Similar to my program “Searching For Hidden Assets”, this video discusses methods for hiding assets by laundering them.

I will present my program “Searching For Hidden Assets” at the 20th Fraud & Forensic Accounting Conference hosted by Louisiana State University’s Department of Accounting. This annual conference will be held July 24-25, 2025 in Baton Rouge, Louisiana. Furthermore, Searching For Hidden Assets will be the first program at the two-day conference, after the dean’s opening remarks at the conference.

A) AN INTRODUCTION TO HIDING ASSETS BY LAUNDERING THEM

Searching For Hidden Assets covers ways vast sums of money and other assets can be hidden by individuals ranging from high-net-worth divorcing spouses to terrorist financiers. During this program, I highlight the common asset concealment methods by giving examples from my case files. Additionally, I discuss how true beneficial owners may hide their assets by washing them through offshore bank accounts, shell companies, nominees, trusts, etc. In other words, I explain ways these elements can be used as laundering links in a money laundering circuit. What does a full-blown money laundering circuit look like? A chart showing one is available here. Moreover, the chart is explained by the Canadian governmental authority FINTRAC, at its webpage.

B) SEARCHING FOR HIDDEN ASSETS: A BROAD RANGE OF ISSUES

Additionally, I will talk about a broad range of asset concealment issues. Some of these issues are:

  1. An Asset Search For Money Trails.
  2. Recognizing The Red Flags of Asset Concealment.
  3. Collecting Human Intelligence From Tipsters / Whistleblowers During An Asset Search.
  4. Possible Criminal Law Violations From Hiding Assets (Tax Fraud, Wire Fraud, Money Laundering, etc.).
  5. Illegal Asset Searches Arising Out Of Identity Theft, Computer Hacking, etc.
  6. 5 Things To Be Aware Of When Hiring A PI For A Bank Account Search.
  7. Legal Tools Available For Detecting Hidden Assets & /or Asset Recovery, (Letters Rogatory, The Uniform Interstate Depositions And Discovery Act), etc.
  8. Competing Claimants That May Hamper Your Asset Search.

Video Courtesy of The Egmont Group of Financial Intelligence Units

Copyright 2024 Fred L. Abrams

Since Mr. Jack Stephen Pursley’s tax evasion case showed methods for hiding assets, I discussed his case at my August 16, 2020 post . Then on January 12, 2022, The U.S. Court of Appeals vacated Mr. Pursley’s criminal conviction. Meanwhile, on March 28, 2023 Mr. Pursley pleaded guilty to Count One of his September 20, 2018 indictment. Today’s post discusses Count One.1 Based on Count One, there were two tax evasion schemes in USA v. Pursley. The first scheme started in 2001 while the second one was carried out from 2007-2013.

I. CO-CONSPIRATOR 1’S METHODS FOR HIDING ASSETS STARTING 2001

Co-Conspirator 1 was a U.S. taxpayer with earnings from his offshore business, Southeastern Shipping Company Limited, (hereinafter “SSCL“). SSCL supplied workers for oil rigs in the Middle East. Co-Conspirator 1 first formed SSCL as a business in Nevis and Panama. Next, in 2001, Co-conspirator 1 established SSCL on the Isle of Man. In 2001, Co-Conspirator 1 also apparently started hiding earnings from SSCL. According to the indictment, Co-Conspirator 1 hid the earnings from the IRS in an offshore account at the Royal Bank of Scotland on the Isle of Man. Moreover, Co-Conspirator 1 employed a Brazilian citizen as the straw owner, (i.e. nominee owner), of SSCL. This hid Co-Conspirator 1’s beneficial ownership of SSCL.

Co-Conspirator 1 also formed a suspected shell company in Texas known as Hudson International Management Group, LLC. It issued Co-Conspirator 1’s invoices showing Co-Conspirator 1’s supposed annual income, which Co-Conspirator 1 did pay taxes on. This might have provided Co-Conspirator 1 with a cover story that Co-Conspirator paid all required taxes. Meanwhile, Co-Conspirator 1 reportedly evaded paying taxes on most of the earnings hidden at SSCL’s offshore Royal Bank of Scotland account. Additionally, Co-Conspirator 1 failed to file foreign bank account reports, (“FBAR reports), with U.S. Treasury about the Royal Bank of Scotland account. Nor did Co-Conspirator 1 disclose this account as required, at annual tax filings.

