Money Laundering Typology Post

One way to learn how to search for hidden assets is to read “A Laundry List For An Asset Search.” Another way is to study money laundering typologies. Money laundering typologies are used by law enforcement and regulators to develop countermeasures against emerging criminal trends. “100 Cases from the Egmont Group” contains a wide variety of money laundering typologies.¹ Although “100 Cases from the Egmont Group” arises from data collected during the 1990s, it is still relevant today. “100 Cases from the Egmont Group” describes these methods for concealing assets:

  • Concealment within existing business structures
  • Misuse of legitimate businesses
  • Use of false identities, documents or straw men
  • Exploiting international jurisdictional issues
  • Use of anonymous asset types

Below is the money laundering typology “Example B: Limited edition jewellery.”² It is about an agent who participated in an auction for a diamond necklace. The agent tried to conceal monies from suspected frauds by using multiple jurisdictions; offshore bank accounts & a portable valuable commodity—a diamond necklace.

Example B Limited editon jewellery

¹”100 Cases From The Egmont Group” courtesy of The Egmont Group of Financial Intelligence Units.

²“Example B: Limited edition jewellery” courtesy of The Guernsey Financial Services Commission.

First Image: studiostoks/Shutterstock.com

Copyright 2017 Fred L. Abrams

computer research

Full-blown asset searches rely on computer-based research; private investigators; and human intelligence from depositions, witness interviews and informant’s tips. Computer-based research is also the cornerstone of most kinds of asset searches. This research may track the ownership of assets ranging from valuable automobiles to patents or other intellectual property.

An Asset Search Via Data Brokers Like IDI, Inc.” is one of my posts about computer-based research. “A Low-Cost Asset Search” meanwhile, discusses how you can try to find hidden assets by using computer-based research.¹ “A Low-Cost Asset Search” even mentions some asset searches you can perform for free. Another free computer-based research tool is the Corporationwiki website.

Corporationwiki identifies relationships between people and corporations. It and other computer-based research might help you spot intermediaries, (i.e. nominees), suspected of hiding a beneficial owner’s assets. Prosecutors in Warsaw, Poland used Corporationwiki in at least one case in 2009, to try to detect assets hidden through an alleged money laundering scheme. This particular case & the prosecutor’s use of Corporationwiki, is mentioned at page 2 of the request for legal assistance/letter rogatory available below.

(CLICK ON THE IMAGE TO READ THE LETTER ROGATORY)

2009 Letter Rogatory Poland

¹“A Low-Cost Asset Search” contains material courtesy of  L.L. Jones, Concealing Assets In Bankruptcy: What Are the Consequences And How Do Trustees Find The Assets?, Association of the Bar of the City of New York (Presentation: April 24, 2008).

First image: courtesy of Flickr (Licensed) by Jennie

Copyright 2017 Fred L. Abrams

12 8 16 Post
This 34th post in the “Divorce & Hidden Money” series highlights ways assets may be hidden in a money laundering circuit.

The November 30th New York Times Magazine article “How To Hide $400 Million” described the divorce between Sarah Pursglove & Finnish internet tycoon Robert Oesterlund. A document from Mr. Oesterlund’s lender allegedly indicated Mr. Oesterlund’s net worth was $400 million, “How To Hide $400 Million” said. This article also said Mr. Oesterlund claimed during the divorce that the ‘net family property’ was only worth a few million dollars.

Ms. Pursglove however, did not believe this and tried to search for assets reportedly hidden by Mr. Oesterlund. Based on “How To Hide $400 Million,” Mr. Oesterlund was an ultra-high-net-worth spouse who allegedly hid assets through:

  1. gatekeepers (such as lawyers & bankers);
  2. multiple jurisdictions;
  3. offshore bank accounts;
  4. shell companies;
  5. & trusts.

These can all be used as laundering links which wash assets in a money laundering circuit. A money laundering circuit is shown at a chart on a webpage from FINTRAC, a Canadian financial intelligence unit. An ultra-high-net-worth spouse may place assets into a laundering circuit through: structuring bank deposits; money mules/bulk-cash smuggling; diamonds or other portable valuable commodities; false invoicing schemes (i.e. trade-based laundering); wire transfers; etc. How do you perform an asset search when these methods are used to hide assets? Click here for seven tips.

Image: red mango/Shutterstock.com

Copyright 2016 Fred L. Abrams

11 27 16 Post

2/12/17 Update: It seems that after I published this post on 11/27/16, the Jamaican Major Organized Crime and Anti-Corruption Task Force, (“MOCA”), listed Mr. Peter Sangster as a fugitive. “The people on this list are wanted for serious and or violent crimes” MOCA’s website says. 

