press release stated that since April, there have been ninety new tax information exchange agreements along with 60 new or renewed tax treaties.  Examples of these kinds of agreements are "the Avoidance of Double Taxation Treaty" and "the January 23, 2003 Mutual Agreement", between the U.S. and Switzerland.

• The $198 million dollar lawsuit referred to at my last "Asset Search News Roundup", (against Bernard Madoff's brother, two sons and a niece), is reproduced below.  This lawsuit was commenced by Madoff trustee Irving Picard to recover assets which may have been dissipated during Bernard Madoff's Ponzi scheme.  It was filed last Friday pursuant to  the Securities Investors Protection Act and other statutes, including those listed in my September 4, 2009 article about "clawback" claims in bankruptcy court.  

Copyright 2009 Fred L. Abrams

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A September 27th article explained that Madoff trustee Irving Picard will sue Bernard Madoff's brother, sons and a niece this week for $198 million dollars.  Trustee Picard could assert causes of action in the suit for: negligence, breach of fiduciary duty and possibly unjust enrichment.  He will be filing suit because he seeks to interdict assets and then equally distribute them to defrauded Madoff investors, as contemplated by the Securities Investor Protection Act.

The $198 million dollar suit is however, just one of the steps trustee Picard is taking to recover assets on behalf of defrauded Madoff investors.  Trustee Picard for instance, retained the corporate financial consulting company FTI on December 30, 2008.  A May 5, 2009 affidavit indicates that FTI is basically conducting a financial fraud investigation on behalf of the trustee, regarding the assets of Bernard L. Madoff Investment Securities, LLC.

As described at the August 5, 2009 "Asset Search News Roundup", trustee Picard is also trying to recover assets by suing Ruth Madoff for $45 million dollars.  He brought the suit under the United States Bankruptcy Code (title 11, United States Code) and New York State's version of the Fraudulent Conveyance Act, codified at N.Y. Debt. & Cred. Law §§270-281.  Trustee Picard has similarly used some of these laws as a basis for the "clawback" lawsuits against the Madoff investors described by my "Asset Search News Roundup" from September 4, 2009.

In these clawback suits, investors' profits from Madoff's Ponzi scheme are deemed presumptively fraudulent and can be subject to a turnover order.  Meanwhile, an alleged 82-year-old former Madoff investor filed a letter about clawback with the Bankruptcy Court.  The letter, (redacted below for privacy reasons), claims that this investor would be forced into bankruptcy, if clawback is ultimately applied to him: 

  Copyright 2009 Fred L. Abrams

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The September 23rd "Asset Search News Roundup" first discusses the importance of international cooperation, especially when assets are concealed by money laundering in multiple jurisdictions.  It then mentions how U.S. and Chinese authorities cooperated to recover cultural relics including dinosaur fossils from as early as 100 million years ago.

+An offshore asset search can sometimes require the use of letters rogatory or the other formal methods of international cooperation listed in "Eliciting Evidence From Foreign Bank Witnesses".  This kind of international cooperation is an essential element in the fight against money laundering in multiple jurisdictions.

This is of course recognized by Mr. Paul Vlaanderen, who is the president of the leading transnational anti-money laundering organization, the Financial Action Task Force.  As Mr. Vlaanderen stated during his August 21, 2009 speech in Lesotho: "Some jurisdictions expose us all to unacceptable risk by failing to implement effective AML/CFT [anti-money laundering / counter-terrorist financing] systems".

++Ten days ago, U.S. officials turned over to China cultural relics including the partial dinosaur skull pictured below.  Some of these relics were from as early as 100 million years ago.  As reported by "US turns over seized prehistoric relics to China", the relics were contraband and had been recovered because of U.S.- Chinese cooperation.  The Ministry of Land and Resources in China had apparently sought the relics which had been interdicted in Richmond, Virginia and at the Chicago O'Hare International Mail Facility. 

 Copyright 2009 Fred L. Abrams

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The criminal conviction of former Taiwanese President Chen Shui-bian; the death of suspected Ponzi schemer Danny Pang; and the dismissal of a Holocaust-era assets case; are the subjects of this week's "Asset Search News Roundup":

•  Former Taiwanese President Chen Shui-bian's arrest was discussed in the November 19, 2008 "Asset Search News Roundup".  As the New York Times and / or the BBC reported, former President Chen Shui-ban has now been convicted of public corruption charges and for hiding monies by laundering them through foreign financial accounts in Switzerland.

• "No apparent foul play in financier Pang's death" from Reuters, provided information about the circumstances of Mr. Danny Pang's death.  As my May 4, 2009 "Asset Search News Roundup" explained, Mr. Danny Pang had been arrested for the suspected structuring of deposits, in violation of 31 U.S.C. §5324.  He was additionally accused of defrauding investors out of hundreds of millions during a Ponzi-like securities fraud.

• On August 11, 2009 a New York appellate court decided Schoeps v Andrew Lloyd Webber Art Found. (2009 NY Slip Op 06155).  The August 11th decision, affirmed the trial court's dismissal of the Holocaust-era art restitution claim brought by Mr. Schoeps in Schoeps v Andrew Lloyd Webber Art Found. (2007 NY Slip Op 52183 {U}). 

Raymond Dowd, Esq. who spoke at the June 2009 Holocaust Era Assets Conference in Prague, analyzed the August 11th decision in "German and Other Foreign Heirs in New York: Standing To Sue Clarified In Andrew Lloyd Weber Picasso Case". 

As my April 30, 2009 article "Holocaust-Era Art Restitution Revisited" stated, Mr. Schoeps was also a party to another art restitution case.  In Schoeps v. The Museum of Modern Art, et. al., Index No. 1-07-CV-11074, Mr. Schoeps had argued that he was entitled to restitution of the two Picassos, “Boy Leading a Horse” & “Le Moulin de la Galette”.

Copyright 2009 Fred L. Abrams

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This "Asset Search News Roundup" is about two New York criminal defense attorneys who among other things, were accused of violating privacy law by possessing illegal eavesdropping equipment.  On August 20, 2009, attorneys Robert Simels and Arienne Irving were found guilty of importing and possessing illegal eavesdropping equipment in violation of 18 U.S.C. §§2512 (1) (a) & (b). 

Ms. Irving was eventually acquitted of all criminal charges on December 4, 2009 and a U.S. Attorney's press release mentions that Mr. Simels was sentenced to 168 months of prison.  Mr. Simels' jury verdict sheet additionally reveals that he was convicted of several witness tampering charges along with the bribery charge outlined by his July 10, 2009 superseding indictment.  He had apparently committed these crimes in connection with his representation of Mr. Shaheed Khan in a federal criminal case. 

An August 20, 2009 Drug Enforcement Administration press release called Mr. Khan a drug kingpin and claimed that Mr. Simels and Ms. Irving had imported the illegal eavesdropping equipment from Guyana, where Mr. Khan had used it.  My next article will again mention U.S. privacy law.  This upcoming article is called "Violating Federal Law In An Asset Search".  It describes how a private detective may have conspired to illegally access customer account information maintained at a U.S. bank.

(Edited December 12, 2009)

Copyright 2009 Fred L. Abrams

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I discussed "clawback" in my July 18, 2009 "Asset Search News Roundup" as well as in "Clawback Caused By A Ponzi Scheme".  These articles explained that assets may be recovered by clawback which can force an investor to return presumptively fraudulent profits, as mentioned by In re: Bayou Group LLC, et. al., 396 B.R. 810 (Bkrtcy S.D.N.Y. 2008).