Based upon the foregoing and the allegations at Count One, Co-Conspirator 1 reportedly headed a tax evasion scheme which relied on these methods:

  • a straw person, (i.e. nominee), who was a Brazilian citizen;
  • multiple jurisdictions such as the Isle of Man, Brazil and Texas;
  • an offshore bank account on the Isle of Man;
  • and shell companies.

II. MR. PURSLEY’S TAX EVASION SCHEME FROM 2007-2013

In 2007 Co-Conspirator 1’s offshore Royal Bank of Scotland account was valued at $18 million. Seeking to secretly transfer the $18 million to the United States, Co-Conspirator 1 asked Mr. Pursley for help. Consequently, Mr. Pursley devised ways Co-Conspirator 1 could send this money to the U.S. while hiding it from the IRS. In exchange for Mr. Pursley’s help, Mr. Pursley charged Co-Conspirator 1 $4.8 million and a 25% ownership interest in Co-Conspirator 1’s business. One of Mr. Pursley’s methods for hiding assets was transferring money from SSCL’s offshore Royal Bank of Scotland account to a Houston, Texas-based attorney. The Houston attorney then deposited the monies into an attorney client trust account, (i.e. IOLTA Account), at Wells Fargo. Between August 2009 and September 2010 Mr. Pursley could have hidden / laundered as much as $15 million via the IOLTA Account. Mr. Pursley’s other methods for hiding assets included employing:

  • Offshore bank accounts like SSCL’s Royal Bank of Scotland account on the Isle of Man;
  • a shell company in Australia, and several in Texas and other jurisdictions;
  • stock purchases in U.S-based shell companies as a pretext for transferring money;
  • bank accounts titled in the names of intermediaries (a.k.a nominee bank accounts).
  • 3 Houston, Texas-based attorneys who were gatekeepers.
  • and multiple jurisdictions including the Isle of Man, Australia and the U.S.

  1. Count One charged Mr. Pursley with Conspiracy To Defraud the United States (18 U.S.C. Section 371). Counts Two, Three & Four charged Mr. Pursley with Tax Evasion (26 U.S.C. Section 7201 ↩︎

Video: FlicStock / Istock.com

Copyright 2024 Fred L. Abrams

USA v. Trahan was about the criminal prosecution of former FBI Special Agent, Gregory Paul Trahan. During Mr. Trahan’s divorce, Mr. Trahan hid bank accounts and cash from his wife. Mr. Trahan also helped a person in another divorce, hide community property / cash. In furtherance of Mr. Trahan’s scheme to hide community property, Mr. Trahan withdrew several hundred thousand dollars from bank accounts.  Mr. Trahan made these withdrawals in cash, with each withdrawal below $10,000.  From about 2018-2019, Mr. Trahan concealed part of this cash by making 20 cash deposits totaling $77,900 into secret bank accounts. Like Mr. Trahan’s cash withdrawals, Mr. Trahan’s 20 cash deposits were each under $10,000.

Mr. Trahan kept his deposits and cash withdrawals below $10,000 because Mr. Trahan knew if he deposited or withdrew $10,000 or more in cash, his banks would report him to the U.S. Financial Intelligence Unit FinCen. The banks would do this by filing Currency Transaction Reports about Mr. Trahan.  Meanwhile, Mr. Trahan’s “structuring” of cash deposits or cash withdrawals, (to stop banks from filing Currency Transaction Reports), constituted a crime as set forth at 31 U.S.C. Section 5324 (Structuring transactions to evade reporting requirement prohibited).

Mr. Trahan also stashed cash in family residences. Stashing large sums of cash can sometimes be an indicator of bulk cash smuggling. Furthermore, Mr. Trahan had hidden money in a nominee bank account.  This basically meant Mr. Trahan hid cash by transferring it to a bank account titled in the name of Mr. Trahan’s strawperson / intermediary. On October 19, 2023 Mr. Trahan was charged with structuring via his criminal information. Then, on November 1, 2023 Mr. Trahan pleaded guilty to one count of structuring. The Court sentenced Mr. Trahan on March 4, 2024. Mr. Trahan was sentenced to five years probation and a $100,000 fine.

