Like the IRS & SEC you can sometimes search for assets by using whistleblower tips, my October 3rd program explains.

A) PROGRAM DESCRIPTION

At the New York County Lawyers’ Association on October 3, 2017 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 3rd 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 3rd 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. In addition to others he has represented,  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.  Furthermore, Mr. Blum appeared on the CBS/60 Minutes television show to discuss the foregoing.  He will similarly discuss these matters at the October 3rd 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.

ThomasLabaton & Sucharow partner Jordan A. Thomas will also speak at the October 3rd 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.

Photo Charles Bott

Charles Bott QC, Head of Carmelite Chambers in the United Kingdom, is a recognized authority on financial crime and its regulation.  Subject to his availability, Mr. Bott may travel to New York to speak at the October 3rd program. 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.

Continue Reading Whistleblowers, Secret Swiss Bank Accounts & Recovering Hidden Assets

Today’s “Asset Search News Roundup” is about the New York case against the ex-president of Guatemala, Alfonso Portillo and it also mentions the sentencing of New York former top cop Bernard Kerik:

  • The one-count indictment unsealed on January 26, 2010 in the case against ex-president Portillo is available here.  Mr. Portillo’s indictment alleges that he embezzled monies in a public corruption scheme during his Guatemalan presidency.  According to his indictment, Mr. Portillo supposedly laundered illicit proceeds through multiple jurisdictions including: New York, Miami, Paris, Luxembourg and Switzerland.  He is specifically accused of violating 18 U.S.C. §1956 and the federal government is seeking asset forfeiture pursuant to 18 U.S.C. §982
  • As reported by Bloomberg.com on February 18, 2010, former NYPD Police Commissioner Bernard Kerik was sentenced to four years of prison for tax fraud and some of the other crimes described at “White-Collar Crime & A Former Top Cop“.  The letter Mr. Kerik sent to the Court just prior to his sentencing is available here:

(To Read Mr. Kerik’s Letter Click On The Image Below)

 Copyright 2010 Fred L. Abrams

This "Asset Search News Roundup" is about two New York criminal defense attorneys who among other things, were accused of violating privacy law by possessing illegal eavesdropping equipment.  On August 20, 2009, attorneys Robert Simels and Arienne Irving were found guilty of importing and possessing illegal eavesdropping equipment in violation of 18 U.S.C. §§2512 (1) (a) & (b)

Ms. Irving was eventually acquitted of all criminal charges on December 4, 2009 and a U.S. Attorney’s press release mentions that Mr. Simels was sentenced to 168 months of prison.  Mr. Simels’ jury verdict sheet additionally reveals that he was convicted of several witness tampering charges along with the bribery charge outlined by his July 10, 2009 superseding indictment.  He had apparently committed these crimes in connection with his representation of Mr. Shaheed Khan in a federal criminal case. 

An August 20, 2009 Drug Enforcement Administration press release called Mr. Khan a drug kingpin and claimed that Mr. Simels and Ms. Irving had imported the illegal eavesdropping equipment from Guyana, where Mr. Khan had used it.  My next article will again mention U.S. privacy law.  This upcoming article is called "Violating Federal Law In An Asset Search".  It describes how a private detective may have conspired to illegally access customer account information maintained at a U.S. bank.

(Edited December 12, 2009)

Copyright 2009 Fred L. Abrams

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.
  • 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

One of the worst child support cases I know about is Janet O. v. James O., slip op. 51985 (Sup. Ct. N.Y. County, October 17, 2006). The ex-husband in Janet O had not made any child or spousal maintenance support payments for 30 years. By moving from New York and living offshore in Barbados, the Dominican Republic and Mexico, the ex-husband evaded enforcement proceedings on behalf of his ex-wife & their 3 sons. Consequently, the ex-wife and their 3 sons were relegated to poverty and public assistance.

Meanwhile, the ex-husband remarried and adopted his new wife’s 2 daughters.  Ultimately, the New York court referred the Janet O matter to federal prosecutors. When a parent moves offshore to evade child support, federal prosecutors may bring a criminal case pursuant to the Child Support Recovery Act at 18 U.S.C.§ 228 et. seq. A parent criminally charged with violating 18 U.S.C.§ 228 hopefully has an additional incentive to pay child support.

Elements of A Case Under 18 U.S.C. § 228 (a)(2)

18 U.S.C. § 228 (a)(2) covers a parent who crosses state lines or leaves the country in order to evade child support. A violation of 18 U.S.C. § 228 (a)(2) is punishable by up to two years imprisonment and by a fine up to $250,000. To show a defendant violated 18 U.S.C. § 228 (a)(2), a federal prosecutor would prove these elements at trial:

  • the defendant traveled in interstate or foreign commerce with the intent of evading child support obligations;
  • the defendant had a past due child support obligation exceeding $5000;
  • and the obligation is unpaid for more than a year.

Additionally, a prosecutor may use Federal Rule of Evidence 404 (b) to supply evidence at trial about the defendant’s: motive; opportunity; intent; plan; etc. For example, pursuant to Rule 404 (b) a prosecutor might show the jury the defendant’s tax returns to prove the defendant could have paid the child support obligation.

