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This 11th post in my “Private Investigators” series focuses on how private investigators may use data brokers to search for your assets & other personal information.

The August 5th Bloomberg article “This Company Has Built a Profile on Every American Adult,” brings up IDI,Inc. The article suggests that IDI has built a profile about you on its idiCore database. Private investigators, debt collectors, lawyers & government authorities might access this database to search for your assets & other personal information. The end of the article also says “IDI’s marketing databases may help PIs predict people’s moves or digitally peek into their cars or medicine cabinets.” IDI could be collecting your personal information through data mining. How can data brokers like IDI mine data? They may analyze your clickstream, as mentioned by my May 11, 2015 post:

Data Brokers Searching For Your Assets, Bank Accounts & Other Personal Information?

As the Federal Trade Commission, (“FTC”), video depicted above reveals, data brokers (a.k.a. “information brokers”) and some other private sector businesses sell your highly personal information. The video says for example, your location, interests, prescriptions and medical history may all be “shared or sold.” Pages 22, 24, 34 & Appendix B-5 of a May 2014 FTC report similarly indicate that data brokers can search for your financial information including: where and when you open a bank account; estimated household income; the assets you own; loan history; credit card use and tax return transcripts.

Continue Reading Private Investigators: An Asset Search Via Data Brokers Like IDI,Inc.

Detective Looking Through Magnifying Glass

This is the 10th post in my series about what private investigators can and cannot do legally when searching for assets. The post discusses “K.C.” who was defrauded out of at least $500,000.00 by Patricia Walker-Halstead, a private investigator “K.C.” hired to investigate a suspected stalker. The post discusses wire fraud & bribery—which are issues that sometimes arise during an asset search or other private investigation:

“K.C.” a resident of Nebraska, thought she was being stalked. She therefore hired Patricia Walker-Halstead, (“Walker”), to investigate the alleged stalker. Between March 11, 2011 & November 28, 2012 “K.C.” made 59 payments to Walker Investigations, Walker’s private detective agency. Walker represented to “K.C.” that some of the payments would be given to “Scott.” Walker told “K.C.” that “Scott” was a Captain with the Nebraska State Patrol who could help with the investigation.

Walker even supplied “K.C.” with e-mails purportedly sent by “Scott” & represented that “Scott” was a potential romantic suitor for “K.C.” Walker however, never paid anyone at the Nebraska State Patrol named “Scott”, to investigate on behalf of “K.C.” As part of Walker’s scheme to defraud “K.C.”, Walker fabricated “Scott” &  Walker had not performed any investigation. Given all of the foregoing, federal prosecutors in USA v. Walker-Halstead charged Walker with 11 counts of wire fraud. Walker’s indictment alleged the 11 counts were based on false e-mails Walker sent to “K.C.” about “Scott.”

Walker ultimately pleaded guilty to one count of wire fraud. On April 1st, Walker was sentenced to 12 months & 1 day of imprisonment & Walker was ordered to pay restitution to “K.C.” in the amount of $500,000.00. Under a fact pattern different than what is written above, prosecutors might also consider whether someone like “K.C.” intended to have a stalker investigated by bribing the Nebraska State Patrol. Bribing a local law enforcement officer can violate the federal program bribery statute codified at 18 U.S.C. § 666. As a manual for federal prosecutors explains:

[A] charge under 18 U.S.C. § 666 may nonetheless be appropriate if the solicitor or intended recipient of the bribe is a person who acts as an agent of an organization that receives in one year $10,000 or more in Federal grant, loan, contract, or insurance funds. U.S. Attorney’s Manual, 2044 Particular Elements, Web. May 11, 2016.

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7402945976_8ca11c5515_qThis is the 9th post in my series discussing private investigators.  It highlights former private investigators Elaine White & Cullen Johnson who were convicted of a money laundering conspiracy.  The conspiracy involved bogus asset searches Ms. White & Mr. Johnson apparently performed for their clients.  Mr. Johnson seemed to blame the bogus searches on ‘the fog of information.’ As also set forth below, Ms. White recently petitioned for a writ of habeas corpus arguing she should be resentenced in her criminal case.  