For some general information about the common concealment methods Mr. Trahan apparently employed, click on the following links:

Image: calcassa / Istock.com

Copyright 2024 Fred L. Abrams

Table 1 partly shows that 2 shell companies were allegedly used by Congressman Henry Cuellar and / or his wife Imelda Cuellar, to wash $360,000 in suspected bribe payments.1

On 4/30/24 Congressman Henry Cuellar and his wife Imelda were indicted in USA v. Cuellar. According to their indictment, the two supposedly laundered $600,000 in bribe payments which Congressman Cuellar allegedly received. Consequently, Congressman Cuellar and Mrs. Imelda Cuellar, are now the subjects of a criminal prosecution for their supposed public corruption scheme. The two are accused of taking the bribes from a bank headquartered in Mexico City and from an oil and gas company owned by the Government of Azerbaijan. Their indictment claims, in exchange for bribe payments, Congressman Cuellar allegedly agreed to use his office to influence U.S. foreign policy in favor of the Mexican bank and Azerbaijan.

Moreover, page 3 paragraphs 6-9 of the indictment mentioned “Relative-1”, “Shell Company 1”, “Shell Company 2” & “Shell Company 3”. Based on my research, I suspect that “Relative-1” referred to one of the Cuelllar’s daughters, Ms. Christina Cuellar. I also suspect “Shell Company 1”, “Shell Company 2” & “Shell Company 3” respectively referred to these Texas-based entities: Irc Business Solutions LLC, Global Gold Group LLC & Obsidian Ora, LLC.

A 5/3/24 press release about Congressman Cuellar’s and Mrs. Imelda Cuellar’s indictment, described how these two could have hidden the suspected bribe payments:

[t]he bribe payments were allegedly laundered, pursuant to sham consulting contracts, through a series of front companies and middleman into shell companies owned by Imelda Cuellar, who performed little to no legitimate work under the contracts [emphasis added].

U.S. Department of Justice Press Release, dated 5/3/24

According to their indictment, Congressman Cuellar & / or Mrs. Imelda Cuellar might have used the supposed “sham consulting contracts” to issue phony invoices to the bribe payers. The bribe payers may have paid the phony invoices by making their alleged bribe payments to a “middleman” acting on behalf of Congressman Cuellar and / or Mrs. Imelda Cuellar. These two could have possibly employed the “middleman”, (i.e. a nominee), to help disguise the true origins of their suspected bribe payments.

Additionally, Congressman Cuellar & / or Mrs. Imelda Cuellar are thought to have transferred $360,000 in bribe payments into nominee bank accounts apparently related to Mrs. Imelda Cueller. I suspect these nominee bank accounts could have been titled in the names of the shell companies, Irc Business Solutions LLC & / or Global Gold Group LLC. Moreover, paragraph 85, page 37 of their indictment, also suggests Congressman Cuellar and / or Mrs. Imelda Cuellar commingled $17,800 in suspected bribe payments with legitimate monies they maintained in two joint bank accounts.

If the allegations at their indictment are actually true, then Congressman Cuellar & / or Mrs. Imelda Cuellar could have hidden money / washed the suspected bribe payments via:

  1. Table 1, is from p. 13 of the Cuellar’s 4/30/24 indictment. ↩︎

Copyright 2024 Fred L. Abrams

Structuring cash, (a.k.a. smurfing), is one thing to look for when spouses hide money during their divorces in community property states. US Treasury Department’s FinCEN explains structuring occurs if you “break up…currency transactions [at banks] into multiple, smaller amounts to avoid being reported to the government.”1 This means organizing cash transactions beneath the $10,000 threshold banks have to file a Currency Transaction Report with FinCEN. Furthermore, structuring can involve: cash deposits, cash withdrawals, exchanges of currency, currency from a foreign country, etc. Structuring is also a federal crime as set forth at 31 U.S.C. Section 5324.