The September 1, 2009 article "Madoff Liquidator May ‘Claw Back’ Charities’ Profits" similarly talks about clawback.  It explained that SIPC trustee Irving Picard may file a new round of clawback claims to recover assets dissipated during Bernard Madoff's Ponzi scheme.  If filed as adversary proceeding complaints in bankruptcy court, trustee Picard's new clawback claims would probably be based on:

1. 11 U.S.C. §542 (Turnover of property)
2. 11 U.S.C. §544 (Trustee as lien creditor)
3. 11 U.S.C. §547 (Preferences)
4. 11 U.S.C. §548  (Fraudulent transfers and obligations)
5. 11 U.S.C. §550 (Liability of transferee of avoided transfer)
6. 11 U.S.C. §551 (Automatic preservation of avoided transfer)
7. N.Y. Debtor Creditor Law §§270 et. seq.

Trustee Picard's effort to recover assets through clawback claims in the Madoff case, has already included his filing of these two adversary proceeding complaints:

 Copyright 2009 Fred L. Abrams

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The "Asset Search News Roundup" for this week focuses on the $1 billion asset forfeiture claim U.S. prosecutors brought against former Stanford Group CFO James F. Davis.  This $1 billion dollar claim was initially in the June 18, 2009 criminal information filed against Mr. Davis in U.S.A. v. Davis 4:09−cr−00335−1.  The information claimed that Mr. Davis had participated in the same multi-billion dollar Ponzi scheme Allen Stanford is accused of.

On August 27th Mr. Davis pleaded guilty to the fraud and obstruction charges part of his information.  At that time he consented to the forfeiture of up to $1 billion dollars in assets, as mentioned by the Court's Agreed Order of Forfeiture.  Furthermore, the last paragraph of a U.S. Department of Justice press release indicates that the case apparently involves global asset forfeiture, with assets being sought in Canada, the United Kingdom, Switzerland, etc.

"Pursuing Forced Collection Proceedings Against A Fraudster Like Madoff", described a financial fraud case in which Geneva counsel sought to interdict illicit assets in both Switzerland and the U.S.  That case demonstrates the compelling fact that forfeiting / seizing illicit assets in Switzerland may be easier than in the U.S.  This is so because Switzerland has a lower legal threshold for seizing illicit assets, than respectively exists in the U.S.

Copyright 2009 Fred L. Abrams

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My August 17th "Asset Search News Roundup" referred to the settlement of the case over the "John Doe" summons served on UBS in Miami.  As more fully discussed at "UBS & Its John Doe Summons", the IRS had brought the case to identify U.S. tax cheats who concealed their UBS bank accounts in abusive offshore tax avoidance schemes. 

The agreements settling the case are: the U.S. & Swiss Government Settlement, dated August 19, 2009 and the UBS Settlement With Consent To Public Disclosure.  Pursuant to the settlement, UBS is expected to supply the IRS with bank customer information belonging to about 4,450 suspected U.S. tax cheats.  UBS will also send the 4,450, (all of whom are believed to have secret Swiss bank accounts), this notice:

 

Furthermore, UBS is producing the customer information only under its tax treaties with the U.S., rather than the "John Doe" summons it was served with in Miami.  The first of these controlling agreements, is the October 2, 1996 "Avoidance of Double Taxation Treaty", described here.  The second is the January 23, 2003 Mutual Agreement, which clarified the earlier October 2, 1996 agreement.  These 1996 and 2003 tax treaties are examples of governmental authorities using formal cross-border cooperation, as described by my article: "Eliciting Evidence From Foreign Bank Witnesses".

 (Edited May 15, 2010)

Copyright 2009-2010 Fred L. Abrams

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The settlement of the UBS "John Doe" Summons case in Miami and U.S. Secretary of State Hillary Clinton's seven-nation tour of Africa, are covered by the August 17th "Asset Search News Roundup":

• The case described by "UBS & Its 'John Doe' Summons" settled last week, as revealed by the docket report in U.S.A. v. UBS AG, 1:09-cv-20423.  Although the details of the settlement were not yet released at the time of this writing, the Court issued its August 12th Order closing the case.

• The article "Hillary Clinton improves ties with Nigeria" discussed the public corruption problem / lack of transparency in Nigeria, while reporting about U.S. Secretary of State Hillary Clinton's seven-nation tour of Africa.  It cited Nigeria's poor ranking by the leading anti-bribery organization, Transparency International.  Transparency International annually ranks countries in its "Corruption Perception Index", as I explained in "White-Collar Crime & A Former Top Cop".

This past July, Transparency International also described public corruption in Kenya-- another country part of Secretary Clinton's seven-nation tour.  In July, Transparency International specifically labeled the Kenya Police as the most corrupt institution in all of East Africa, as indicated by my July 12, 2009 "Asset Search News Roundup".  Pictured below is Secretary Clinton at a town hall meeting in Kenya on August 6, 2009, during her seven-nation tour of Africa.

Copyright 2009 Fred L. Abrams

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The jury's August 5, 2009 verdict in U.S.A. v. Jefferson, found former congressman William Jefferson guilty of hiding bribery proceeds by laundering them, as described by the 12th, 13th and 14th counts of his indictment.  The August 5, 2009 verdict and a U.S. Department of Justice press release also state that Mr. Jefferson is guilty of soliciting bribes, honest services wire fraud, racketeering and conspiracy. 

An August 6, 2009 jury verdict similarly found that about $470,000 dollars in two bank accounts were criminal proceeds subject to asset forfeiture.  Under the August 6 verdict, stock shares in companies likely used as Mr. Jefferson's nominees, can be forfeited.  These stock shares are for a Nigerian company, "W2-IBBS"; a Ghanaian company, "International Broad Band Services, LLC"; a Delaware company, "Multi-Media Broad Band Services, Inc."; and a company in Indiana, "iGate, Incorporated".

As was previously reported by the media, investigators in U.S.A. v. Jefferson had interdicted $90,000 in a freezer on August 3, 2005, pursuant to a search warrant executed at Mr. Jefferson's Washington D.C. home.  A search warrant of Mr. Jefferson's congressional office had also been executed along with the one below for Mr. Jefferson's New Orleans home: 

A challenge prosecutors in U.S.A. v. Jefferson undoubtedly faced, was the fact that part of Mr. Jefferson's bribery scheme included cross-border elements in Nigeria, Ghana and other African countries.  To acquire evidence from foreign witnesses, prosecutors therefore sought relief in the form of mutual legal assistance and via letters rogatory.  These same methods are commonly used to obtain evidence from foreign bank witnesses and are discussed in my upcoming article, "Eliciting Evidence From Foreign Bank Witnesses".

Copyright 2009 Fred L. Abrams

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Bernard Madoff's wife Ruth, is featured in this week's "Asset Search News Roundup".  I explained in my June 27, 2009 post, "Will Ruth Madoff Keep Her Remaining $2.5 Million In Assets?", that Madoff trustee Irving Picard could file a viable lawsuit against Ruth Madoff.  Last week this actually happened, when trustee Picard filed his July 29 complaint in Irving H. Picard v. Ruth Madoff, Adversary Proceeding 09-01391, U.S. Bankruptcy Court for the Southern District of New York. 

The July 29 complaint seeks almost $45 million from Ruth Madoff under the Bankruptcy Code and New York State's version of the Fraudulent Conveyance Act codified at N.Y. Debt. & Cred. Law §§270-281.   The complaint asserts that Ruth Madoff was involved in fraudulent conveyances / was the wrongful transferee of assets from Bernard Madoff. 

To ultimately determine whether Ruth Madoff was a wrongful transferee, the Court will likely look for "badges of fraud", as explained by "Bernard Madoff & The Badges Of Fraud".  In analyzing any asset transfers to Ruth Madoff, the Court might particularly rely on Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (2d Cir. 1983).  According to Kaiser, the following can be badges of fraud in relation to an asset transfer:

(1) the lack or inadequacy of consideration;

(2) the family, friendship or close associate relationship between the parties;

(3) the retention of possession, benefit or use of the property in question;

(4) the financial condition of the party sought to be charged both before and after the transaction in question;

(5) the existence or cumulative effect of a pattern or series of transactions or course of conduct after the incurring of debt, onset of financial difficulties or pendency or threat of suits by creditors; and

(6) the general chronology of the events and transactions under inquiry. (Id.)
   