From about 2006-2012 ex-Toronto private investigator Elaine White &/or her husband ex-police detective Cullen Johnson, offered asset searches including a search for bank accounts.  Ms. White’s & Mr. Johnson’s clients were licensed private investigators, divorcing spouses & others seeking assets hidden from them.  Ms. White &/or Mr. Johnson however, supplied their clients with phony financial data/spurious bank account information.  As reported at “Island-hopping private eyes indicted on fraud, money laundering charges,” police criminally charged Ms. White & Mr. Johnson for frauds related to clients in Canada.

Ms. White & Mr. Johnson then fled to the Bahamas & the Turks & Caicos Islands.  Next, they were extradited from the Turks & Caicos Islands to face criminal charges in Newport News, Virginia in USA v. White, et al. Docket No. 4:13-cr-00047.  An August 23, 2012 Affidavit In Support Of Criminal Complaint And Arrest Warrant described the criminal case against Ms. White & Mr. Johnson.  Ms. White’s & Mr. Johnson’s April 10, 2013 indictment also said they had “operated a purported asset locator business for clients.”  During September 2013, Mr. Johnson pleaded guilty to Count Two of the indictment (i.e. conspiracy to commit money laundering).  On October 7, 2013 the Court also accepted Ms. White’s guilty plea to Count Two.

The Statement of Facts at Ms. White’s plea agreement showed that Ms. White had provided her clients with “false and fraudulent data and fabricated bank records…”  Mr. Johnson also wrote a December 24, 2013 letter discussing the bogus private investigations.  According to the letter available here, Mr. Johnson’s ‘misjudgments’ in the investigations were due to the ‘fog of information’:

IF THE EXPRESSION THE “FOG OF WAR” IS DEEMED TO BE ACCEPTABLE AND RECOGNIZED AS BASIS FOR EXPLAINING TRAGIC MISJUDGEMENTS AND ERRORS IN MILITARY SITUATIONS, THE EXPRESSION THE “FOG OF INFORMATION” SHOULD BE DEEMED TO BE AN ACCEPTABLE AND RECOGNIZED BASIS FOR EXPLAINING OTHERWISE IRRATIONAL MISJUDGEMENTS AND ERRORS IN INVESTIGATION SITUATIONS.¹

On January 16, 2014 Ms. White & Mr. Johnson were both sentenced to 66 months in prison, 3 years of supervised release and ordered to pay $1,021,738 in restitution.  Ms. White is reportedly serving this sentence at the low-security federal prison in Aliceville, Alabama.  While there, Ms. White drafted her December 21, 2015 Petition For A Writ of Habeas Corpus Under 28 U.S.C. § 2255.  At the Petition, Ms. White alleges she had ineffective assistance of counsel during her criminal case & that she is entitled to a resentencing.

¹ Page numbered “17” at Cullen Johnson’s December 24, 2013 letter, (Docket Entry 76), U.S.A. v. White et al., United States District Court, Eastern District of Virginia, Docket No. 4:13-cr-00047.

Image courtesy of Flickr (Licensed) by Tsahi Levent-Levi.

Copyright 2016 Fred L. Abrams

Photo Insider

This is my 21st post in the Divorce & Hidden Money series.  It is also the 8th post in my series describing what private investigators can and cannot do legally when searching for hidden assets.  My July 13th post mentioned private investigators & their clients using law enforcement databases and illegal pretext calls to search for assets.  As a practicing attorney, I am aware of another kind of asset search which would be illegal & this post describes it.  The post provides a hypothetical account which discusses a divorcing wife who hired a private investigator.  The private investigator in this hypothetical account, illegally obtains bank account information from an insider—a teller at a bank located in Nevada.

