One money laundering method involves hiding money by rigging court cases.¹ A plaintiff sues a defendant over a supposed breach of contract. Meanwhile, nobody knows the defendant is the plaintiff’s strawperson and the two have rigged the court case. When the plaintiff wins the bogus breach of contract case, the Court issues a money judgment against the defendant. Then, the plaintiff secretly transfers money to the defendant. The defendant launders plaintiff’s money by paying it to the plaintiff to satisfy the money judgment. This kind of money laundering could have occurred in the following fact pattern which I have changed for privacy reasons. The fact pattern includes comments about money laundering from counsel in Switzerland.
I) Mr. “J’s” Missing $500 Million At His Swiss Bank
Mr. “J” who lives in New York City e-mailed a NY lawyer. Although Mr. J’s e-mail was written in English it had some spelling errors. Mr. J’s e-mail said that Mr. J sold his commercial real estate to corporation “X” for $500 million USD in cash. X however, failed to pay Mr. J the $500 million. Mr. J then brought a lawsuit against X in Zürich, Switzerland and the Court entered a $500 million money judgment against X. To satisfy the judgment, X deposited $500 million in cash into Mr. J’s bank account in Zürich. Mr. J’s e-mail also claimed the $500 million was now missing from Mr. J’s Zürich bank account. Mr. J’s e-mail said Mr. J wanted to hire the NY lawyer to recover Mr. J’s $500 million from the bank in Zürich.
II) Was Mr. J Hiding Money Through Money Laundering?
The NY lawyer thought that Mr. J might have been hiding money at his Zürich bank account. The NY lawyer therefore forwarded Mr. J’s e-mail to counsel in Zürich, Switzerland. Counsel in Zürich sent the New York lawyer a reply e-mail which said in relevant part:
In my view [Mr. J’s e-mail] is indeed suspicious. I see several signs for this, for example: The text is confusing and has English mistakes (‘proof’ instead of ‘prove’). The sums involved are extravagant and are simply too important to have disappeared. While the absolute size of the amounts involved is not unheard of, it would be unusual for such sums to be deposited in cash. This means that the transactions involved would have been carefully investigated by the bank as part of their due diligence, but no details of this investigation are offered [at Mr. J’s e-mail]. It is a known tactic of money laundering to obtain judgements or arbitral awards in rigged cases (where the opposing parties are in fact conspirators) to justify a seemingly impeccable source of funds. The background of the Zürich proceedings is not explained in any way. If one really wanted to get to the bottom of this, the best course would be to seek legal assistance from the Swiss authorities. For this, some US (or other) prosecutor would need to make a request to the Swiss authorities, perhaps based on alleged money laundering. The Swiss authorities should then be able to access the bank documentations from anywhere in Switzerland (and not only from Zürich), the court documents from the alleged Zürich proceedings, even files from lawyers. Based on this information further steps could be contemplated. I advise utmost caution in dealing with this matter.
¹I listed additional laundering methods at “Red Flags For An Asset Search.”
Copyright 2020 Fred L. Abrams