The instant post mentions hiding assets through: a lawyer; offshore bank accounts; etc. It is the 34th post at the "Divorce & Hidden Money" series.
The instant post mentions hiding assets through a lawyer; offshore bank accounts; etc. It is the 33rd post at the “Divorce & Hidden Money” series.

Ohio lawyer David Keith Roland was recently disbarred for using a Swiss bank account in a scheme to help a divorcing wife hide marital assets from her divorcing husband. The divorcing wife in this alleged scheme was chiropractor Denise M. Carradine of Boardman, Ohio. Mr. Roland had represented Ms. Carradine in a divorce action commenced by Ms. Carradine’s then husband, Eric Martin.

As part of the alleged scheme to hide marital assets from Mr. Martin, Ms. Carradine reportedly supplied Mr. Roland with $854,261.10. The Ohio Supreme Court Decision disbarring Mr. Roland said Ms. Carradine had “structured” payments of this money to Mr. Roland “to avoid detection under banking laws.” Mr. Roland deposited the $854,261.10 into two client trust accounts. Mr. Roland then wire transferred $814,105.96 of the $854,261.10, into a bank account at Maerki Baumann & Co. in Zürich, Switzerland.

This Swiss bank account may have been a nominee bank account, (i.e. an account titled in the name of an intermediary), beneficially owned by Ms. Carradine. Some of the money from the Swiss bank account was also transferred into a bank account located in the Turks & Caicos Islands. Based upon the foregoing, Mr. Roland’s & Ms. Carradine’s alleged scheme to conceal marital assets might have involved: structuring; a gatekeeper/lawyer; nominee bank accounts; multiple jurisdictions; & offshore banks.

Illustration: ollo/Shutterstock.com

Copyright 2016 Fred L. Abrams

Your Search For Assets Hidden Offshore

When naming offshore havens for opening secret bank accounts, people usually mention Switzerland, the Cayman Islands, Liechtenstein, etc.  Meanwhile, bank accounts in almost any country can be put to work to hide & place assets out of reach. “Using Multiple Jurisdictions To Launder Money” discussed a suspected scheme to bribe judges in Italy.  According to prosecutors, illicit proceeds from this offshore scheme were hidden in bank accounts located in the U.S. & elsewhere. “Money Laundering, Marital Assets & Divorce” outlines another scheme which relied on cross-border elements to conceal assets. The scheme involved a divorcing spouse in the U.S. who hid undeclared revenue in a Swiss bank & then “washed” it through a bank in Germany.¹

As the above essentially suggests, tracking assets offshore can become a critically important part of your asset search. How do you search for assets hidden offshore? One way is by employing legal tools. The following article discusses the tools federal prosecutors may use to collect evidence from witnesses residing offshore.² Two of the tools the article mentions are compelled consent forms & letters rogatory.  These two tools are not just for use by prosecutors. They are sometimes used by divorcing spouses, judgment creditors & others searching for offshore bank accounts/assets hidden offshore:

Click On The Image To Read The Entire Article

¹The fact pattern supplied at “Money Laundering, Marital Assets & Divorce,” has been changed & sanitized for privacy reasons.

²“Obtaining Foreign Evidence Outside of The Mutual Legal Assistance Treaty Process,” U.S. Attorneys’ Bulletin March 2007, is supplied courtesy of the Executive Office for United States Attorneys.

Image of offshore banking & tax haven concept: ChameleonsEye/Shutterstock.com

Copyright 2016 Fred L. Abrams

Man Digging

Locating hidden assets can be especially difficult if underground banks/informal banking systems like hawala have been utilized. “The Hawala Alternative Remittance System and its Role in Money Laundering”¹ explains that hawaladars, (a.k.a hawala operators), secretly transfer funds to financial accounts maintained in Switzerland, Dubai, the United Kingdom &/or other international financial centers.  The money laundering typology² shown below describes how one hawaladar secretly transferred money in a possible terrorist financing scheme. Governmental authorities can search for these assets by focusing on wire transfers & suspicious activity at foreign bank accounts:

¹The Hawala Alternative Remittance System and its Role in Money Laundering, Courtesy of FinCEN.

²Money Laundering Typology / Case Ref: 06060, Courtesy of The Egmont Group.

Image of man digging: JrCasas/Shutterstock.com

Copyright 2013-2016 Fred L. Abrams

Schemes to hide assets can involve bulk-cash smuggling combined with other methods.
A scheme to hide assets from you may be carried out by combining bulk-cash smuggling with other concealment methods.

A divorcing spouse; judgment debtor; tax cheat; etc. may use several methods to conceal assets. “Red Flags For An Asset Search” listed 18 of these methods.  The methods for hiding assets included: bulk-cash smuggling; shell companies; multiple jurisdictions; foreign bank accounts; & nominees.  These methods might have been combined by Mr. Victor Lipukhin to conceal more than $10 million dollars in secret Swiss bank accounts. The press release “Former President of Russian Steel Producer’s U.S. Subsidiary Indicted for Hiding Assets in Secret Swiss Bank Accounts,” talked about Mr. Lipukhin’s alleged scheme to hide assets from the IRS.