Copyright 2009 Fred L. Abrams 

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In my June 1, 2009 "Asset Search News Roundup" I wrote about how national tax authorities can enter into tax information exchange agreements.  The July 24, 2009 article "Tax Transparency Is Set To Increase", also discusses these agreements, which sometimes uncover offshore assets hidden in a tax fraud.  As "Tax Transparency Is Set To Increase" and the articles below suggest, there could be an emerging trend toward the execution of more tax information exchange agreements:

• "Ireland and Bermuda sign tax agreement"

• "Germany and Liechtenstein Agree on Tax-Exchange Arrangement"

• "Belgium Has 'Substantially Implemented' Tax Standard - OECD"

• "Guernsey signs New Zealand tax exchange deal"
   

Copyright 2009 Fred L. Abrams 

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"An Asset Search, Tax Fraud & Divorce" mentioned that Brian, (a former high-ranking official at the Financial Crimes Enforcement Network, who had earlier been an IRS special agent), said: "Once a tax fraud investigation starts rolling along, nobody knows where it may end up". 

Today's "Asset Search News Roundup" is similarly about the numerous individuals just arrested because a money laundering investigation ended up uncovering suspected public corruption crimes in New Jersey.  As yesterday's Department of Justice press release basically indicated, federal investigators had initially focused on some money laundering circuits.  In these money laundering circuits, five rabbis had supposedly washed monies by using charities; and / or a Brooklyn Bakery; and / or other  "cash houses".

Cash couriers, (whom I referenced in my April 13 2009 Asset Search News Roundup), also reportedly helped wash the monies across borders, between Israel and the United States.  The money laundering investigation however, eventually expanded and led to the arrests of three mayors, a deputy mayor, two assemblyman and many others, for suspected public corruption crimes in New Jersey.

Copyright 2009 Fred L. Abrams

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Attempts to recover assets connected to securities fraud are the subject of this "Asset Search News Roundup": 

• Pages 27-30 of trustee Irving Picard's July 9, 2009 report, outline some of the efforts to recover offshore assets related to Mr. Bernard Madoff's Ponzi scheme / securities fraud.  So far, Mr. Madoff's offshore assets have been identified in: Bermuda, England, France, Gibraltar, Ireland, Luxembourg, Spain, Switzerland, the Bahamas, the British Virgin Islands and the Cayman Islands.  The July 9th report was also mentioned at "Madoff Trustee Tells Judge of $1.08 Billion Found for Victims" and in  "Bad News for Madoff Victims: Too Many Claims, Not Enough Money". 

• Requiring investors to return monies, (i.e. applying clawback), may be another way to recover assets arising from securities fraud, as mentioned by the article "Clawback Caused By A Ponzi Scheme".  As more fully set forth in that article, In re: Bayou Group LLC, et. al., 396 B.R. 810 (Bkrtcy S.D.N.Y. 2008), deems monies paid-out to some investors to be presumptively fraudulent and possibly subject to clawback. 

Copyright 2009 Fred L. Abrams

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The "Asset Search News" for this week discusses my interview by AssetForfeitureWatch.com; Transparency International's press release about Kenyan police corruption; and the file assistant who pleaded guilty to computer intrusions in violation of U.S. privacy law.

+AssetForfeitureWatch.com provides the law enforcement community with training / support in the area of asset forfeiture.  Last Tuesday, AssetForfeitureWatch.com interviewed me for the upcoming article "Following the money trail with a professional asset hunter" which will be available at its website.

++My "September 26, 2008 Asset Search News Roundup" mentioned Transparency International's 2008 Corruption Perceptions Index.  That index ranked Kenya as having a low reputation for honesty, alongside Russia, Bangladesh and Syria.  On one of its webpages, Transparency International has also accused the Kenya Police of being the most corrupt institution in all of East Africa.

+++"Pretexting During An Asset Search" explained that U.S. privacy and other laws sometimes prohibit private detectives, information brokers, etc. from using false pretenses as part of an asset search.  U.S. Privacy laws can of course also apply to other kinds of  situations, like that Mr. William A. Celey was in.  According to a press release, Mr. Celey pleaded guilty to computer intrusions that violate  privacy laws.  Based on his one-count criminal information, Mr. Celey, (while a U.S. State Department file assistant), had illegally accessed data:

 "pertaining to the imaged confidential passport application files of various celebrities and their families, actors, models, musicians, athletes, record producers, family members, a politician, and other  individuals identified in the press".  (Criminal Information, at page 1). 

 (Edited July 13, 2009)

Copyright 2009 Fred L. Abrams

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This "Asset Search News Roundup" concentrates on the International Centre For Asset Recovery ("ICAR"), which is part of the Basel Institute on Governance.  ICAR's "Knowledge Centre" is particularly geared toward helping "asset recovery practitioners, investigators, prosecutors and policy makers worldwide".

The Knowledge Centre generally has information for domestic governmental authorities, about  forced collection proceedings when assets are hidden offshore in public corruption or other criminal schemes.  ICAR's hyperlink to "Stolen Asset Recovery: A Good Practices Guide for Non-Conviction Based Asset Forfeiture" for instance, describes how governmental authorities may interdict assets through Mutual Legal Assistance, Letters Of Request, (a.k.a. Letters Rogatory / Legal Assistance Requests), etc. 

Legal remedies similar to those mentioned above are also sometimes available at the individual level to private litigants seeking to recover assets hidden offshore.  To cite just one example, private litigants searching for assets hidden offshore in Switzerland, might pursue the remedies mentioned by "An Asset Search In Geneva".

Copyright 2009 Fred L. Abrams

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"Asset Search News Roundups" from this year on January 10, March 17, March 25, April 1, etc., raised a variety of issues related to Bernard Madoff.  My very last post, (i.e. "Will Ruth Madoff Keep Her Remaining $2.5 Million?), was also connected to him.  I again mention Bernard Madoff, among other things: 

• "Madoff gets 150 years for massive investment fraud" provides some details about yesterday's sentencing of Bernard Madoff.  His sentence was memorialized by the Court's June 29, 2009 judgment.

• Monica Conyers also resigned from the Detroit City Council yesterday, as was reported by The Associated Press.  Her criminal case will be discussed in my next article, "Public Corruption Charges Against Two Politically Exposed Persons". 

• "Efforts to Curb Foreign Bribery Lack Vigor, Report Finds" &  "The world is losing the fight against international bribery" are about a public corruption / anti-bribery report presented at an OECD  meeting in Paris.  This "2009 OECD Anti-bribery Convention Progress Report" is available at Transparency International's website. 

Copyright 2009 Fred L. Abrams

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On October 6, 2008 I wrote that an asset search  / investigation focusing on Nazi-looted art could culminate in a Holocaust-related art restitution case.  Holocaust-era art restitution cases are also going to be discussed at the "Holocaust Era Assets Conference", which starts tomorrow.  This conference is being held in the Czech Republic and  Nobel Laureate Elie Wiesel will be one of its attending delegates. 

"US lawmakers press Poland, Lithuania, on Holocaust assets" additionally explains that twenty-five U.S. legislators, (some of whom are delegates of the conference), have just executed letters in favor of restituting property stolen by the Nazis.  In New York meanwhile, the Museum of Modern Art recently moved to dismiss the Holocaust-era art restitution case of Grosz v. The Museum of Modern Art. 

As I mentioned in "Laundering Holocaust-Era Loot?", Grosz is about three paintings possessed by The Museum of Modern Art since the 1940's and 1950's.  The plaintiffs' amended complaint in Grosz, alleges that the three paintings had been stolen from expressionist and Dadist painter George Grosz, due to Nazi persecution. 

