Photo Of A Whistle


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


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.


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

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If someone is hiding assets, you might detect the assets by reviewing: corporate records; patents & trademarks; court papers; U.C.C. filings; real estate documents; or through additional basic research.  “A Low-Cost Asset Search” gives information about how to perform basic research.  Although basic research can lead to a good result, it may not help you identify assets hidden through a complex concealment scheme.

The complex schemes might be facilitated by gatekeepers such as lawyers, accountants, officers, directors, etc.  The following details how a lawyer concealed assets with his organized crime client “Mr. M”, in a money laundering scheme:¹

Complex concealment schemes can among other things, also involve fraudulent asset transfers to third-parties & the placement of assets offshore.  To try to locate assets concealed by such schemes, it may be necessary for you to pursue your legal remedies & retain private investigators.  Legal remedies range from civil proceedings brought to attach bank accounts to employing criminal law tools. “An Asset Search In Geneva” lists these remedies for locating & recovering assets hidden at Swiss banks.  These remedies are not just limited to seeking assets at Swiss banks, as similar remedies are available in many countries around the world.

In addition to the use of legal remedies, private investigators can have an important role in asset search or recovery cases.  An investigator in one asset recovery case is described at the article “Private Investigators: An Asset Search By Pursuing Interviews & Tips.”  It highlights an effort to gather human intelligence about a divorcing husband thought to have hidden marital assets and committed tax fraud.  More articles featuring private investigators are: “An Asset Search In Switzerland”, “Following The Money Trail In Zurich” & “Fighting Financial Fraud At UK Banks.”

¹Case 08012, Courtesy of The Egmont Group

First Image: Davi Sales Batista/

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.”


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.


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/

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/

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

Copyright 2008-2015 Fred L. Abrams

Puzzle Money PhotoTo cheat you out of your fair share, your divorcing spouse, a business partner, an executor handling a decedent’s estate or someone else may hide assets from you.  As a result of an asset search or other investigation you might uncover a money trail for these hidden assets.

If you follow the money trail & locate the assets, how do you then recover them?  One way could be through a settlement with those hiding the assets from you.  You might also be able to recover the assets by pursuing available legal remedies.

These remedies sometimes include proving to the Court that assets were hidden from you through nominees (i.e. intermediaries); fraudulent transfers; &/or trusts.  To recover assets hidden these ways, you may have to demonstrate the following to the Court:

I.  NOMINEE OWNERSHIP —‘A nominee is one who holds bare legal title to property for the benefit of another.’ In re Callahan, 442 B.R. 1, 5 (D. Mass. 2010) (quoting Black’s Law Dictionary 1076 (8th ed. 2004)).  A true beneficial owner can easily hide assets by employing a nominee to make purchases &/or hold assets.  To recover these assets you may have to prove nominee ownership by showing that the owner transferred assets in anticipation of a lawsuit; that the assets were transferred to the nominee although the nominee did not pay for them; etc.  See e.g., Fourth Inv. LP v. United States, 720 F.3d 1058, 1070 (9th Cir. 2013) (six-part test for nominee ownership applied to tax lien case).

II.  FRAUDULENT TRANSFERS—If there were badges of fraud when an asset was transferred, you might be able to recover the asset on the ground it was fraudulently transferred.  The badges are used to prove fraudulent intent or an intent to hinder creditors.  A fraudulent transfer is marked by the badges when assets are transferred in anticipation of a lawsuit or liability; when assets are transferred even though there is inadequate or no payment for them; etc.  The badges are listed at Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (2d Cir. 1983) and additional cases discussing them are at “Badges Of Fraud In Debt Collection, Divorce & Bankruptcy.

III.  TRUSTS—IRS Talking Points say that trusts can be misused “[t]o depreciate personal assets (such as a home)”; “[t]o deduct personal expenses”; “[t]o split income over multiple entities…”; “[t]o underreport income”; “[t]o avoid filing returns”; “to wire income overseas and fail to report it”; & “[t]o attempt to protect transactions through bank secrecy laws in tax haven countries.”  If a trust is abused in these kinds of ways to hide assets, assets could conceivably be recovered from the trust.

Depending on the circumstances, you may recover trust assets by claiming the trust is only a nominee owner; or by claiming that assets were fraudulently transferred to the trust.  It may also be possible to recover assets by piercing the trust veil on an alter ego theory.  The gravamen of this claim would be that the individual hiding assets at the trust & the trust were inseparable.  See United States v. Evseroff, No. 00-CV-06029 KAM, 2012 WL 1514860, (E.D.N.Y. Apr. 30, 2012) aff’d, 528 F. App’x 75 (2d Cir. 2013) (trust assets subject to collection/can be reached under nominee ownership, fraudulent conveyance and alter ego theories).

Image courtesy of Flickr (Licensed by) Images Money/Images_of_Money

Photo Of A Red Flag

If a divorcing spouse hides marital assets there usually are red flags.  Red flags are also often found when assets have been hidden by tax fraudsters, Ponzi schemers, bankruptcy debtors, money launderers & narco-traffickers.  This 16th post in the “Divorce & Hidden Money ” series examines the red flags.

Red flags indicating assets might have been hidden are listed at my post “Locating Hidden Assets By Spotting The Red Flags.”  The list describes 18 red flags including the use of: multiple jurisdictions, sham trusts, bulk-cash smuggling, etc.  In addition to the 18 on the list, below are 6 more red flags of asset concealment.  The 6 red flags or money laundering indicators were published by the Egmont Group, an international organization which fights money laundering and terrorist financing.¹   Even though some of them discuss criminals or laundering, the 6 red flags might be used to help locate assets hidden by a divorcing spouse:

Laundering Indicators:Red Flags

¹Six Money Laundering Indicators Courtesy Of The Egmont Group, “100 Cases From The Egmont Group”, p. 172, Appendix A: Most Frequently Observed Indicators.