Forty-seven-year-old Peter Sangster of Cherry Gardens, Kingston 8, Jamaica, has been a local politician and businessman in Jamaica. After Jamaican authorities subjected telephone carrier Jamus Communications Ltd., (“Jamus”), to a levy, Mr. Sangster allegedly offered to help Jamus by procuring a “waiver” of payment. Mr. Sangster supposedly supplied Jamus with this waiver which was dated 1/9/2013. The waiver appeared to be signed by the then Prime Minister Portia Simpson Miller. The Prime Minister’s signature on the waiver is now however, thought to be a forgery.  It also appears that Jamaican law does not provide for a waiver of payment regarding the levy.

In exchange for allegedly supplying Jamus with the waiver, Mr. Sangster may have had Jamus transfer over $150,000 U.S. dollars to 2 bank accounts in the United States. One of the bank accounts is believed to be titled “Sangster Group LLC,” maintained at Bank of America, 515 Ocean Avenue, Brooklyn, New York. The other bank account was also at Bank of America and was thought to be titled “Peter and Tania Sangster.” Based on these allegations, MOCA investigated Mr. Sangster to determine whether he committed a forgery and larceny.

MOCA seemed to search for assets related to Mr. Sangster. MOCA sought corporate & banking records for “Sangster Group LLC.” MOCA similarly sought records for the “Peter and Tania Sangster” Bank of America account. On 10/6/16 a court in Delaware issued an order on behalf of MOCA, permitting a prosecutor to collect these records. The order authorized the prosecutor to gather the records listed on pp. 7-11 at the following letter rogatory/legal assistance request from Jamaica:¹

Letter Rogatory P Sangster
To Read The Letter Rogatory, Click On The Image Above

¹The letter rogatory/legal assistance request has been partly sanitized for privacy reasons.

First Image: Light And Dark Studio/Shutterstock.com

(Edited 2/12/17)

Copyright 2016 Fred L. Abrams

10 26 16 Post

If you are litigating against an adversary who is hiding assets from you, subpoenaing your adversary’s credit card statements might help you track the hidden assets. As my post “Secreting Assets Without A Border Trace” suggests, expenses listed at a credit card statement may lead you to your adversary’s assets. “Secreting Assets Without A Border Trace” is about tracking a Ponzi schemer’s illicit assets. The Ponzi schemer in that post could have: converted cash into diamonds; parked the diamonds in a Swiss security box (i.e. safe deposit box); and opened a secret bank account in Luxembourg.

The subpoena available below has language you can include at a subpoena for credit card records. The subpoena was issued to American Express by the Chapter 7 trustee in Michael Mastro’s bankruptcy case.  Along with credit card statements, the subpoena requested “[c]opies of all checks, money orders, electronic transfer records, and other documents showing the source and manner of each [credit card] payment…” Some of my other posts discussing subpoenas are “An Asset Search of A Lawyer Employed To Conceal Cash” & “Eliciting Evidence From Foreign Bank Witnesses.

American Express Subpoena

Image of torn paper & word subpoena: arfa adam/Shutterstock.com

Copyright 2016 Fred L. Abrams

Laundry List Post:ImageGovernmental authorities follow money trails in order to interdict assets hidden by narco-traffickers; money launderers; Ponzi schemers; tax fraudsters & other determined criminals. During your asset search, you can similarly follow a money trail to track assets which have been hidden from you. You might detect a money trail by scrutinizing data related to the person or business entity suspected of hiding assets.

You can collect this data in some situations, by issuing subpoenas; using compelled consent forms; or through additional legal tools. Below is the “Financial Investigations Checklist” & it includes a laundry list of items which contain data.¹ You may be able to collect some of the items the list mentions: bank account records; telephone records; utility company records; credit card statements & many others. Data at these kinds of items could conceivably help you follow a money trail to assets hidden from you.

(To Read The Financial Investigations Checklist, Click On The Following Image)


Financial Investigations Checklist

 

¹Financial Investigations Checklist, Courtesy of The United States Department of Justice.