U.S.A. v. Juelle-Albello

Like the ex-husband in Janet O, Mr Juelle-Albello was accused of moving offshore to evade child support. In U.S.A. v. Juelle-Albello, federal prosecutors indicted Mr. Juelle-Albello for his suspected violation of 18 U.S.C. § 228 (a)(2).  Mr. Juelle-Albello married Diana Umpierre in Puerto Rico on 11/8/1991. On 6/26/2007 Mr. Juelle-Albello and Ms. Diana Umpierre were divorced.  Among other things, Mr. Juelle-Albello was suppose to pay $13,893.81 a month for child support through the Puerto Rico Child Support Administration (“ASUME”). As of June 2018 Mr. Juelle-Albello’s outstanding debt to ASUME reportedly was $1,868,012.50.

According to federal prosecutors, Mr. Juelle-Albello made no payments to ASUME from July 2013 to June 2018. Instead of making the payments, Mr. Juelle-Albello moved to Florida in 2011 where he lived with his new wife and new daughter. Then during 2014, Mr. Juelle-Albello left the U.S. for Mexico. However, in July 2018 Mexican authorities placed Mr. Juelle-Albello in U.S. custody by deporting him pursuant to an arrest warrant in U.S.A v. Juelle-Albello. The list of evidence prosecutors intended to use at Mr. Juelle-Albello’s trial included: Mr. Juelle-Albello’s record of payments to ASUME; court orders from the Court in Bayamon, Puerto Rico; Snapchat photos; etc. On 8/12/2019 Mr. Juelle-Albello pleaded guilty to violating 18 U.S.C. § 228 (a)(2). Mr. Juelle-Albello’s sentencing is now set down for 7/21/2020.

Copyright 2020 Fred L. Abrams

Bank Deposit Image

In some situations, the transfer of large sums of cash is a red flag that assets have been hidden by money laundering. Government authorities therefore require banks to report their customers who transfer or exchange large sums of cash. For example, banks in the United States are required to report bank customers who deposit or withdraw more than $10,000 in cash. The banks fulfill this requirement by electronically filing a Currency Transaction Report.

A bank customer trying to evade the filing of a Currency Transaction Report can be prosecuted for structuring, (a.k.a “smurfing”), in violation of 31 U.S.C. § 5324. Opinion blogger Radley Balko talks about some of these prosecutions at “The federal ‘structuring’ laws are smurfin’ ridiculous.” As discussed by “An Asset Search Over Corruption Proceeds,” prosecutors accused former Russian diplomat Vladimir Kuznetsov of violating structuring law(s).

At Count Two pp. 6-9 of Mr. Kuznetsov’s superseding indictment, prosecutors alleged Mr. Kuznetsov had structured deposits he made in New York City at Chase Manhattan Bank & the United Nations Federal Credit Union. The following case study also discusses structuring.¹  It analyzes how a group of criminals hid illicit drug proceeds by structuring deposits, smuggling cash & going offshore:

Image Egmont Case 06082

Image of hand with money: Africa Studio/Shutterstock.com

¹Case Study/Case Ref: 06082 Courtesy Of The Egmont Group of Financial Intelligence Units

Copyright 2016 Fred L. Abrams

I first published this post on December 14, 2007 and it is now the 12th post in the “Divorce & Hidden Money” series.  As shown below, a divorcing spouse’s effort to valuate marital assets occasionally raises tax fraud or other criminal law issues.  Furthermore, assets and income can be concealed by pocketing cash; using a business bank account to pay personal expenses; and cashing checks instead of depositing them into a bank account:

As my post “Divorce, Child Support & Reporting Tax Fraud” mentioned, divorcing spouses sometimes tip the IRS about a suspected tax fraud.  Mrs. Benjamin for example, tipped the IRS because she thought that her divorcing husband had underreported revenue from his commercial maintenance and landscaping business.  She specifically provided the IRS with the business documents Mr. Benjamin had produced during the pretrial discovery phase of their divorce case.  These documents included payment summary records from Mr. Benjamin’s customers like Wal-Mart.  As part of her tip to the IRS, Mrs. Benjamin also turned over joint tax returns which Mr. Benjamin had supposedly filed for the years 1998 and 1999.

A records check at the IRS however demonstrated that the 1998 and 1999 joint tax returns had never actually been filed by Mr. Benjamin.  The IRS also learned that from 1997 through 2001, Mr. Benjamin had neither paid income tax nor filed state or federal income tax returns.  IRS Special Agents then received false information from Mr. Benjamin when they interviewed him at his home on June 26, 2002.  The IRS also reviewed Mr. Benjamin’s bank accounts and conferred with Wal-Mart along with Mr. Benjamin’s other customers.  As a consequence of its asset search and tax fraud investigation, the IRS finally determined that Mr. Benjamin’s total gross receipts or sales between 1998 and 2001 had actually been about $1,139,470.18; and that Mr. Benjamin had a $129,396.91 tax liability.