Also according to plaintiffs' amended complaint: "the greatest art looting in history occurred during the reign of the National Socialists ('Nazis') in Germany (1933-1945)". (Amended Complaint, at p. 2 ¶4).  Some of this Nazi-looted art is in fact, pictured below.  It had been hidden at a church in Ellingen, Germany and was discovered in 1945 by troops of the U.S. Third Army.

 Photo: National Archives and Records Administration

Copyright 2009 Fred L. Abrams

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Today's "Asset Search News Roundup" discusses yesterday's arrest and indictment of Mr. Allen Stanford, who was the subject of my very last blog post.  Just as Bernard Madoff was accused of money laundering, so is Mr. Stanford.  Mr. Stanford has among other things, been indicted pursuant to 18 U.S.C. §1956 (h) (Conspiracy to commit money laundering).  (Stanford Indictment, at pp. 45-48). 

Mr. Stanford's indictment claims that Mr. Stanford hid assets by laundering them through foreign bank accounts. (Id.).  In connection with Mr. Stanford's alleged crimes, U.S. authorities are also seeking the asset forfeiture of bank accounts in the United Kingdom, Canada and in Switzerland, including Geneva. (Id. at pp. 49-57). 

Assuming illicit assets were actually hidden by Mr. Stanford in Geneva, then Swiss statutes like Art. 305bis Swiss Criminal Code: Money Laundering (English Translation), might be relevant.  Finally, "An Asset Search In Geneva", explains some of the legal remedies which could apply to the asset forfeiture / seizure of any Stanford bank accounts maintained in Switzerland.

Copyright 2009 Fred L. Abrams

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A financial transfer through multiple jurisdictions which lacks any economic benefit, may especially be a red flag that assets have been hidden.  Although a variety of people sometimes use multiple jurisdictions to hide assets, this "Asset Search News Roundup" is about the front and / or shell companies reportedly used by the Fabio Enrique Ochoa Vasco drug trafficking network in Mexico, Colombia and the Caribbean.

According to a U.S. Treasury Department press release from yesterday, the Ochoa Vasco financial network includes the fifteen companies identified in the chart below.  Information about some other narco-traffickers can be found at: "Interdicting The Assets Of Mexico's Narco-Traffickers".

Click On Chart To Enlarge

Chart: Office Of Foreign Assets Control, U.S. Treasury

Copyright 2009 Fred L. Abrams

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My post "Asset Search & Fraud Investigation" mentions an August 1, 2006 report on offshore tax haven abuses. Pages six to seven of that 2006 report claimed that Quellos Group LLC hid $2 billion in capital gains from the IRS.  After the report was issued, Quellos was acquired by BlackRock Inc. on October 1, 2007.

I discuss Quellos in this "Asset Search News Roundup" because a Seattle federal grand jury has just indicted ex-Quellos chief Jeffrey I. Greenstein, attorney Charles Wilk, (who has a Master's Degree in tax law), and tax attorney Matthew Krane.  As the New York Times and a June 4 Department of Justice press release explained, the indictment in U.S.A. v. Krane, et. al., Docket No. 2:08-cr-00296, arises out of a supposed tax fraud. 

If the allegations of the June 4, 2009 superseding indictment in Krane are true, then Mr. Greenstein, Mr. Wilk and Mr. Krane may have hidden assets by exploiting foreign bank secrecy laws .  The three might have also hidden assets by using multiple jurisdictions and a shell company.  These and some other asset concealment methods, are listed in "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy".

Copyright 2009 Fred L. Abrams

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Covered this week is news about a former small-town Florida sheriff who pleaded guilty to hiding illicit assets / stolen public monies.  The fact that tax authorities from across the globe are working together to uncover those concealing assets in abusive offshore tax avoidance schemes, is also discussed.

• My May 4 "Asset Search News Roundup" mentioned that Florida Sheriff Charlie Morris had been accused of a fictitious bonus scheme.  A supporting affidavit filed in U.S.A. v. Morris, et. al., U.S. District Court for the Northern District of Florida, Docket No: 3:09-mj-000-30-EMT-1, basically claimed that Mr. Morris had hidden stolen public monies by laundering them through nominees.  As "Okaloosa Sheriff faces up to 85 years in prison, $1.75 million in fines" and  "Suspended Panhandle sheriff pleads guilty to fraud" reported last month, Mr. Morris pleaded guilty to money laundering and other charges.

• Some tax authorities fight abusive offshore tax avoidance schemes by sharing information through the Organisation for Economic Co-operation and Development ("OECD").  A May 29, 2009 press release confirms for example, that tax authorities throughout the world are cooperating with each other to ".... focus on banks, wealthy individuals and offshore activities".  The OECD generally promotes the use of Tax Information Exchange Agreements as a countermeasure against tax fraud.  The OECD had also previously disseminated a list of 1400 suspected tax cheats who had maintained offshore bank accounts in Liechtenstein.  

 Copyright 2009 Fred L. Abrams

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I first mentioned abusive offshore tax avoidance schemes in my July 28, 2007 post "Asset Search vs. Offshore Asset Protection".  Issues related to these same schemes are the subject of this "Asset Search News Roundup":

+The March 26, 2009 "Statement from IRS Commissioner Doug Shulman on Offshore Income", indicates the federal government's apparent willingness to provide relief to U.S. taxpayers involved in abusive offshore tax avoidance schemes.  The Commissioner's Statement suggests that a U.S. taxpayer who makes a voluntary disclosure about assets hidden offshore, could be eligible for immunity from criminal prosecution.  Said Statement was also discussed in the Forbes.com article, "IRS Offers Deal To Offshore Evaders".

++A U.S. Department of Justice press release explains that Florida yacht broker Robert Moran is scheduled for sentencing on June 26, 2009 for his concealment of assets via an offshore tax fraud scheme.  According to his plea agreement, Mr. Moran hid assets through his nominee Panamanian corporation which maintained a foreign bank account at UBS Switzerland.  Mr. Moran specifically pleaded guilty to filing a false tax return in violation of 26 U.S.C. § 7206 (1), (perjury on a return / false statements).  26 U.S.C. § 7206 is just one of several federal statutes which may be related to a tax fraud investigation, as mentioned at "An Asset Search, Tax Fraud & Divorce".

++The May 22, 2009 article "A New Front In War On Offshore Tax Evasion?" describes the use of a John Doe summons by the Internal Revenue Service against credit card processor First Data Corporation.  John Doe summonses are provided for by 26 U.S.C. §7602 and can be used to investigate U.S. taxpayers suspected of hiding assets offshore.  The John Doe summons specifically aimed at First Data Corporation was authorized by the federal court's April 15, 2009 Order.  The April 15 Order had been partly based on the thirty-four page supporting declaration of an Internal Revenue Agent with expertise in offshore investigations.

Copyright 2009 Fred L. Abrams

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The U.S. Securities and Exchange Commission could soon file a civil complaint against Countrywide co-founder Angelo Mozilo; the United Arab Emirates is reportedly boosting its anti-money laundering efforts; and the Estate of Dr. Max Stern recovers Nazi-looted art; are all mentioned in this "Asset Search News Roundup".

1. Countrywide's Angelo Mozilo may soon face civil proceedings for insider trading according to "SEC proposes suit versus Countrywide founder Mozilo".  Meanwhile, two Securities and Exchange Commission lawyers are under scrutiny for suspected insider trading and may face criminal charges, according to the Reuters' article "SEC lawyers probed for insider trading".

 
2. Reuters also reported on May 14, 2009 that there are some new anti-money laundering / counter-terrorist financing efforts being pursued in the United Arab Emirates.  The May 14 Reuters' article indicates among other things, that the United Arab Emirates requires the registration of hawala brokers.  Hawala however, can be abused by those hiding assets, as described by "Hiding Assets In Informal Banking Systems".