USA v. White involved the prosecution of a divorcing husband who hid money from his wife in a scheme involving structuring. In USA v. White, Paul A. White apparently hid $99,900 in cash from his wife at the time of their 2017 Nebraska divorce. Mr. White accumulated this cash in 2016 by selling firearms, military memorabilia and other goods. Mr. White who was an Alcohol, Tobacco, Firearms & Explosives Bureau Special Agent, hid the cash in a safe at his Omaha, NE office. Meanwhile, Mr. White was obligated to disclose the $99,900 to his wife during the couple’s divorce. This was true, even though Nebraska is not one of the community property states.

After Mr. White’s divorce was finalized in 2018, Mr. White structured the $99,900 by making deposits in smaller amounts at UMB and another bank. From October 29, 2018 to February 26, 2019, Mr. White divided the $99,900 into 14 cash deposits, each below $10,000. Since the deposits were below $10,000, the banks did not report Mr. White to FinCEN by filing Currency Transaction Reports. Mr. White admitted to the foregoing at his September 14, 2021 plea agreement. During Mr White’s allocution at his September 14, 2021 Change of Plea Hearing, the Court and the federal prosecutor asked Mr. White about his above-mentioned structuring scheme. To listen to Mr. White’s September 14th allocution, click the play button on the player available here.

1FinCEN’s Educational Pamphlet on the Currency Transaction Reporting Requirement

Video: AndreyPopov / iStock.com

Copyright 2023 Fred L. Abrams

If you are in a high net worth divorce, your spouse might hide community property from you by misusing:

These are just three of the common money laundering methods. Although not a high net worth divorce case, filings in Brooklyn Federal Court in USA v. Ahmad reveal how one might use the three methods to hide assets. As set forth at an April 18, 2019 press release, the U.S. Government had placed Mr. Ahmad on a sanctions list for reportedly funding Hezbollah terrorists. Once Mr. Ahmad was on the list, trade with Mr. Ahmad was blocked and he was subject to economic sanctions.

Meanwhile, Mr. Ahmad’s March 29, 2023 indictment in USA v. Ahmad, claims Mr. Ahmad and eight co-defendants had evaded the sanctions. They allegedly did this by smuggling art and diamonds in a money laundering circuit. Moreover, Mr. Ahmad reportedly carried out the money laundering scheme through the multiple jurisdictions shown by this chart:1

Mr. Ahmad’s alleged use of multiple jurisdictions would have made it harder to detect Mr. Ahmad’s suspected laundering scheme. Additionally, prosecutors in USA v. Ahmad seek to forfeit more than 482 diamonds which are described here. As part of their asset recovery strategy, prosecutors are also trying to forfeit over 100 pieces of artwork. One of the 100 includes the painting by Nigerian artist Luke Agada, shown at the top of this blog post.2

1Chart courtesy of U.S. Department of Treasury Office of Foreign Assets Control.

2Luke Agada painting reproduced from p. 30 of Mr. Ahmad’s indictment and mentioned at the April 19, 2023 ARTnews article “US Prosecutors Say Art Collector Financed Hezbollah and Violated Sanctions, Dealing Art and Diamonds Totaling $440 M.“

 

Hunter Biden allegedly used shell companies & the diamond at this chart, in a supposed corruption scheme.*

As was widely reported, The U.S. House Committee on Oversight and Accountability, (“the Committee”), published its August 9th memo about Hunter Biden and some other Biden family members. On the one hand, House Republicans on the Committee allege President Biden, Hunter Biden and some other Biden family members participated in an influence peddling scheme. On the other hand, House Democrats allege President Biden has never done anything wrong. However, as set forth below, there could be money laundering indicators in this case, especially with respect to Hunter Biden.

A) WHAT HOUSE REPUBLICANS ALLEGE

At the Committee’s August 9th & / or its earlier materials, House Republicans essentially allege the following. First, years ago foreign actors from China, Russia, Ukraine, Romania and Kazakhstan supposedly paid tens of millions of dollars in bribes to some Biden family members. Second, foreign actors may have made the supposed bribe payments because they thought Joe Biden would do them favors during his vice presidency. Third, Hunter Biden and some of his business associates might have concealed these payments by transferring them into shell companies. Fourth, page 28 of the Committee’s May 10th memo suggests one alleged bribe payment could have been a 2.8 carat diamond worth about $80,000, which a foreign actor gave to Hunter Biden.