Mr. Lipukhin was indicted on 3/20/2014 because of the suspected scheme.  The indictment suggests Mr. Lipukhin may have employed bulk-cash smuggling; multiple jurisdictions; shell companies; & other methods to conceal his alleged beneficial ownership of Swiss bank accounts. Mr. Lipukhin is thought to have initially formed shell companies in the Bahamas which he allegedly used to open the Swiss bank accounts. Mr. Lipukhin might have hired a nominee director for the shell companies, who could have acted as a bank signatory on the Swiss bank accounts.

If Mr. Lipukhin used a nominee director, it would have helped hide his suspected beneficial ownership of the Swiss accounts. According to the indictment, Mr. Lipukhin supposedly relied on real estate transactions; mortgages & a Canadian lawyer to hide assets.  Mr. Lipukhin also reportedly bought an automobile by paying approximately $24,539 in cash.  Although the seller of the automobile was required to notify the IRS by filing a Form 8300, Mr. Lipukhin allegedly tried to persuade the seller to keep quiet about the sale.  If this actually happened, it would have been a red flag that Mr. Lipukhin might have engaged in bulk-cash smuggling or money laundering.  The criminal case against Mr. Lipukhin is still pending at the prosecutor’s office, as the Court’s docket report reveals.

Image: Gorich/Shutterstock.com

Copyright 2016 Fred L. Abrams

Photo Of A Whistle

I. PROGRAM DESCRIPTION

At the New York County Lawyers’ Association on October 13, 2015 from 5:30 PM to 9:00 PM, I will be the program chair of “Whistleblowers, Secret Swiss Bank Accounts & Recovering Hidden Assets.” Attendee registration is available at the website available here or by calling the New York County Lawyers’ Association at (212) 267-6646. During the October 13th program, I highlight the use of whistleblower tips to recover hidden assets.  I show how to search for assets which can be hidden by high net worth divorcing spouses; corporations; Ponzi schemers; tax fraudsters; etc.  I talk about tools you can use to recover assets hidden in Switzerland and other places across the globe. The October 13th program also focuses on the Internal Revenue Service & Securities Exchange Commission whistleblower programs which can provide qualifying tipsters with the largest payouts compared to any other reward programs in the world.

Jack BlumWashington, D.C. attorney Jack Blum is well-known internationally for his representation of whistleblowers.  Mr. Blum will talk about Mr. Hervé Falciani, the whistleblower the media dubbed “the [Edward] Snowden of Swiss banking.”  Mr. Falciani allegedly stole Swiss bank account information from HSBC in Geneva and as a whistleblower turned the information over to French authorities. This alleged HSBC bank account information eventually fell into the hands of the International Consortium Of Investigative Journalists, which published part of it at their webpages known as the Swiss Leaks project.  This past February 8th, Mr. Blum appeared on the CBS/60 Minutes television show to discuss the foregoing.  He will similarly discuss these matters at the October 13th program and analyze: the IRS whistleblower program; problems whistleblowers face in the real world; and the difficulty lawyers may encounter in dealing with whistleblowers either as clients or tipsters.

Photo Charles Bott

Charles Bott QC, Head of Carmelite Chambers in the United Kingdom, is a recognized authority on financial crime and its regulation.  He has appeared in more than 80 serious fraud trials including some of the leading cases of recent years and advised many other clients under investigation.  Mr. Bott specializes in cases of serious fraud, money laundering and revenue evasion; and in the United Kingdom, he is regularly instructed in serious criminal cases and regulatory cases of all kinds.  At the October 13th program, Mr. Bott will talk about the LIBOR manipulation litigation in the United Kingdom, which he is involved in.  He will mention recent developments and revelations in the ongoing litigation; and will discuss the role of inside informants and cooperating witnesses in it.

ThomasLabaton & Sucharow partner Jordan A. Thomas will also speak at the October 13th program.  Mr. Thomas will discuss the Securities Exchange Commission’s whistleblower program, as he is one of the world’s leading experts on it. He will review the advantages and disadvantages of the different whistleblower programs; and the ethical concerns gatekeepers like attorneys, accountants, officers and directors have, in reporting illegal behavior in both the civil and criminal contexts.  As more fully set forth below, Mr. Thomas: is a former assistant director in the Commission’s Enforcement Division; had a leadership role in developing the Commission’s whistleblower program; and was assigned to many of the Commission’s highest-profile matters such as those involving Enron, Fannie Mae, UBS & Citigroup. Continue Reading Whistleblowers, Secret Swiss Bank Accounts & Recovering Hidden Assets

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If you are a divorcing spouse, judgment creditor or anyone else who believes they may need to do a bank search to locate hidden assets parked offshore, read this post to see how individuals sometimes hide their assets.  It covers the legal remedies that may be available to you in your asset search for offshore bank accounts.  This post was first published in 2013 and was called “Hidden Assets Offshore & A Bank Search To Find Them.”