 
3. A May 6, 2009 press release, explains that U.S. Immigration and Customs Enforcement ("ICE"), turned over the 16th century Italian Baroque painting of "St. Jerome" to the executors and university beneficiaries of the Estate of Dr. Max Stern. The May 6, 2009 turnover occurred after art dealer Richard L. Feigen contacted authorities because he discovered that the "St. Jerome" painting displayed in his living room, was actually Nazi-looted art. 

 

Publicity about the earlier recovery of the Holocaust-era painting "Portrait of a Musician Playing a Bagpipe", (on behalf of the Estate of Dr. Stern), had apparently caused Mr. Feigen to question the provenance for "St. Jerome".  Mr. Feigen contacted authorities when he specifically learned that "St. Jerome" had originally belonged to the late Dr. Stern.  Due to Nazi persecution, Dr. Stern's painting had been forcibly sold in 1937 at Lempertz Auction House of Cologne, Germany.  The "St. Jerome" and "Bagpiper" paintings are respectively pictured below:

  



 

Copyright 2009 Fred L. Abrams

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California financier Danny Pang, former small-town Florida Sheriff Morris and a 29-year-old Mexican national, all share in common the fact that they are accused of hiding assets.  As this "Asset Search News Roundup" explains, these individuals are suspected of hiding assets by either smurfing, money laundering, or smuggling cash.

• California financier Danny Pang was just arrested for supposed "smurfing" (a.k.a. structuring--depositing cash just below a bank's reporting threshold).  Smurfing is a violation of federal law, as described by 31 U.S.C. § 5324.  My post "A Diplomat & His Offshore Bank Account" similarly mentions concealing assets by smurfing, as does Case 37, at pages 72-73 of "100 Cases from the Egmont Group".  

Mr. Pang meanwhile, has separately had his assets frozen and is the subject of the civil complaint described by a Securities and Exchange Commission press release.  As a Reuters' article and Wall Street Journal blog post both report, Mr. Pang is accused of  defrauding investors out of hundreds of millions during a Ponzi-like scheme.

• Former Sheriff Charles “Charlie” W. Morris of the Okaloosa County Sheriff's Office, is suspected of stealing government funds and then concealing them via money laundering.  According to a Department of Justice press release, this allegedly occurred as part of a fictitious bonus scheme while Mr. Morris was sheriff.  The details of the alleged crime are also mentioned by ABC News at: "Kickback Scheme: Florida Sheriff Indicted For Allegedly Doling Out Bonuses Then Stealing the Money".

• An April 28, 2009 press release describes how U.S. Customs and Border Protection agents interdicted the nearly $400,000 dollars depicted below.  Said monies were discovered close to the U.S.-Mexican border at the San Clemente checkpoint in the rear panels of a Volkswagen Gulf.  The Volkswagen had been driven by a 29-year-old Mexican national suspected of bulk cash smuggling in violation of 31 U.S.C. §5332.  The issue of bulk cash smuggling is also raised by my post: "Smuggling Cash Across Iraq's Border". 

  Copyright 2009 Fred L. Abrams

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This "Asset Search News Roundup" is about the five directors of Aurelia Finance facing a Swiss criminal prosecution because of an alleged investment of $800 million in a Madoff feeder fund; the criminal conviction of / prospective asset forfeiture against the owner of Numero Uno supermarkets; and the billion dollars missing in the R. Allen Stanford case.

• As a consequence of  today's ruling by a Swiss magistrate, a criminal prosecution can now proceed against five directors of wealth manager Aurelia Finance.  Aurelia Finance allegedly lost $800 million in client monies by investing in a Madoff feeder fund, as more fully set forth in the article "Swiss judge allows charges in Madoff losses case".  That article also mentions that these directors of Aurelia Finance have had their assets frozen.   

• George Torres was found guilty in California of fifty-five felony counts on April 21 according to a press release and his eleven Numero Uno supermarkets and other assets, are subject to asset forfeiture.  As is also described by the Los Angeles Times, Mr. Torres now faces up to life in prison for racketeering, solicitation of murder, bribery and other crimes.

• Based on a Bloomberg.Com article, U.S. court-appointed receiver Ralph Janvey reported  that as much as $1 billion can not be located in connection with R. Allen Stanford's suspected Ponzi scheme.  I last mentioned Mr. Janvey as part of my March 25, 2009 post.                      

Copyright 2009 Fred L. Abrams

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Declaration systems are discussed in this "Asset Search News Roundup" because they can be used at border crossings to detect / search for illicit assets concealed by cash couriers or others.  The Financial Action Task Force's "IX Special  Recommendation" even mentions that countries should use declaration systems against cash couriers to detect the physical cross-border movement of currency or bearer negotiable instruments. 

An important part of a declaration system at a border crossing can be the use of forms which require travelers to disclose their possession of currency or monetary instruments.  At its borders, Singapore requires some travelers to execute an NP727 form / "Physical Currency and Bearer Negotiable Instruments Report", as is more fully set forth by the Singapore Police.  Travelers crossing at U.S. borders similarly fill out FinCEN Form 105 / "Report of International Transportation of Currency or Monetary Instruments".  A traveler making a U.S. border crossing fills out this form to report that $10,000 or more in currency, (or monetary instruments), is being transported. 

A case involving a FinCEN Form 105 just arose at New York City's JFK Airport about a week ago.  A traveler had arrived at the airport from Korea and then used his FinCEN Form 105 to indicate that he was carrying more than $10,000 dollars.  At a secondary baggage exam by U.S. Customs and Border Protection it was apparent that the traveler actually possessed two supposed $100,000 U.S. Gold Certificates like the one pictured at the Bureau of Engraving and Printing's website.

Although $100,000 dollar Depression-era gold certificates had once been used by Federal Reserve Banks, they were never publicly circulated. The traveler's two $100,000 Gold Certificates were therefore deemed counterfeit and seized by U.S. Customs and Border Protection.  Afterward, they were ultimately turned over to the U.S. Secret Service for further investigation.  As mentioned by an April 7, 2009 press release, the traveler lacked criminal intent and has not been criminally charged. 

Copyright 2009 Fred L. Abrams

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The administrative complaint In The Matter of Fairfield Greenwich Advisors LLC and Fairfield Greenwich (Bermuda) Ltd., Docket 2009-0028, filed today in Massachusetts, is the topic of this "Asset Search Roundup".  As a review of today's complaint reveals, Fairfield Greenwich Advisors LLC and Fairfield Greenwich (Bermuda) Ltd. are accused of being a feeder fund or conduit for the wrongful transfer of investor's monies into Bernard Madoff's Ponzi scheme.  The 110 page complaint filed by the Enforcement Section, Massachusetts Securities Division can be viewed, (without its exhibits), at: Complaint Part "1" and Complaint Part "2".

William Galvin, Secretary of the Commonwealth of Massachusetts discussed this same complaint during his interview this morning, as is depicted in the CNBC "Fairfield Greenwich Fraud" video.  In Secretary Galvin's interview / video, he describes some of the specific allegations of the complaint.  Perhaps most important about "the Fairfield Greenwich Fraud" video was Secretary Galvin's comment in it, that an asset recovery for Madoff investors "may require an international effort." 

A comprehensive effort to recover assets from a fraudster like Mr. Madoff will in my opinion, involve a variety of international legal issues.  In Mr. Madoff's case there could be issues involving global asset forfeiture; mutual legal assistance treaties; letters rogatory or tax information exchange agreements.  Such issues could be highly relevant to an asset recovery effort targeting Mr. Madoff, since Mr. Madoff's Ponzi scheme had cross-border elements.  Mr. Madoff's Ponzi scheme for example, used bank accounts in New York and London to launder assets, as I mentioned in my "Asset Search News Roundup: March 17, 2009".  Meanwhile, "Madoff Trustee Locates Assets of $75 Million" reports that Mr. Madoff possesses $75 million in Gibraltar -- which could be yet another cross-border element part of Mr. Madoff's Ponzi scheme.   