B) COUNTERARGUMENTS BY HOUSE DEMOCRATS

House Democrats basically claim Congressional Republicans have not supplied evidence showing President Joe Biden participated in a corruption scheme. ‘Instead, they rehash the same Hunter Biden business dealings that Congressional Republicans identified at least three years ago,’ the ranking Democrat on the Committee Maryland Rep. Jamie Raskin said. Rep. Raskin’s quote is mentioned by the August 9, 2023 ABC News article House GOP releases new memo on Hunter Biden’s foreign business dealings, reviving old claims. Additionally, this article points out that President Joe Biden has denied he was involved in Hunter Biden’s business dealings.

C) COULD HUNTER BIDEN HAVE ENGAGED IN MONEY LAUNDERING?

Assuming, arguendo, some of President Biden’s family members participated in a corruption scheme, then money laundering must be considered. People facilitate laundering schemes to hide their true beneficial ownership of money. Furthermore, when people launder money, there are usually red flags. Speaking hypothetically, the money laundering red flags concerning Hunter Biden and possibly other Biden family members could be:

  • Politically Exposed Person(s)— are individuals more susceptible to bribery because of their position or influence. Close business associates and relatives of these individuals are also considered politically exposed persons. Under this definition, President Biden’s son Hunter and other close relatives are politically exposed persons.
  • Shell Companies—in some places, a money launderer can form a shell company without disclosing who its shareholders, officers and directors are. The launderer might use the shell company to open bank accounts and then hide money there. Meanwhile, some Biden family members and / or their associates allegedly formed to 20 shell companies.
  • Multiple jurisdictions—you can launder money by transferring it through multiple jurisdictions / across international borders. This makes the money harder to track. In this case, Hunter Biden and others could have received payments transferred to the U.S. from China, Russia, Ukraine, Romania and Kazakhstan.
  • Portable Valuable Commodities—to obscure beneficial ownership, a money launderer can convert cash into diamonds, jewelry, precious metals, etc. These portable valuable commodities are relatively easy to smuggle across international borders. As mentioned above, a foreign actor my have given Hunter Biden a 2.8 carat diamond, possibly as a bribe payment.

*Chart courtesy of U.S. House of Representatives Committee on Oversight & Accountability, May 10th Memorandum, at pp. 35.

Copyright 2023 Fred L. Abrams

During your divorce you may need to search for community property your spouse hid in secret bank accounts.1 If your asset searches & / or bank searches show your spouse hid community property, you may need to prove this in Court. If so, there are pitfalls you can avoid which are discussed below. I have seen these pitfalls as a lawyer with over 33 years of experience and hope you benefit from this post about them.

I. AVOID HEARSAY & CONCLUSORY CLAIMS ABOUT COMMUNITY PROPERTY

If your spouse transferred money into a secret bank account, you should supply the Court with legally sufficient evidence about the secret account. Although there can be exceptions, this means you can not use hearsay to prove a secret bank account exists. Nor should any private investigator you hire make conclusory allegations to prove your spouse has a secret bank account. Instead of these examples of insufficient evidence, you must give the Court competent evidence regarding the secret bank account.

II. SERVE SUBPOENAS ON BANKS BUT NOT FOREIGN ONES

Competent evidence about your spouse’s secret bank account includes records from the bank that houses the secret bank account. You may be able to use a subpoena to compel this bank to supply you with the records. These records include: monthly bank account statements, bank signature cards, account opening documents, etc. Moreover, you would supply the court with a certification from the bank’s custodian of records to show the subpoenaed records you received from the bank are competent evidence. Additionally, a subpoena is usually unenforceable with regard to out-of-state witnesses. Therefore, if you need records from a bank headquartered out-of-state, you should probably serve your subpoena under the Uniform Interstate Deposition and Discovery Act. Meanwhile, if your spouse’s secret bank account is at a foreign bank, do not make the mistake of employing a subpoena to seek the offshore records. In other words, you can not use a subpoena across international borders.