THE DIVORCING WIFE IN NEW JERSEY

Even though Ralph was a medical doctor with a thriving private practice, Ralph claimed in his New Jersey divorce that he had a low net worth.  Ralph’s divorcing wife Nancy suspected Ralph had hidden money in anticipation of the divorce.  Nancy gathered documents she obtained during the pretrial discovery phase of the divorce and before.

These documents included copies of Ralph’s: passport, statements for airline frequent flyer miles, phone bills, tax filings and additional financial records.  Nancy gave the documents to Mike, the licensed private investigator Nancy retained to perform an asset search regarding Ralph.  After conducting an investigation for more than a month, Mike told Nancy that Ralph hid monies at offshore banks and at a bank in Nevada.

THE SEARCH FOR SECRET BANK ACCOUNTS

Mike stated that Ralph secretly maintained about $2.5 million dollars in the offshore bank accounts which were located in high-risk geographical locations known for money laundering.  Ralph had supposedly hidden another $85,000 dollars in the secret bank account in Nevada.  Mike explained to Nancy that he could collect evidence regarding the secret bank accounts by conducting searches at the Nevada and the offshore banks.

Nancy paid Mike over $10,000 dollars for the bank account searches and Mike provided Nancy with an investigative report summarizing his search results.  The report named the offshore banks and the Nevada bank Ralph supposedly used to hide his money.  It supplied the purported secret bank account numbers; account balances and detailed the bank signatory information.

The report meanwhile, never explained the source of Mike’s information/how Mike detected Ralph’s supposed secret bank accounts.  When Nancy asked Mike how he had obtained the information at the report, Mike said the report was completely reliable.  A trusted colleague supplied Ralph’s offshore bank account information, Mike said.  Mike also explained he obtained Ralph’s Nevada bank account information from an “insider”, a teller who worked for the Nevada bank.  According to Mike, the insider used the bank’s computer system to sneak a peek at Ralph’s $85,000 dollar bank account.

THE U.S. CRIMINAL LAW VIOLATION IN NEVADA

Assuming that Mike’s representations to Nancy were true, then the bank teller and Mike could have violated privacy and other U.S. laws.  The two may have conspired to access Ralph’s Nevada bank account information in violation of  18 U.S.C. §1030  (Fraud and related activity in connection with computers).  Another type of case involving an insider at a bank was U.S.A. v. Feliciano, 2:09−cr−00197−NS.  The March 2009 indictment filed in Feliciano, alleged that a bank teller had stolen confidential customer information as part of a bank fraud/identity theft scheme.

First Image: Patrick Brassat/Shutterstock.com

Second image courtesy of Flickr (Licensed) by Tsahi Levent-Levi

Copyright 2015 Fred L. Abrams

Accusation Photo

This post discusses when federal prosecutors might initiate a criminal prosecution against private investigators and their clients as a consequence of an illegal asset search.  It is the 7th post in my series covering private investigators.

If you are a divorcing spouse; heir under a will; a creditor; etc., you may hire a private investigator to help you search for hidden assets.  Your private investigator might then try to detect assets/discover leads by reviewing: passports; phone records; bank account statements; credit card transactions; tax filings; or other confidential information.  What if your private investigator illegally obtained this confidential information from sources like law enforcement databases in the U.S. or by making illegal pretext calls in the U.S.?

Could federal prosecutors then accuse you of crimes because your private investigator performed this illegal asset search for you?  If you knew that confidential information was going to be illegally obtained, prosecutors might initiate a criminal prosecution against you.  The December 6, 2007 press release issued in U.S.A. vs. Torrella et. al. 3:07-cr-05775 discussed the significance of this element of knowledge.  The press release said that several private investigators had been accused of illegally obtaining confidential information.  The private investigators supposedly wanted “to uncover assets or income” during investigations they performed for their clients.  According to the press release, the U.S. Attorney indicated a willingness to criminally prosecute the clients if the clients knew the ‘information was obtained illegally’:

This indictment alleges that private investigators across the country illegally obtained confidential information and sold it to the clients who hired them,’ said United States Attorney Jeffrey C. Sullivan. ‘This is a very serious matter, the investigation is continuing and it is our intention to go after these ‘clients’ if we can prove that they knew this information was obtained illegally.’