Beneficial owners around the world are able to secretly transfer assets across international borders into offshore bank accounts.  The beneficial owners sometimes do this by money laundering through multiple jurisdictions; bulk-cash smuggling; back-to-back loans; shell companies; nominee incorporation services & gatekeepers like lawyers.  Legal remedies are however, usually available for finding hidden assets transferred offshore.  These remedies may even include seeking a court order directing a Swiss or other offshore bank to perform a bank search and disclose bank customer information.

MONEY LAUNDERING

The link chart below describes how one divorcing husband concealed both undeclared revenue and marital assets via multiple jurisdictions.¹  The husband laundered millions from the U.S., through a Swiss bank and a German one.  Prior to the equitable distribution hearing in his divorce, the husband alleged he had a liability of $29 million owed to a prime bank in Germany because of an arm’s length business loan.  As this link chart reveals, the supposed arm’s length loan was back-to-back , (i.e. a fully collateralized loan in which the borrower and the lender are one and the same):

(Click On The Link Chart To Enlarge)

Continue Reading An Asset Search To Find Secret Offshore Bank Accounts

shutterstock_115001698Part 1 of this post discussed the judgment creditors in Havlish v. bin Laden who are are trying to interdict assets owned by Iran.  Part 1 explained the judgment creditors sought to attach monies reportedly earmarked for the purchase of Airbus aircraft. Before seeking the attachment of the monies, the judgment creditors subpoenaed confidential information kept at U.S. Treasury’s Office of Foreign Assets Control (“OFAC”).  This confidential information could help the judgment creditors search for bank accounts or other assets Iran beneficially owns.

OFAC agreed to release the confidential information after the judgment creditors served OFAC with subpoenas & after the Court issued protective orders restricting the judgment creditors’ use of the information.  Via their subpoena dated March 2, 2015, the judgment creditors first requested confidential information about assets in the U.S. blocked at financial institutions because of economic sanctions against Iran.  This subpoena requested that OFAC provide the judgment creditors with the following:

[a]s of March 2, 2015, a list of all financial institutions holding assets in the United States that are blocked due to a nexus with the government of the Islamic Republic of Iran, its political subdivisions, and its agencies and instrumentalities, and the total such assets reported by each such institution, rounded to the nearest $100,000.

The judgment creditors next broadened their asset search by serving a May 17, 2015 subpoena on OFAC.  The May 17th subpoena requested seven categories of information from OFAC regarding: Iran’s financial accounts which had been frozen in Switzerland; financial accounts of Iran’s Mahan Air; financial accounts maintained by the Hezbollah, al Qaeda and Taliban terrorist groups; financial accounts at 3 banks in China; etc.  Click here to view the May 17th subpoena.

Image: Jim Vallee/Shutterstock.com

Copyright 2015 Fred L. Abrams

Offshore Accounts Photo1

UPDATE 1-Two more Swiss banks strike deals with U.S. over tax evasion” reported that the U.S. Department of Justice, (“the DOJ”), reached its 22nd agreement with Swiss banks.  A DOJ press release mentions the agreements were pursuant to the Swiss Bank Program.  The Swiss Bank Program “provides a path for Swiss banks to resolve potential criminal [tax] liabilities in the United States,” the press release says.  This program seems to be part of the DOJ’s Offshore Compliance Initiative.  Among other things, the Offshore Compliance Initiative focuses on prosecuting offshore bankers who are suspected of helping tax evaders hide assets from the IRS.  The Offshore Compliance Initiative webpage explains there are open investigations into numerous offshore banks located in Switzerland and elsewhere.  The webpage also says as part of the program, criminal charges were filed between 2008 and 2013 against “over 30 banking professionals.”

I.  RELEVANT U.S. CRIMINAL LAWS

The law most frequently used to criminally charge tax evaders in the U.S. is 26 U.S.C. § 7201 (Attempt to evade or defeat tax).   An offshore banker who opens a bank account to help a tax evader hide assets from the IRS, might be charged with conspiracy to commit a tax fraud.  See 18 U.S.C. § 371 (Conspiracy to commit offense or defraud United States).  If prosecutors believe a foreign banker promoted a fraudulent tax scheme, they might also charge him/her with mail fraud (18 U.S.C. § 1341); wire fraud (18 U.S.C. §1343); or other crimes.  Except for mail & wire fraud, the penalties for each offense can be a maximum sentence of five years.  In the case of mail &/or wire fraud, the maximum sentence in most situations may be twenty years.  A judge can direct that a sentence of imprisonment be served concurrently or consecutively.  There can also be large fines, restitution and/or asset forfeiture.

II.  INITIATING A PROSECUTION

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.U.S. Dep’t of Justice, United States Attorneys’ Manual 9-27.220 §B Comment (1997).

Furthermore, “when deciding whether to prosecute, the government attorney need not have in hand all the evidence upon which he/she intends to rely at trial: it is sufficient that he/she have a reasonable belief that such evidence will be available and admissible at the time of trial.” Id.  Therefore, an offshore banker should expect to be prosecuted if federal prosecutors believe they can gather legally sufficient evidence demonstrating the offshore banker violated U.S. criminal laws.

Image: Olivier Le Moal/Shutterstock.com

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