III. USE LETTERS ROGATORY TO GET RECORDS FROM FOREIGN BANKS

However, you might be able to use a Letter Rogatory, (a.k.a. Letter Of Request or Request For Legal Assistance), to collect the evidence you need from a foreign bank. A Letter Rogatory may allow you to gather your spouse’s secret bank account records from a foreign bank. Letters rogatory may be available to you because of the international treaty, The Hague Convention,Taking Of Evidence Abroad In Civil Or Commercial Matters, 1970. You could initially seek the Letter Rogatory from the domestic court handling your divorce. If this domestic court issues your Letter Rogatory, it will be in the form of a court order. Your Letter Rogatory would request help from the foreign court with legal authority over the foreign bank. The Letter Rogatory would ask the foreign court to direct the foreign bank to supply you with your spouse’s secret bank account records & / or other evidence.

1Although this post gives tips to spouses divorcing in community property states, the tips also apply to spouses dividing marital property in equitable distribution states.
Copyright 2023 Fred L. Abrams

You may wonder if Infowars host Alex Jones, (“Jones”) has hidden his money or other assets. An expert in a lawsuit against Jones apparently claimed Jones and his Free Speech Systems company were worth as much as $270 million. Meanwhile, Jones reportedly said on his Infowars show he is worth less than $2 million. He also supposedly laughed at the nearly $150 billion in judgments he faces.1 The Court awarded the judgments to relatives of the children massacred at Sandy Hook Elementary School (hereinafter “the Sandy Hook plaintiffs”). The Court did this because Jones had spread reprehensible conspiracy theories about the massacred children. Besides discussing the Sandy Hook plaintiffs, this post also briefly mentions Jones’ 2013 divorce from Kelly Jones.

I. Did Alex Jones Hide Money Via Shell Companies?

Although shell companies have legitimate uses, they sometimes raise a red flag that a business or individual is concealing assets. This is true because the true beneficial owner of an asset can form a shell company and misuse the shell company to hide assets. For instance in some jurisdictions, the true beneficial owner can establish a shell company without supplying information as basic as who its directors, officers and / or shareholders are. Even if this information is disclosed, the identity of the shell company’s true beneficial owner may be concealed. Then, the true beneficial owner can employ the shell company with anonymity— to open bank accounts, purchase fine art, real estate &/or other assets.

Therefore, the Sandy Hook plaintiffs would want to determine if Jones was the true beneficial owner of any shell companies. My search at Corporationwiki.com reveals Jones may be related to 13 business entities. These business entities are listed below and some of them could be shell companies:

  1. Free Speech Systems, LLC
  2. Pqpr Holdings Limited, LLC
  3. Jones Productions, LLC
  4. Infowars, LLC
  5. Pljr Holdings, LLC
  6. Planet infowars, LLC
  7. Jones Report, LLC
  8. Austin Shiprock Publishing, LLC
  9. Infowars Health, LLC
  10. Aej Austin Holdings, LLC
  11. End Hate Now LLC
  12. Prison Planet TV, LLC
  13. A. Emric Productions, LLC

II. Did Jones Use Fraudulent Transfers To Hide Assets?

When someone transfers assets beyond the reach of a creditor, it can be a fraudulent transfer (a.k.a fraudulent conveyance). Creditors injured by a fraudulent transfer may be a wide variety of persons and / or entities, ranging from divorcing spouses to the IRS. In court, creditors prove a fraudulent transfer occurred by showing badges of fraud were present at the time of the transfer. Just some of these badges are: the transfer was between related parties; the transfer was made in anticipation of litigation; the transferee gave inadequate consideration for the transfer; etc. According to a November 21st Washington Post article, Jones transferred millions of dollars, “potentially… out of reach of the Sandy Hook plaintiffs”:

As the potential for damages mounted, Jones began moving millions of dollars out of his company, Free Speech Systems, and into companies controlled by himself, friends or relatives, according to a Washington Post review of financial statements, depositions and other court records. The transfers potentially put those funds out of reach of the Sandy Hook plaintiffs [emphasis added].

The Washington Post, November 21, 2022 article “Sandy Hook families sued Alex Jones. Then he started moving money around.”

If the Washington Post’s above-quoted factual allegations are true, then the Washington Post basically raised the question: Had Jones engaged in fraudulent transfers to hinder the Sandy Hook plaintiffs from collecting on their $150 billion judgment? The November 21st Washington Post article also seemed to raise the question of whether Jones placed money out of reach of his ex-wife Kelly Jones, during the couple’s divorce in 2013. The November 21st Washington Post article alleged “the flows of money around Free Speech Systems…echoed financial moves Jones made almost a decade earlier, when divorce proceedings [with Kelly Jones] jeopardized his fortune (emphasis added).”