In deciding whether to initiate criminal charges against you, federal prosecutors would also follow “the principle that, ordinarily, the attorney for the government should initiate or recommend Federal prosecution if he/she believes that the person’s conduct constitutes a Federal offense and that the admissible evidence probably will be sufficient to obtain and sustain a conviction.”  U.S. Dep’t of Justice, United States Attorneys’ Manual 9-27.220 §B Comment (1997).

First Image: Jane0606/Shutterstock.com

Second image courtesy of Flickr (Licensed) by Tsahi Levent-Levi

Copyright 2015 Fred L. Abrams

6 29 15 Article

I do not know how many witnesses Brian interviewed while he was an IRS Special Agent or when he was a high-ranking official at U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”).  Nor do I know the number of informants’ tips Brian collected over the course of his federal law enforcement career.  I did however, watch Brian try to collect tips during the witness interview depicted below.  I first wrote about the witness interview at an Asset Search Blog post published in 2008.  I now supply this post because I believe the most effective way private investigators can search for hidden assets in some matters is through witness interviews & informants’ tips.  This is the 6th post in my series about what private investigators can and cannot do legally while searching for assets:

The information supplied by foreign-based private investigators indicated the divorcing husband hid marital assets offshore.  Evidence gathered during the divorce also suggested the husband might have committed a tax fraud in hiding the marital assets.  To try to detect any additional assets hidden by the husband, I contacted Brian.  Brian was a former high-ranking official at FinCEN and he had earlier been an IRS Special Agent.  Brian was going to lead our interview of the husband’s business associate, who we were about to meet for the very first time.  Right before the interview, Brian identified some of the federal statutes relevant to many tax fraud investigations:

  • 26 U.S.C. § 6050I, large cash reporting requirements for trades & businesses (including attorneys).
  • 26 U.S.C. § 7201, most commonly applied tax evasion statute (however requires proof of a tax liability).
  • 26 U.S.C. § 7203, failure to file a timely tax return.
  • 26 U.S.C. § 7206 (1), perjury on a return / false statements, (unlike 26 U.S.C. § 7201,  proof of a tax liability is unnecessary).
  • 26 U.S.C. § 7206 (2), perjury on a return / false statements, but primarily used against tax return preparers such as accountants and attorneys.
  • 18 U.S.C. § 371, conspiracy to commit offense / defraud the United States.
  • 18 U.S.C. § 1001, false statements made to the federal government (can apply to any material verbal or written statement, even if unsworn).
  • 18 U.S.C. § 1956, money laundering.
  • 18 U.S.C. § 1957, money laundering involving property derived from specified unlawful activity.
  • 18 U.S.C. § 1961, Racketeer Influenced & Corrupt Organizations (“RICO”).
  • 31 U.S.C. § 5324, structuring bank deposits.

I hoped that Brian and I would learn what the business associate knew about the divorcing husband’s hidden money and suspected tax fraud.  As Brian started the interview, he told the business associate: “once a tax fraud investigation starts rolling along, nobody knows where it may end up.

First Image: Ron and Joe/Shutterstock.com

Second image courtesy of Flickr (Licensed) by Tsahi Levent-Levi

Copyright 2008-2015 Fred L. Abrams

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As “A Surreptitious Search For Money Hidden In Divorce & Other Cases” explains, law enforcement databases may house confidential information about a person’s assets.  Private investigators & the general public cannot lawfully access these law enforcement databases/computers.  This is the 5th post in my series about what private investigators can and cannot do legally when searching for assets:

NJ.com reporter Vernal Coleman & private investigator Brian Willingham recently tweeted on an alleged scheme to access a confidential law enforcement database:

These tweets link to articles saying that Newark N.J. Police Captain Anthony Buono & Nutley N.J. private detective Dino D’Elia are suspected of conspiring to access a law enforcement computer/database.  According to one article, “Buono and D’Elia allegedly obtained the personal data of approximately 900 individuals, selling each set for $100.”  Mr. D’Elia &/or Mr. Buono are thought to have then possibly sold the data to private investigators &/or to data brokers.  State prosecutors have charged Mr. Buono & Mr. D’Elia with supposed violations of New Jersey’s conspiracy & computer theft laws.