Copyright 2009 Fred L. Abrams

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My last post "Forced Collections Against A Fraudster Like Madoff" mentioned the problem of numerous plaintiffs competing to recover assets from someone like Mr. Madoff.  This issue of "competing interests" during forced collections, is the subject of this "Asset Search News Roundup":

• "Madoff Trustee Picard Wins Power of Attorney Over U.K. Unit" indicates that prosecutors competed with SIPC trustee Irving Picard in Securities and Exchange Commission v. Madoff et. al., for control of Madoff's London-based company.  Although U.S. prosecutors claimed that their control of Madoff's company was necessary for a criminal investigation, Mr. Picard was ultimately given control via the Court's March 23, 2009 Order.

• In R. Allen Stanford's case, there might also possibly be competing interests between Antigua-appointed receiver Nigel Hamilton-Smith of Vantis Business Recovery Service and his U.S. counterpart, receiver Ralph Janvey.  This could be true since the Houston Chronicle reported in "Antigua receiver could seek Stanford's U.S. assets", that Mr. Nigel Hamilton-Smith and Mr. Janvey are both seeking to interdict Mr. Stanford's assets.

Copyright 2009 Fred L. Abrams

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USA v. Madoff, is the topic of this "Asset Search News Roundup" because it illustrates how asset forfeiture can be used to help fight money laundering and other crimes.  Prosecutors specifically mentioned their asset forfeiture claims against Bernard Madoff at pages 23 - 25 of the Information they filed on March 10, 2009.

Among other things, the eleven-count Information charged Mr. Madoff with concealing assets through "international" and / or other money laundering.  (Information, at Counts 5, 6 & 7).  Paragraph 23 at pages 12-13 of the Information, suggested that Mr. Madoff used multiple jurisdictions and foreign bank accounts to launder monies.  Paragraph 23 for instance, explained that Mr. Madoff had laundered funds between financial accounts in New York and London.

After Mr. Madoff pleaded guilty to all eleven counts in the Information, prosecutors filed their Pimentel letter (i.e. a letter setting forth their position on the application of Federal Sentencing Guidelines to Mr. Madoff's case). See United States v. Pimentel, 932 F.2d 1029, 1034 (2d Cir. 1991).  Both the Pimentel letter and Information cited the following statutes relevant to forfeiting assets: 18 U.S.C. §§981 (a) (1) (C) & 982;  21 U.S.C. § 853 (p);  and 28 U.S.C. § 2461.  As the "Notice of Intent To Seek Forfeiture" filed on March 15, 2009 also reveals, prosecutors are targeting assets possessed by both Mr. Madoff and his wife, Ruth.

Copyright 2009 Fred L. Abrams

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The "Asset Search News Roundup" for this week explores the vital role financial institutions have in detecting assets concealed through money laundering.  This kind of  issue arose in a most recent phone conversation I had with an investigator who works for a Financial Intelligence Unit located offshore.  The investigator had read one of my articles herein and decided to contact me for additional information about that article. 

During our telephone conversation we ended up talking about one specific case which had involved a financial institution residing in the investigator's jurisdiction. In that case, the financial institution had been used as a repository for the illicit proceeds of a financial fraud involving multiple jurisdictions.  The financial institution had "washed" the illicit proceeds as a "laundering link" in a money laundering circuit.

The investigator mentioned that once the money laundering scheme was finally uncovered, employees of that particular financial institution had to be given additional training-- presumably on spotting money laundering "red flags", reporting suspicious activity, etc.  All of this highlights the critically important role employees at financial institutions have in detecting and / or preventing money laundering.  I also examined this same role of some financial institutions in money laundering schemes, in the following articles:

1. "A Tax Fraud & Identity Theft From Miami"
2. "Concealing Cash By Laundering In Lithuania"
3. "Fighting Financial Fraud At UK Banks"

Copyright 2009 Fred L. Abrams

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This week's "Asset Search News Roundup" is about bank secrecy laws which can be exploited by tax cheats or other individuals fraudulently concealing their assets.  As the OECD explained at page 19, ¶¶ 29 & 30 of "Improving Access To Bank Information For Tax Purposes", bank secrecy laws play a critically important role in a country's banking system.  Without these laws, few bank customers would likely entrust their private financial affairs to a bank. 

Meanwhile, the case by U.S. authorities to compel UBS to disclose all of its bank customers who are suspected U.S. tax cheats, continues in Miami federal court.  Although UBS has already made some disclosure, it must undoubtedly consider Swiss bank secrecy laws, (a.k.a. professional secrecy laws). 

As I mentioned in "Financial Discovery & Foreign Bank Secrecy Laws ", using a domestic court to elicit evidence from a bank witness like UBS, can involve the foreign bank secrecy laws of an offshore tax haven.  News reports which mention the Miami litigation against UBS and / or  Swiss bank secrecy laws, include:

1. "U.S. Wants More Client Names From UBS"
2. "UBS Revealed Far Less Than U.S. Sought in Tax Case"
3. "IRS unlocks UBS vault hiding Americans evading taxes"
4. "Bank secrecy faces coordinated global assault"
5. "Swiss franc weaker vs dollar on bank secrecy woes"
6. "UBS Forced to Lift Secrecy Skirt for Peek by IRS"

Copyright 2009 Fred L. Abrams

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In this "Asset Search News Roundup", I discuss the money laundering case against N.Y.P.D Officer Yaniris Balbuena-- who is accused of hiding drug monies in nine bank accounts.  I also mention the money laundering investigation just commenced against Houston billionaire R. Allen Stanford.

 *Although Officer Yaniris Balbuena is almost a nine year veteran of the N.Y.P.D., she was arrested on February 13th for a suspected violation of 18 U.S.C.§ 1956 (h) (conspiracy to commit money laundering).  The New York Times and a U.S. Immigration and Customs Enforcement press release each explained that Officer Balbuena could have parked over $230,000 in drug monies in nine bank accounts.  The source of the $230,000 is believed to be Officer Balbuena's former companion, an alleged Bronx narcotics trafficker killed in a drug-related homicide.  As reflected by the attached docket report, the money laundering case against Officer Balbuena is pending in the U.S. District Court for the Southern District of New York. 

**The February 16, 2009, SEC civil complaint against Houston billionaire R. Allen Stanford alleges that Mr. Stanford may have committed an $8 billion dollar fraud.  "Accused Financier Under Federal Drug Investigation" and Bloomberg.Com however, report that federal agents are additionally launching a money laundering investigation concerning Mr. Stanford.  Among other things, the investigation is reportedly focusing on whether Mr. Stanford could have washed monies on behalf of the narco-trafficking Gulf Cartel, whose kingpin Osiel Cardenas-Guillen, is pictured below:

Photo: U.S. Drug Enforcement Administration 

Copyright 2009 Fred L. Abrams

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The U.S. Treasury Department's Office of Foreign Assets Control ("OFAC") is the focus of this "Asset Search News Roundup".  OFAC administers economic and trade sanctions against international drug traffickers, terrorists and certain countries under Presidential national emergency powers or federal laws.  In order to impose such economic sanctions, OFAC or other governmental authorities search for assets owned by those on the Specially Designated Nationals and Blocked Persons list. 

OFAC for example, recently designated pharmaceutical company AQUILEA, S.A. and plastic bag manufacturer MEGAPLAST, S.A., as Specially Designated Narcotics Traffickers pursuant to Executive Order 12978.  As a U.S. Treasury Department press release explained, this designation freezes any assets subject to U.S. jurisdiction, which belong to MEGAPLAST or AQUILEA. 