III. Did Jones Conceal Assets By Using Nominees?

“A nominee is one who holds bare legal title to property for the benefit of another.”  In re Callahan, 442 B.R. 1, 7 (D. Mass. 2010) (citing Black’s Law Dictionary 1076 (8th ed. 2004)). Stated otherwise a nominee is an intermediary. Shell companies, family members, trusts, gatekeepers such as lawyers, etc. can all be nominees. A true beneficial owner of assets may hide assets by secretly purchasing assets through a nominee. When this happens, the nominee is referred to as a nominee purchaser. Additionally, a true beneficial owner may hide assets by secretly titling assets in the name of a nominee. Given these concealment methods, I suspect the Sandy Hook plaintiffs are trying to determine whether Jones could be hiding assets through nominees.

1 See AP News, December 2, 2022 article, “Infowars host Alex Jones files for personal bankruptcy.”

Copyright 2023 Fred L. Abrams

Learning about concealment schemes can help you spot concealed assets your spouse places beyond your reach during your divorce. Therefore, a divorcing spouse trying to identify hidden marital assets / community property could learn a lesson from Dr. Krishnaswami Sriram.  Dr. Sriram is thought to have concealed assets from the IRS in two suspected concealment schemes. The two suspected schemes involved alleged tax fraud. The suspected schemes are thought to have employed these common concealment methods:

DR. SRIRAM’s FIRST SUSPECTED ASSET CONCEALMENT SCHEME

Dr. Sriram first concealed assets from the IRS by making false statements at his joint Individual Tax Returns (Form 1040) for years 1997 & 1998.  Additionally, Dr. Sriram made false statements at his Partnership Return Of Income (Form 1065) for year 1999. At these tax returns, Dr. Sriram concealed assets by understating his business profits & / or by overstating business expenses. Consequently, at his September 19, 2002 plea agreement, Dr. Sriram pleaded guilty to violating 26 U.S.C. § 7206(1) (Fraud and false statements).  Furthermore, the plea agreement indicates Dr. Sriram schemed to defraud Medicare, Medicaid and private insurers from about September 1996 until about March 2001. The plea agreement says Dr. Sriram had submitted bogus claims for medical services he never rendered to his patients. Therefore, at his plea agreement Dr. Sriram pleaded guilty to mail fraud & health care fraud besides tax fraud.

DR. SRIRAM’S SECOND SUSPECTED ASSET CONCEALMENT SCHEME

As recently as August 25, 2022, Dr. Sriram was again accused of hiding assets from the IRS. Dr. Sriram’s August 25, 2022 indictment alleges Dr. Sriram violated 26 U.S.C.§ 7201 (Attempt to evade or defeat tax) & 26 U.S.C. §§ 7206(1), & 7206(2) (Fraud & false statements)  The August 25th indictment alleges in relevant part that in 2014 Dr. Sriram entered into a stipulation with the IRS.  Based on the stipulation, the U.S. Tax Court affirmed assessments against Dr. Sriram in the amount of about $1.6 million for years 1997, 1998, 1999 & 2001. Between about June 6, 2014 to about April 2017, Dr. Sriram allegedly tried to reduce the $1.6 million he owed by reportedly making false statements to the IRS.  Moreover, Dr. Sriram’s indictment suggests Dr. Sriram may have hidden his true beneficial ownership of assets by allegedly:

  1. Using his children as the nominal owners of rental properties in Arlington Heights, Illinois & Peekskill, NY.  Meanwhile, Dr. Sriram is thought to have secretly controlled these properties and supposedly collected the rental income from these properties.
  2. Parking assets in offshore investment accounts in India, at Calibre Consultants Wealth Management and Calibre Financial Financial Services Limited.
  3. Transferring about $600,000 from a domestic Bank of America account into a foreign bank account at Federal Bank Limited in India;
  4. Titling bank accounts in the names of suspected shell companies which Dr. Sriram secretly controlled.

Copyright 2022 Fred L. Abrams