Private investigators like Mr. D’Elia, (who are suspected of computer intrusions), sometimes face a federal prosecution rather than state prosecution.  USA v. Buell et. al., Index No. 1:15-cr-00385 is a matter in which a private investigator faced this type of federal prosecution.  At the criminal complaint in Buell, federal prosecutors alleged that private investigator Joseph P. Dwyer bribed an NYPD officer & conspired to obtain data from a law enforcement database.  Last week federal prosecutors slimmed down the criminal charges at their complaint against Mr. Dwyer.  They did this on June 18th by filing a one-count superseding information against Mr. Dwyer, charging him with a suspected bribery scheme.

First image courtesy of Flickr (Licensed) by elhombredenegro

Second image courtesy of Flickr (Licensed) by Tsahi Levent-Levi

Copyright 2015 Fred L. Abrams

Photo Of A Money TrailWhen vast sums of money are hidden in a bank account there is usually an electronic trace or other kind of money trail.  A skilled investigator may help detect the money trail, as suggested by my 2010 post Secreting Assets Without A Border Trace.  The post quoted “Roger” a former foreign intelligence officer who was working as a private investigator.  At the post, Roger discussed some asset concealment methods and investigative techniques for following a money trail.  As these concealment methods and investigative techniques are still being used, the relevant part of Secreting Assets Without A Border Trace is featured below.  This is also the 4th post in my series about what private investigators can and cannot do legally when searching for assets.¹

As a consequence of his U.S.-based Ponzi scheme, Bill the investment adviser was indicted for alleged violations of 18 U.S.C. § 1956 (money laundering); 26 U.S.C. § 7201 (tax fraud); 18 U.S.C. §§ 1341 and 2 (mail fraud); 15 U.S.C. §§ 78j(b) and 78ff(a) (securities fraud); and 15 U.S.C. §§ 80b-6 and 80b-17 (investment adviser fraud). The critical question now was: what had happened to the $35 million dollars lost by the damaged investors in Bill’s Ponzi scheme? After Bill insisted he dissipated this $35 million by gambling and on cocaine, prostitutes, etc., federal agents interdicted $1 million U.S. dollars hidden in a bedroom wall at Bill’s California home.

Among the other items the agents seized during their search of Bill’s home, were Bill’s passport, desktop computer, cell phone, bank statements and jewelry store receipts.  Some of these items revealed that Bill laundered $7.5 million of the damaged investors’ money through a nominee bank account opened in the name of a Nevada shell company.

Bill had eventually withdrawn this $7.5 million to purchase diamonds and other portable valuable commodities at Nevada jewelry stores He next traveled as an airline passenger to Zurich, Switzerland, according to his passport. To date, the only recovery from Bill’s Ponzi scheme has been the $1 million once hidden in his bedroom wall. Given all of the above, “Roger” explained how investigators could try to determine whether Bill had secreted any of the $35 million in a foreign bank account: Continue Reading Private Investigators: Detecting Hidden Assets By Following A Money Trail

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This is the 3rd post in my private investigator series discussing what private investigators can and cannot do legally when searching for assets.  My January 6th post mentions that on behalf of clients, former attorney Mary Nolan and her private investigator conspired to place illegal wiretaps in cars.  Their clients were reportedly never accused of committing the wiretapping crimes.  The instant post discusses clients and/or lawyers who are accused of conspiring to commit crimes with the private investigators they use.