Said press release also suggests that the true beneficial ownership of MEGAPLAST and AQUILEA, (by drug kingpins Miguel Rodriguez Orejuela and Gilberto Rodriguez Orejuela), may have been concealed.  Furthermore, the following OFAC chart indicates that these drug kingpins might have concealed their MEGAPLAST and AQUILEA assets through family members used as nominees:

Image: U.S. Treasury's Office of Foreign Assets Control

Copyright 2009 Fred L. Abrams

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Two U.S. mayors suspected of public corruption crimes are mentioned in this "Asset  Search News Roundup".  The first mayor described below, might have concealed a bribe via a home renovation.  The second one is suspected of hiding gifts.  Meanwhile, a third mayor was just arrested along with his wife for an alleged insurance fraud relating to Hurricane Katrina of 2005.

• Last week Hartford, Connecticut's Mayor Eddie Alberto Perez, was charged with bribery, falsifying evidence and conspiring to falsify evidence.  As "Hartford mayor's arrest a black eye for city" and / or "Another mayor charged with corruption" indicate, Mayor Perez is essentially accused of taking a bribe payment concealed as a home renovation.  Accused of a similar scheme, is ex-N.Y.P.D. Commissioner Bernard Kerik.  Mr. Kerik was the alleged secret beneficiary of $250,000 in apartment renovations paid by individuals seeking government contracts.

• Mayor Sheila Dixon of Baltimore, Maryland, is believed to have hidden gifts and failing to make the necessary financial disclosures about them.  "List of charges against Mayor Sheila Dixon", provides specific details about the January 9th indictment of Mayor Dixon.  Based on both "List of charges against Mayor Sheila Dixon" and a Wall Street Journal article, the Mayor's supposed scheme included her larcenous taking of holiday gift cards intended for the needy. 

• Gulfport, Mississippi Mayor Gregory Brent Warr and his wife, Laura Jean Warr, were recently arrested for a suspected insurance fraud arising from Hurricane Katrina.  According to "Miss. Mayor, Wife Charged for Katrina Fraud", the Mayor and Mrs. Warr are accused of defrauding FEMA and an insurer out of $222,798.10.  Their alleged insurance fraud is also described in a Department of Justice press release.

Copyright 2009 Fred L. Abrams

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This "Asset Search News Roundup" discusses criminal liability for hiding assets via money laundering in Mexico; a computer intrusion at Heartland Payment Systems which may have compromised tens of millions of credit / debit card transactions; and the sentencing of a man for identity theft after he was caught with 66 counterfeit driver's licenses:

1.  The Mutual Evaluation Report of Mexico, (released by the Financial Action Task Force on January 12), mentions that criminal liability for money laundering and / or terrorist financing in Mexico, has yet to meet international standards.  Paragraph 5 at page 3 of the Report's Executive Summary expressly states this.  Pages 4-5 of the Report's Executive Summary also detail some of the deficiencies in Mexico's legal system for regulating money laundering.

2.  What could be the largest theft of credit / debit card information to date, recently occurred at payment processor Heartland Payment Systems of Princeton, New Jersey.   As reported by The Washington Post, tens of millions of credit / debit card transactions may have been recorded by a hacker using malicious software on Heartland's processing network.  A press release describes how MasterCard and Visa first reported suspicious activity to Heartland, which then used forensic auditors to uncover the computer intrusion.

3.  This past Friday, David Lorenzo Fletcher was sentenced to prison for identity theft (18 U.S.C. §1028), in U.S.A. v. Fletcher.  Mr. Fletcher was given a sentence of eight years and five months in federal court after he was initially indicted on July 26, 2007 for both identity theft and alleged possession of counterfeit securities (18. U.S.C. §513 {a}).  According to the article "Man sentenced for identity-related crime", Mr. Fletcher had been stopped by a state trooper and at that time possessed: 66 counterfeit Missouri driver's licenses, 5 Social Security cards from other people, 6 Texas temporary driving permits, 8 forged payroll checks, along with $3,909 cash. 

Copyright 2009 Fred L. Abrams

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The "Asset Search News Roundup" for this week describes suspected asset concealment schemes with cross-border elements in Israel, Singapore and the Philippines:

• On January 11 The Jerusalem Post reported that a New York grand jury is considering indicting U.S. businessman Morris Talansky.  The article explained that Mr. Talansky is suspected of money laundering, tax evasion and bribery arising from financial transfers to Israel's Prime Minister Ehud Olmert.  As a United Press International article indicated, Prime Minister Olmert was accused of laundering money from Mr. Talansky and secretly transferring it to Israel.  

• The U.S. Department of Justice is seeking forfeiture of about $3 million dollars part of an alleged scheme to conceal bribe monies paid to the son of the former Prime Minister of Bangladesh.  Based on a U.S. Department of Justice press release and /or The Daily Star,  the $3 million involves bribe proceeds parked in financial accounts in Singapore.  The bribes were supposedly transferred through U.S. financial institutions and allegedly used to influence the award of Bangladeshi public works contracts. 

• Former priest Rodney Lee Rodis is appealing his recent Virgina state court embezzlement conviction, according to "Pinoy ex-priest in US appeals embezzlement conviction".  Mr. Rodis was earlier convicted in federal court on related charges for a fraud and money laundering scheme.  In his federal case, Mr. Rodis pleaded guilty to defrauding two rural churches / the Catholic Diocese of Virginia.  Among other things, Mr. Rodis had concealed his ill-gotten gains by transferring them to relatives in the Philippines and purchasing upscale waterfront property there.

Copyright 2009 Fred L. Abrams

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Whether Bernard Madoff's Ponzi scheme could have violated foreign criminal laws, is the subject of this "Asset Search News Roundup".  The Serious Fraud Office of the United Kingdom's criminal justice system has issued a press release stating that it is pursuing an investigation of Mr. Madoff. 

Austria's Financial Market Authority also announced in its press release, that it had taken control of one of Mr. Madoff's largest investors-- Bank Medici.  This raises the possibility that Austrian criminal investigators have joined those now scrutinizing Mr. Madoff. 

During my interview yesterday on Fox Business News, I mentioned that Mr. Madoff might have violated money laundering laws in foreign / offshore jurisdictions. This could be true for example, if Mr. Madoff used offshore bank accounts to conceal assets arising out of his Ponzi scheme. 

Copyright 2009 Fred L. Abrams

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This "Asset Search News Roundup" highlights shell companies which can be used to conceal bankruptcy estate, marital, probate or other assets.  As "Bank Melli Accused Of Hiding Its Fifth Avenue Assets" mentions, the asset forfeiture case against New York's ASSA CORP. is perhaps a good example of a domestic shell company suspected of concealing assets via money laundering.

According to the article "New Wyoming business laws aimed at fighting fraud", Wyoming is trying to prevent such criminal misuse of its shell companies.  The article mentions among other things, that Wyoming has made filing false company information a felony punishable up to two years in prison.  The article additionally states that, (according to Wyoming's Secretary of State Max Maxfield), Wyoming could now be a less attractive venue for some criminals.

Foreign shell companies are however, also commonly used to hide assets. A Department of Justice press release and / or Boston Globe article explain that stolen paintings had been concealed through the Panamanian shell company Erie International Trading Co.  Retired Massachusetts attorney Robert Mardirosian had used Erie International Trading Co., offshore lawyers and a Swiss bank, to hide Paul Cezanne's Bouilloire et Fruits for twenty years.  Furthermore, he had hidden another six stolen paintings for thirty years the very same way. 