First Image courtesy of Flickr (Licensed by DBduo Photography/Daniel R. Blume

Copyright 2015 Fred L. Abrams

This post describes a case in which illicit drug monies were concealed offshore and laundered via a Cayman Island bank account.  The case is also about tax fraud; identity theft and a murder.   I published the post earlier at the Asset Search Blog and have used the post as a handout at many of my speaking engagements.  It is an example of how financial fraudsters can operate.  Some of the facts below have been changed/sanitized for privacy reasons.  The following occurred over a four month period during 2002:


As part of his tax fraud, “Mr. Wallace” contacted a Cayman Island bank by mail in order to open a personal account with it.  He mailed account opening documents to it which included a copy of his U.S. passport and also supplied the names of references. According to these documents, Mr. Wallace lived in Miami and was a real estate developer.  Based upon all of the foregoing, the Cayman Island bank opened Mr. Wallace’s personal account with a “O” balance.  Just six days later however, bank “X” in Panama wired $6.3 million to Mr. Wallace’s Cayman account without any mention of the remitter.

Mr. Wallace then went on a business trip to Central America for several months; so he rented his Miami home to “Chuck”.  Although Mr. Wallace hadn’t known at the time, Chuck was a small-time crook.  In fact, soon after Chuck took possession of Mr. Wallace’s home, Chuck started stealing Mr. Wallace’s mail.  One of the letters Chuck had stolen was written by “Bob”, a personal banker from the Cayman Island bank where Mr. Wallace maintained his account.  Bob had written to Mr. Wallace about a lucrative investment opportunity.


Surmising from Bob’s letter that Mr. Wallace had a sizable bank account, Chuck wrote to Bob pretending to be Mr. Wallace.  As the sanitized copy of Chuck’s First Letter partly demonstrates, Chuck had assumed Mr. Wallace’s identity in that particular letter by forging Mr. Wallace’s signature.  To comfort Bob, Chuck’s First Letter had also asked Bob for the minimum balance required to keep Mr. Wallace’s account open. Chuck’s “softening up” letter further suggested to Bob that Mr. Wallace’s funds might soon be needed “at very short notice” for an alleged real estate deal in Mexico.  In the sanitized copy of Chuck’s Second Letter, Chuck again pretended to be Mr. Wallace as he wrote to Bob at the Cayman Island bank.  In his Second Letter, Chuck directed the wire transfer of Mr. Wallace’s funds from the Cayman Island bank to Chuck’s own bank account in Mexico. Continue Reading A Case of Tax Fraud, Identity Theft & Murder

My January 13th post notes that divorcing spouses can employ nominees, (i.e. intermediaries), to secretly purchase property, conceal bank accounts, etc.  Prosecutors claimed Attorney Orion Douglas Memmott similarly used nominees to hide assets from the IRS.  Mr. Memmott’s 2010 superseding indictment asserted Mr. Memmott hid assets from the IRS by “placing real property in the names of nominees…” It charged him with attempted tax evasion (26 U.S.C. § 7201) and perjury/false statements (26 U.S.C. § 7206 (1).  Prosecutors alleged Mr. Memmott hid real estate titled in the name of Mr. Memmott’s nominee, his ex-wife Sheila Enos-Boyd.  Mr. Memmott was found guilty of these charges and on December 15, 2014, the Court sentenced him to 18 months of prison.


A) Nominees

In addition to hiding real estate through his nominee, prosecutors accused Mr. Memmott of embezzling hundreds of thousands of dollars from law firm clients and friends.  One of Mr. Memmott’s victims was Merrill Osmond, lead singer of the world famous Osmond family.  Mr. Memmott is believed to have embezzled $60,000 from Mr. Osmond.  Another victim was Ms. Ranelle Wallace, who was left homeless by Mr. Memmott because he reportedly embezzled $37,000 from her.  Prosecutors claimed Mr. Memmott hid these and other funds he embezzled, in business bank accounts belonging to his nominees.  Mr. Memmott’s suspected use of nominees to conceal assets, was just one red flag of fraud in his case.  Other red flags were: Mr. Memmott’s claim at his June 9, 2005 IRS Form 433-A, that he had no bank accounts; Mr. Memmott’s alleged use of back-dated promissory notes; and Mr. Memmott’s suspected use of a business bank account instead of a trust account.

B) Mr. Memmott’s June 9th 433-A Form

Click Here for the June 9th 433-A Form¹

When the IRS determined that Mr. Memmott owed about $655,555 in unpaid personal federal income taxes for years 1993-1999, it assigned IRS Revenue Officer Miller to search for Mr. Memmott’s assets.  On June 9, 2005 Officer Miller had Mr. Memmott execute an IRS Form 433-A, Collection Information Statement.  At this June 9th Form, Mr. Memmott indicated he had no personal bank accounts.  This was a red flag for Officer Miller who testified at Mr. Memmott’s trial that: “I just found it very odd that the defendant was an attorney, a businessman, he was receiving Social Security, but he had no personal bank accounts. So that was kind of an indicator of fraud for me because it just was so out of the ordinary to have someone of that stature not have a personal bank account.”   Continue Reading Red Flags & The IRS Search For Attorney Memmott’s Assets