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

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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Attorney Terry Christensen was convicted along with private investigator Anthony Pellicano on August 29, 2008, as reported by The New York Times and The Wall Street Journal Law Blog.  According  to the criminal minutes from his trial, Mr. Christensen had been found guilty of his two-count indictment for violating 18 U.S.C. 371 (Conspiracy) and 18 U.S.C. 2511 (1) {a}  & {d} (Interception of Wire Communications). 

 

While representing billionaire investor Mr. Kirk Kerkorian in a child support case, Mr. Christensen had used an illegal wiretap to undermine Mr. Kerkorian's adversary-- Ms. Lisa Bonder Kerkorian.  As fully described at pages 15-17 of the government's Trial Memorandum, Mr. Christensen had telephoned Mr. Pellicano on March 18, 2002 and authorized the illegal wiretapping of Ms. Kerkorian's phone.  The wiretap ended on or about May 16, 2002 and had enabled Mr. Christensen to even eavesdrop on Ms. Kerkorian's privileged conversations with her attorneys.

 

Mr. Christensen's wiretap conviction could change how some attorneys interact with private investigators who perform background checks; asset searches; or other tasks.  As suggested by The Los Angeles Times article "Wiretap trial sheds light on lawyers' work with private eyes", Mr. Christensen's conviction might make attorneys more cautious in their dealings with private investigators.  In discussing Mr. Christensen's conviction, an FBI spokesperson also said in a press release: "This case uncovered corruption by the wealthy and influential and today's guilty verdicts render assurance that the justice system cannot be bought by those with money and power." 

 

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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Privacy and other federal laws generally prohibit pretexting, (the use of false pretenses), when contacting a U.S. bank, phone company or government agency for confidential information.  One example of pretexting would be using a false identity while phoning a bank to elicit a bank customer's personal account information.  If an information broker, private investigator, etc. pretexts during an asset search, some of the following federal statutes might possibly apply:

• 15 U.S.C. § 45 (Unfair methods of competition unlawful; prevention by Commission):  By relying on both 15 U.S.C. §45 and 15 U.SC. § 53 (False advertisements; injunctions and restraining orders), the Federal Trade Commission can sue pretexters for fraudulent, deceptive and unfair business practices.

• 15 U.S.C. § 6801 et. seq. (the Gramm-Leach-Blilely Act): makes it illegal to access private information by making pretext phone calls to a financial institution or its customers.  As my post "The Gramm-Leach-Bliley Act & An Asset Search" further explains, 15 U.S.C. § 6821 also prohibits the use of false documents to obtain private customer information.

• H.R. 4709, 109th Congress (2006) (Telephone Records and Privacy Protection Act of 2006):  This statute generally prohibits telephone record pretexting and the sale of illegally acquired telephone records.

• 18 U.S.C. § 1028 (Fraud and related activity in connection with identification documents, authentication features, and information):  Both this statute & 18 U.S.C. §1028A. (Aggravated identity theft), prohibit a broad range of frauds in connection with identification documents.

• 18 U.S.C. § 1341 (Frauds and swindles): Covers frauds which use U.S. mail.  It and 18 U.S.C. § 1343 (Fraud by wire, radio, or television), are the ubiquitous federal fraud statutes.

• 26 U.S.C. § 7213 (Unauthorized disclosure of information): Prohibits the unauthorized inspection or disclosure of U.S. tax returns or return information.   Subsection (a) (4), entitled "Solicitation", expressly covers the illegal sale and /or illegal receipt of tax return information.

• 42 U.S.C. § 1307 (Penalty for fraud): Among other things, covers misconduct like eliciting social security numbers through pretext calls to the U.S. Social Security Administration.

•  47 U.S.C. § 222 (The Telecommunications Act of 1996):  Section (c) (2) of this Act generally prohibits telephone record disclosure absent  "...affirmative written request by the customer, to any person designated by the customer".

One who pretexts in violation of the foregoing statutes, may face a Federal Trade Commission lawsuit or even criminal indictment.  In Federal Trade Commission v. Action Research Group, Inc. et. al. for example, information brokers ended up stipulating to a final order which permanently enjoined them from telephone record pretexting.  In Federal Trade Commission v. Victor L. Guzzeta d/b/a Smart Data Systems, yet another information broker stipulated to a final judgment, which similarly enjoined him from financial record pretexting.


In the U.S. District Court in Tacoma however, Mr. and Mrs. Torrella are being criminally prosecuted for their pretext calls to the I.R.S., Social Security Administration, pharmacies, medical offices and various state labor departments.  According to their indictment, the Torrellas made the pretext calls while performing asset searches and other services for the private investigators who are their co-defendants. 


The Torrellas and /or their co-defendants are charged with Conspiracy and violating many of the above-cited federal statutes: 18 U.S.C. § 1343 (Wire Fraud); 42 U.S.C. § 1307 (Penalty for Fraud); 26 U.S.C. § 7213 (Unauthorized  Disclosure of Information); and 18 U.S.C. §1028A (Aggravated Identity Theft).  Based on their May 20, 2008 plea agreements, both Mr. and Mrs. Torrella await sentencing.  According to a September 3, 2008 entry in their docket report, said sentencing has been scheduled by U.S. District Court Judge Ronald B. Leighton for February 13, 2009.

(Last Edited 11/3/08)

Copyright 2008 Fred L. Abrams

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The Gramm-Leach-Bliley Act (GLBA) at 15 U.S.C. § 6801 et. seq., protects the privacy of customers who provide information to U.S. financial institutions.  Although there are some important exceptions mentioned at 15 U.S.C. §6821(c) - (g), GLBA restricts access to  "nonpublic personal information" like bank account numbers, account balances, etc.  In some cases, GLBA can therefore act as a bar to an asset search at a financial institution.


At 15 U.S.C. §6821, GLBA specifically protects personal information at U.S. financial institutions by outlawing pretexting.  This means for example, that it is illegal to make false statements to a bank customer or a bank in order to access protected personal information.   Submitting false documents to a bank, (to obtain the protected information), is also illegal pursuant to 15 U.S.C. § 6821.  Soliciting a person to use false pretenses to access the protected information at a bank, is also prohibited.


Violating GLBA is punishable pursuant to 15 U.S.C. § 6823 by a criminal fine or imprisonment of up to five years.  In aggravated cases, fines may also be doubled and imprisonment can be for up to ten years.  As NXIVM Corp. vs. Rick Ross, U.S. District Court, District of New Jersey, Index # 06-CV-01051 demonstrates, a GLBA violation can however, also be alleged in a civil court case.  Although the NXIVM case was commenced as a trademark / copyright violation claim against Mr. Rick Ross, Mr. Ross filed a Verified Counterclaim alleging that NXVIM had illegally obtained his bank and other private information by hiring Mr. Juval Aviv of the Interfor private investigation firm.


According to allegations at page 8, paragraph 27of the Verified Counterclaim, Mr. Aviv had bribed a Fleet Bank employee to access Mr. Ross's personal bank information.  The Counterclaim alternatively alleged that Mr.Aviv had engaged in pretexting to illegally acquire the Fleet Bank information.  Mr. Aviv however, has denied any wrongdoing In his November 7, 2007 Reply filed with the Court.  As of the time of this writing, the foregoing claims have not yet been fully adjudicated by the Court.


Copyright 2008 Fred L. Abrams

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