The IRS further recognized that Mr. Benjamin had hidden assets and income by: pocketing cash payments from customers; paying personal expenses from a business bank account; and cashing customers’ checks instead of depositing them into his bank account.  During its investigation, the IRS additionally discovered that Mr. Benjamin had defrauded Wal-Mart through a false invoicing scheme.  By seeking payment for services he had never performed, (and faxing Wal-Mart twenty-two phony invoices between February 2001 and January 2002), Mr. Benjamin had duped Wal-Mart out of $417,583.

The IRS criminal investigation started by Mrs. Benjamin’s tax fraud tip eventually led to Mr. Benjamin’s 58 count indictment on July 27, 2005 in U.S.A. v. Benjamin, Index # 05-Cr-00348, U.S. District Court, District of Colorado.  Pursuant to his January 5, 2006 plea agreement, Mr. Benjamin pleaded guilty to violating 26 U.S.C. § 7201 (tax evasion) and 18 U.S.C. § 1343 (wire fraud).  Because of his white collar crimes, Mr. Benjamin was sentenced on June 16, 2006 to serve two years in prison followed by three years of supervised release.  As Mr. Benjamin’s sentence and criminal judgment both mentioned, he was also directed to start making restitution payments to Wal-Mart after his release from prison.

(Edited 1/30/15)

Copyright 2007-2015 Fred L. Abrams

Albert Gonzalez was arrested in the Southern District of Florida on May 8, 2008 pursuant to this warrant:

Click On The Arrest Warrant To Enlarge It

The arrest arose out of Mr. Gonzalez’s alleged computer hacking / identity theft scheme which was later outlined in a May 14, 2008 New York superseding indictment.  This superseding indictment in U.S.A. v. Yastremskiy, et. al., 08-cr-00160, claimed that Mr. Gonzalez and his co-defendants had stolen credit card information through computer intrusions at Dave & Busters, Inc. restaurants.  Mr. Gonzalez and / or his co-defendants were accused of violating federal laws including but not limited to: conspiracy (18 U.S.C. §371); fraud related to computers (18 U.S.C. §1030); wire fraud (18 U.S.C. §1343 ); access device fraud (18 U.S.C. §1029); aggravated identity theft (18 U.S.C. §1028A); etc.

Almost three months after the superseding indictment was filed against him in New York, Mr. Gonzalez was next indicted in Massachusetts.  According to the August 5, 2008 Massachusetts indictment in U.S.A. v. Albert Gonzalez, 08-cr-10233, Mr. Gonzalez had hacked computers which stored credit card information for BJ’s Wholesale Club, DSW, OfficeMax, Boston Market and others.

Like the New York superseding indictment, the Massachusetts indictment accused Mr. Gonzalez of: conspiracy (18 U.S.C. §371); fraud related to computers (18 U.S.C. §1030); wire fraud (18 U.S.C. §1343 ); access device fraud (18 U.S.C.§1029); and aggravated identity theft (18 U.S.C. §1028A).  The Massachusetts indictment also essentially asserted that Mr. Gonzalez had hidden the proceeds of his hacking / identity theft scheme by money laundering through multiple jurisdictions.

Continue Reading Using Foreign Computer Evidence Against An Accused Hacker

Politically exposed persons who are involved in public corruption schemes, sometimes use money laundering to hide bribes or other illicit proceeds.  Although not accused of money laundering, former Detroit city councilwoman Monica Conyers, was a politically exposed person suspected of accepting bribes.  Monica Conyers is also the wife of House Judiciary Committee Chairman John Conyers. 

The Detroit News and others reported earlier that Monica Conyers was under investigation for supposedly accepting jewelry and cash.  As was also widely reported, she recently pleaded guilty to a charge of conspiracy to commit bribery.  This bribery conspiracy was outlined in a second superseding information filed June 26, 2009.  According to Monica Conyers’ plea agreement, her bribe-taking involved a wastewater treatment contract between Synagro Technologies Inc. and the City of Detroit. 

Unlike Monica Conyers, former Massachusetts state senator Dianne Wilkerson has pleaded not guilty to public corruption charges.  I first wrote about Diane Wilkerson in my November  5, 2008 "Asset Search  News Roundup".  As a second superseding indictment in U.S.A. v. Wilkerson, 1:08-cr-10345 mentions, Dianne Wilkerson is accused of violating 18 U.S.C. §1951 ("the Hobbs Act") and other federal laws.  The government is also seeking the forfeiture of Ms. Wilkerson’s assets, pursuant to 18 U.S.C. §981 (a) (1) (C) and 28 U.S.C. §2461 (c).      

Furthermore, an FBI Special Agent’s Affidavit relies on surveillance video / still photos to support the government’s contention that Diane Wilkerson had taken bribes related to a state liquor license.  The government’s still photos were highly publicized and one of them supposedly showed Diane Wilkerson on June 18, 2007 hiding a $1000 bribe in her bra.  The Special Agent’s Affidavit at pp. 6-7, ¶ 15,  referred to some of these still photos as Exhibits "C" and "D":

 Photos: U.S. District Court File, U.S.A. v. Wilkerson

Copyright 2009 Fred L. Abrams