Copyright 2009 Fred L. Abrams

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Mentioned by this "Asset Search News Roundup" are: bearer instruments such as money orders, structuring cash deposits and a possible financial fraud at one national chapter of Transparency International:     

*The article "Accused St. Louis drug ring leader pleads guilty of money laundering", explained that Mr. Julius Turrentine was suspected of using bearer negotiable instruments in the form of U.S. Postal Service money orders to conceal assets.  It reported that Mr. Turrentine pleaded guilty to conspiracy to commit money laundering for using postal money orders to send from $120,000 to $200,000 through the mail.  The attached sanitized bearer share certificate from my post "Bearer Shares & An Asset Search", is an example of another type of bearer instrument which may similarly be used to hide assets.   

**Although he was sentenced to just ten months and time served, Connecticut convenience store owner Mohammad Ghouse now faces deportation back to his native Pakistan.  Based on "EHartford man gets time served for hiding cash deposits", Mr. Ghouse had structured over $578,000 through 91 cash deposits at Webster Bank between Feb. 1 and July 18, 2005.  Structuring, (a.k.a "smurfing"), bank deposits violates 31 U.S.C. § 5324.  It can also be a red flag of money laundering, as mentioned by "A Diplomat & His Offshore Bank Account".

***The website for the Papua New Guinea chapter of Transparency International explains that it "...is raising public awareness of the adverse effects on society of dishonesty and mismanagement".  A press release however, states that the Papua New Guinea chapter and the banks it does business with, may have been victimized by the financial fraud of a Transparency International employee.         

Copyright 2008 Fred L. Abrams

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O.J. Simpson's  Pro Football Hall of Fame ring; a report that Minnesota could even suffer because of Bernard Madoff's suspected $50 billion Ponzi scheme; and Liechtenstein's new Tax Information Exchange Agreement; are the focus of this "Asset Search News Roundup":

• By interdicting O.J. Simpson's diamond encrusted Pro Football Hall of Fame ring, Judgment Creditor Fred Goldman hopes to satisfy part of his $33.5 million judgment arising from the slaying of his son, Ron Goldman.  "O.J. Simpson victim denies he has Hall of Fame ring", reports that memorabilia dealer Alfred Beardsley specifically claims he does not possess the ring.  According to an Associated Press article, Mr. Beardsley further alleged during forced collection proceedings, that O.J. Simpson may have "lost the ring on a golf course years ago".

• "Minn. budget may be victim of Madoff fraud", speculates that Minnesota could possibly suffer losses in state income tax revenue as a result of Bernard Madoff's alleged $50 billion Ponzi scheme.  Mr. Madoff now faces a federal criminal complaint; a Securities and Exchange Commission complaint and is the subject of a temporary restraining order freezing his assets.  The attached Department of Justice press release also discusses the arrest of the 70-year-old Mr. Madoff. 

• "Offshore Bank Accounts In Liechtenstein" mentions that the German-Liechtenstein border has been a popular land crossing for hiding / smuggling cash destined for Liechtenstein's banks.  Liechtenstein however, might possibly be leaning toward greater transparency at its banks.  A recent press release for example, indicates that the attached Tax Information Exchange Agreement could lead U.S. tax authorities to assets hidden in Liechtenstein.

Copyright 2008 Fred L. Abrams

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Past "Asset Search News Roundups" described different schemes in which assets have been hidden. This "Asset Search News Roundup" is similarly about the criminal complaint filed against Illinois Governor Blagojevich, which raises among other things, the question of whether Governor Blagojevich had possibly considered hiding / dissipating assets.

While the criminal complaint against Governor Blagojevich alleges that he tried to: extort the Tribune Co., sell President-elect Obama's Senate seat, etc., it also claims that Governor Blagojevich learned from a news story that he had been surreptitiously recorded during a criminal investigation.  Presumably because of this criminal investigation, Governor Blagojevich had allegedly discussed conveying monies from his "Friends of Blagojevich" campaign fund to prevent them from being "frozen". (Criminal Complaint at pages 73-74, paragraphs 115 {c} & {d}).

The criminal complaint against Governor Blagojevich further alleges that he discussed whether he should prepay monies to his criminal defense lawyer with the understanding that these same monies might later be returned. The Governor also supposedly talked about depositing campaign contributions into a newly formed fund raising account called "Citiizens for Blagojevich".  All of the foregoing suggests that Governor Blagojevich might have contemplated hiding assets because he anticipated asset forfeiture or other forced collection proceedings as the subject of a criminal investigation.

Meanwhile, The World Bank published a blog post about Governor Blagojevich this week, "Illinois Governor Blagojevich: sign of endemic corruption in the US?".  Said blog post argues that the U.S. does not suffer from endemic levels of corruption despite the fact of the criminal complaint against Governor Blagojevich.  Governor Blagojevich however, is the fifth Illinois governor to face criminal charges in the last fifty years, as mentioned by the Los Angeles Times article "Illinois governor faces corruption charges".  According to that Los Angeles Times article, an FBI agent also made the following comment about Illinois: "If this isn't the most corrupt state in the United States, it's certainly one hell of a competitor".

Copyright 2008 Fred L. Abrams

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Ex-N.Y.P.D. Police Commissioner Bernard Kerik and Puerto Rico's Governor Anibal Acevedo Vila are among the many indicted for allegedly hiding assets during public corruption and tax fraud schemes.  This "Asset Search News Roundup" is an update about the criminal cases pending against both of them.

The Daily News reported that a superseding indictment was filed this week against Bernard Kerik, who was New York City's 40th Police Commissioner.  An August 18, 2008 docket entry in Mr. Kerik's case also mentioned that the news media had unsuccessfully sought the unsealing of grand jury-related materials.  As my December 2, 2007 post "White-Collar Crime & A Former Top Cop" described, Mr. Kerik had among other things, been earlier indicted for an alleged public corruption and tax fraud scheme.

Meanwhile, I mentioned in "Puerto Rico's Governor & Public Corruption", how Puerto Rico Governor Anibal Acevedo Vila had too been indicted on tax fraud and public corruption charges.  As the Court's docket however reveals, parts of the Governor's superseding indictment were just dismissed.  The grounds for said partial dismissal are fully provided in the Court's December 1, 2008 Order.

Copyright 2008 Fred L. Abrams

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Hiding assets in offshore or foreign bank accounts, is the focus of this "Asset Search News Roundup".  As I explained in "Using Multiple Jurisdictions To Launder Money", a common method of hiding assets is "putting assets offshore in one jurisdiction and exercising control over them through another".  Those using multiple jurisdictions to hide assets however, often also maintain offshore bank accounts as part of their schemes:

• On November 21, 2008 hotel executive Stanley S. Tollman pleaded guilty to tax fraud charges.  Mr. Tollman had allegedly used offshore bank accounts from 1994 to 1999 in order to hide assets and income from the IRS.  According to "Hotel Executive to Pay $105 Million in Fraud Case", Mr. Tollman received a sentence of only one day of probation, but agreed to pay the U.S. Government $105 million as part of a plea agreement.

• in "Key UBS exec indicted in tax scheme", The Miami Herald reported about the indictment of UBS executive Raoul Weil .  Prosecutors allege that Mr. Weil helped about 20,000 U.S. taxpayers conceal approximately $20 billion offshore during the years 2002 through 2007.  The November 24 article "UBS Clients Seek Amnesty on U.S. Taxes", also mentioned Mr. Weil's indictment.  It further indicated that, (because of anticipated tax fraud investigations), some UBS clients hiding assets offshore have approached the IRS hoping for amnesty.

• The Reuter's article: "FACTBOX: Status of bank secrecy protection in Europe" stated that U.S. President-elect Barack Obama "will open up a a new front in a growing campaign against Swiss banking secrecy".  It essentially reported that France and Germany are calling for greater scrutiny of offshore banking in high-risk geographical locations, such as Switzerland or other tax havens.

Copyright 2008 Fred L. Abrams

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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 could 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:

• 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 and the Diamond Smuggler" 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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