First image: Picsfive/Shutterstock.com

Copyright 2016 Fred L. Abrams

Trade-Based Laundering Photo

If your adversary is using a business entity to conceal assets from you, one thing to look for is trade-based money laundering. A June 2006 report by the Financial Action Task Force explains that trade-based laundering schemes can include: the over or under-invoicing of goods or services; the over or under-shipping of goods; falsely describing goods or services; or multiple invoicing.¹ You can search for assets hidden via trade-based laundering by spotting the red flags. Page 24 of the June 2006 report describes the red flags and some of them are:

  • a disparity between a shipped commodity’s bill of lading and its invoice.
  • a disparity between a commodity’s value as recorded on its invoice and fair market value.
  • the shipping of goods although there is no profit/economic benefit.
  • a shipment with a nexus to shell companies.
  • letters of credit related to a shipment that have been amended or extended repeatedly.
  • the type of shipped commodity is inconsistent with the importer’s/exporter’s ordinary business activities.
  • shipping to or from a high-risk geographical location (i.e. a jurisdiction especially vulnerable to money laundering).

Pages 9-20 of the June 2006 report also provide 12 case studies showing how trade-based money laundering can be used to conceal one’s assets. The August 24, 2007 plea agreement of Gene Haas might describe another case of trade-based money laundering. Mr. Haas entered this plea agreement after his arrest on June 19, 2006 for suspected tax fraud. Attachment A at the plea agreement says the Enmark Aerospace and Supermill companies had provided Mr. Haas with invoices for fictitious purchases.

According to Attachment A, Mr. Haas paid Enmark & Supermill millions of dollars pursuant to these invoices; and Mr. Haas then took business deductions for “cost of goods sold.” Attachment A also indicates that Enmark and Supermill eventually returned the millions, (less a 2% kick back fee), to Mr. Haas through Mr. Haas’ intermediary, CNC Associates, Inc. Stated differently, it seems that Enmark, Supermill and CNC Associates could have been employed as laundering links in a money laundering circuit. After Mr. Haas’ plea agreement, Mr. Haas was sentenced on November 5, 2007 to two years in prison for violating 18 U.S.C § 371. Mr. Haas additionally paid a $5 million dollar fine and over $70 million dollars in back taxes owed for 2000 and 2001.

¹ See p.4 at “Trade-Based Money Laundering,” Copyright © FATF/OECD. All rights reserved.

Image: Nomad_Soul/Shutterstock.com

Copyright 2007-2016 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

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.

Imagefile404/Shutterstock.com

This 30th post in the “Divorce & Hidden Money” series highlights a RICO lawsuit Helga Glock commenced in 2014. The lawsuit alleges Glock pistol inventor Gaston Glock initially hid assets via shell companies supplied by Charles Ewert—a resident of Luxembourg known as Panama Charly.

Moneylaundering.com’s Editor-in-Chief Kieran Beer says at his April 11th article, that the Panama Papers represent “an unparalleled look at the…abuse of shell companies, in this case those created by Panama-based law firm Mossack Fonseca.” ¹ Like Mossack Fonseca, Charles Ewert was in the business of forming shell companies. Although based in Luxembourg, Charles Ewert was reportedly called Panama Charly because of the large number of shell companies he had formed in Panama. Charles Ewert is also one of the defendants at Helga Glock’s RICO lawsuit against her ex-husband gunmaker Gaston Glock.

The Court’s docket report shows that last month Helga Glock filed her proposed Second Amended Complaint, (“the Proposed Complaint”), in the RICO lawsuit. The Proposed Complaint asserts that Charles Ewert had supplied Gaston Glock with Panamanian shell company Reofin International S.A. The Proposed Complaint seems to basically allege that Reofin & other shell companies were used as laundering links to conceal assets in a money laundering circuit. It also seems to basically claim that assets belonging to Helga Glock were supposedly hidden from her through: lawyers; sham loans; trade-based money laundering via false invoices &/or leases.

According to allegations at the Proposed Complaint, Charles Ewert, Glock, Inc. & others were members of an alleged RICO enterprise led by Gaston Glock. The Proposed Complaint says that one goal of the alleged RICO enterprise was to deprive Helga Glock of her assets. It claims that Helga Glock detected this alleged scheme in 2011, because of her divorce from Gaston Glock & her ouster from one of Gaston Glock’s companies. Helga Glock apparently filed the Proposed Complaint to search for & recover assets Gaston Glock supposedly hid during the couple’s marriage. Earlier Asset Search Blog posts discussing Helga & Gaston Glock are “Helga Glock’s Search For Gaston Glock’s Assets” & “Helga Glock Claims Gaston Glock Started Concealing His Assets.”

¹Moneylaundring.com’s Webpage, “From The Editor: Will Panama Papers Give Governments New Backbone for Transparency?” Web. Last Viewed May 4, 2016.

Photo: NSC Photography/Shutterstock.com

Copyright 2016 Fred L. Abrams