In USA v. Moser, private investigators Nathan Moser and Peter Siragusa were indicted along with their client Carlo Pacileo, the alleged director of security at ViSalus Inc.   The Jauary 7, 2015 indictment in their case alleges Mr. Pacileo, Mr. Moser and Mr. Siragusa conspired with computer hackers to illegally gather e-mails and Skype information.  They allegedly sought this information because it might have helped Mr. Pacileo’s employer ViSalus Inc., in a civil lawsuit it had filed.

The 3rd paragraph of the New York Times article “Private Eye Is Said to Face Prosecution in a Hacking” refers to the January 7th indictment in the Moser case.  The New York Times article also discussed the situation of lawyers engaging private investigators.  The article says there was speculation that lawyers sometimes hire private investigators to hack into e-mail accounts to learn about witnesses or evidence.  The article essentially says that in order to have “plausible deniability” there was evidence “some lawyers hire private investigators to obtain information for cases without delving too deeply into how it is gathered.

Would this strategy prevent the prosecution of a lawyer or client willing to take the risk of having something illegal done?  As the New York Times article “Investigator Admits Guilt in Hiring of a Hacker” explains, authorities are concerned about lawyers gathering information through hackers.  Furthermore, federal prosecutors follow “the principle that, ordinarily, the attorney for the government should initiate or recommend Federal prosecution if he/she believes that the person’s conduct constitutes a Federal offense and that the admissible evidence probably will be sufficient to obtain and sustain a conviction.”¹   Stated differently, a prosecutor is not likely to decline a prosecution if he or she thinks an individual hired a private investigator to commit a crime.

¹USAM 9-27.220

First image courtesy of Flickr (Licensed) by Dennis Skley

Second image courtesy of Flickr (Licensed) by Tsahi Levent-Levi

Copyright 2015 Fred L. Abrams

This is the 2nd post in my series about private investigators & what they can & cannot do legally when searching for assets.  It is also the 10th post in my Divorce & Hidden Money series.  The Huffington Post article “Uncovering Hidden Assets In Divorce Litigation” observes that information obtained by “surreptitious means” might be used by one divorcing spouse against the other.  Obtaining information through a surreptitious search can be critical to recovering assets in a broad range of criminal & civil cases.  Depending on the circumstances, surreptitious searches might involve wiretaps; bank searches; law enforcement databases; and physical surveillance.  These surreptitious means have however, sometimes been abused by private investigators, attorneys & others in the following ways:

WIRETAPS– As stated in testimony at a 1967 U.S. Senate hearing ‘private bugging in this country can be divided into two broad categories, commercial espionage and marital litigation.’ ¹  Former attorney Mary Nolan handled divorce & family law matters for nearly 30 years before pleading guilty to the wiretapping & tax fraud charges at counts 1-4 &/or 6 of her 2012 criminal indictment.  An amended judgment showed Ms. Nolan was sentenced to serve 24 months in prison, 3 years of supervised release, etc.  Ms. Nolan’s sentencing memorandum said her cases frequently involved allegations that husbands were hiding assets.  The prosecutor’s sentencing memorandum meanwhile, claimed Ms. Nolan had employed a private investigator “to install eavesdropping devices in cars used by her clients’ spouses for use in their divorce proceedings.”

BANK SEARCHES– Some private investigators try to surreptitiously search banks in the U.S. for accounts secretly opened by divorcing spouses, debtors, etc.  These investigators may claim they search through computer research; insiders; or information brokers.  Private investigators cannot ordinarily search banks legally because of privacy and other U.S. laws, as explained by the post available here.   The Court has also noted “it is more likely than not that the only way that information brokers can obtain private financial information from banks is through the use of deception and trickery, including impersonation of account holders.”  Commonwealth v. Source One Associates, Inc., No. CIV. A. 98-0507-H, 1999 WL 975120, at *6 (Mass. Super. Oct. 12, 1999) aff’d sub nom. Com. v. Source One Associates, Inc., 436 Mass. 118, 763 N.E.2d 42 (2002). Continue Reading Private Investigators: A Surreptitious Search For Money Hidden In Divorce & Other Cases