We all know that compared to money hidden at domestic bank accounts, money hidden in offshore accounts is harder to detect and interdict. This explains why offshore bank accounts are perhaps the most widely used method to hide vast sums of money. Individuals ranging from high-net-worth divorcing spouses to narco-traffickers and terrorist financiers can use offshore bank accounts to hide money. Trusts, shell companies, partnerships & other business entities, sometimes also hide money at offshore bank accounts. One difficulty in trying to interdict hidden money at offshore bank accounts, is that you have to first gather competent evidence about these accounts in order for a court to help you.
To gather competent evidence, you will ordinarily need to hire offshore lawyers and bring offshore legal proceedings. Demonstrating this point, is the fact pattern¹ of a husband in a New York divorce who hid tens of millions of dollars from his wife by using two offshore banks respectively in Switzerland and Germany. The divorcing husband hid his millions offshore through the scheme I outline at my post “Money Laundering, Marital Assets & Divorce.” Meanwhile, the wife shouldered the burden during the divorce of proving to the court that her husband hid the millions offshore.
This meant the wife needed to file court cases in Switzerland and Germany through lawyers there. The wife had to file the court cases to compel the Swiss and German banks to supply her with copies of her husband’s: bank account opening documents; monthly bank account statements; & account signature cards. After collecting this evidence from the Swiss and German banks, the wife could use it at an equitable distribution hearing in the New York divorce. By using this evidence at the hearing, the wife would be able to prove that her husband hid millions at the Swiss and German banks. The judge in the New York divorce could then consider the husband’s millions at the these two offshore banks and award the wife her fair share of the marital property.
The husband I describe above, hid money by using just two offshore bank accounts, the one in Switzerland and the other in Germany. However, most schemes to hide large sums of money offshore, involve a greater number of banks &/or bank accounts. An example of a scheme in which numerous bank accounts were used to hide money offshore is detailed at the “How FINTRAC Builds A Case” webpage. At its webpage, the Canadian financial intelligence unit FinTrac describes the way criminals laundered money through four banks and ten bank accounts. U.S.A. v. Rahman might be an example of another scheme with numerous bank accounts used to hide money offshore. Prosecutors in U.S.A. v. Rahman claim Mr. Azizur Rahman hid money from the IRS as part of a suspected tax fraud. According to Mr. Rahman’s indictment available below, Mr. Rahman failed to disclose over 20 offshore bank accounts to the IRS.
¹This fact pattern has been changed & sanitized for privacy reasons.
Copyright 2021 Fred L. Abrams