Asset Search/Fraud Investigation

Subscribe to Asset Search/Fraud Investigation via RSS

Wachovia, one of the world’s largest international banks, is still defending itself against the Florida civil complaint described at my post "Lawsuit Claims Wachovia Bank Facilitated Alleged Ponzi Scheme".  The complaint essentially claims that Wachovia’s anti-money laundering program under the Bank Secrecy Act had failed to detect money laundering.  It was brought by the apparent victims of a Ponzi-like securities fraud.

Although the complaint could conceivably be the subject of a trial, the Court might soon dismiss at least part of it.  This might happen since there is no private right of action under the Bank Secrecy Act for alleged anti-money laundering program violations.  Only governmental authorities can seek monetary damages for Bank Secrecy Act violations, as suggested by pages 77-78 of the August 26, 2009 opinion in Armstrong v. American Pallet Leasing, Inc.: 

 

(CLICK ON THE IMAGE ABOVE TO READ THE OPINION) Continue Reading Wachovia Bank & Its Bank Secrecy Act Issues

Bank customers sometimes hide their assets offshore in nominee bank accounts located in high-risk geographical locations like Switzerland.  One such bank customer was ex-watch manufacturer Jack Barouh of Golden Beach, Florida.  As a February 4, 2010 press release basically explained, Mr. Barouh was accused of hiding undeclared revenue from the IRS during an abusive offshore tax avoidance scheme at UBS AG and other foreign banks.

Mr. Barouh’s scheme could have stared in 1976 when he first transferred skimmed monies from his U.S. watch businesses to foreign accounts at UBS of Switzerland.  He reportedly carried out his scheme with the help of two Swiss money managers and a Swiss attorney.  One of these Swiss money managers had even supposedly misappropriated some of Mr. Barouh’s undeclared revenue, although Mr. Barouh may have eventually recovered this revenue via a settlement.

The Swiss attorney and money managers are believed to have opened Mr. Barouh’s nominee bank accounts and / or had been directors of Mr. Barouh’s foreign companies.  These foreign companies were formed in Panama, the British Virgin Islands and Hong Kong and had reportedly been used to open Mr. Barouh’s nominee bank accounts in Switzerland or Hong Kong.  Despite all of the foregoing, the IRS was able to detect Mr. Barouh’s undeclared revenue in his nominee bank accounts.Continue Reading An Ex-Watch Manufacturer & His Nominee Bank Accounts

After I wrote my November 28th, 2009 “Asset Search News Roundup” about Minneapolis money manager Trevor Cook, he was incarcerated on January 25, 2010 for civil contempt of court.  As the Court stated in its January 25, 2010 Opinion, the Securities and Exchange Commission and the Commodity Futures Trading Commission previously filed for injunctive relief against Mr. Cook.

They sought injunctive relief because Mr. Cook had allegedly participated in a Ponzi-like securities fraud which might have involved at least $190 million taken from 1000 or more victims.  Also according to the January 25th Opinion, Mr. Cook violated a November 23, 2009 asset freeze by dissipating assets.  The Court therefore remanded Mr. Cook to jail until “he purges himself of the contempt” by turning over:

  • $27,061,728.35 in foreign accounts;
  • $670,000 in cash;
  • $62,000 transferred to Mr. Cook’s brother;
  • $6,141,470 paid to preferred persons;
  • $2,005,857.88 in domestic accounts;
  • $53,000 from the sale of a Maserati & Hummer;
  • a computer and documents formerly possessed by Mr. Cook’s assistant;
  • a houseboat & a submarine;
  • his BMW, Lexus 430 & Lexus SUV;
  • his Bon Jovi tickets purchased in 2009;
  • and his collections of Faberge eggs and watches;

Continue Reading Mr. Cook Continues His Incarceration For Civil Contempt

At “Target Of Corruption Probe Sues Hip-Hoppers For Supposed Fraud“, I first mentioned the nexus between former Turks & Caicos premier Michael Misick and Hip Hop Weekly Magazine.  The Forbes article “The Premier And The Hip-Hop Magazine” discussed the same thing and also quoted me.

This article specifically examined the Former Premier’s alleged investment in Hip Hop Weekly Magazine through My Way Productions 2.  The Forbes article additionally described Sir Robin Auld’s public corruption investigation of the Former Premier and asked at page 1:

 “How did My Way Productions 2 get its funding? According to the investigation carried out by Sir Robin Auld, Misick supplied a document that showed $300,000 was transferred to My Way Productions 2 in 2007 from a company called Windsor Investment Group. Misick claimed the money was a dividend from that company, which he and his brother partially owned.”

The supposed transfer of $300,000 dollars into My Way Productions 2 had been expressly mentioned at page 146 ¶¶4.75 & 4.76 of Sir Robin’s “Final Report to the Governor of the Turks and Caicos Islands“.*  The $300,000 dollars was also apparently discussed at pages 51, 53, & 54 of a transcript from the Former Premier ‘s January 14, 2009 public corruption hearing.  Besides all of the foregoing, assertions made by New Jersey lawyer David J. Finkler might too shed light on the Former Premier’s connection to Hip Hop Weekly Magazine.Continue Reading The Former Premier’s Nexus To Hip Hop Weekly Magazine

“Smuggling Cash Across Iraq’s Borders” mentioned Donnie the former DEA agent who had trained Iraqi border personnel to interdict bulk-cash smugglers.  To help detect these smugglers, governmental authorities also use declaration forms to track the cross-border movement of cash and monetary instruments.

As mentioned by my April 13, 2009 “Asset Search News Roundup“, one such declaration form is the “FinCen 105”.  It generally requires disclosure to the Bureau of Customs and Border Protection, when individuals physically transport, mail or ship more than $10,000 in cash or monetary instruments into the U.S.:

(To View The Complete Form, Click On The Image)

To avoid triggering the mandatory filing of a FinCen 105, Virginia medical doctor Andrew Silva had illegally structured cash by smuggling it in packages containing less than $10,000.  During an abusive offshore tax avoidance scheme, Dr. Silva mailed these packages of cash from Switzerland into the U.S., as outlined by his “statement of facts” filed in U.S.A. v. Andrew B. Silva.Continue Reading A Doctor, A Lawyer & Bricks Of Cash In Switzerland

The plaintiffs’ complaint in Grosz v. The Museum of Modern Art had alleged that The Museum of Modern Art (MoMA”) was the wrongful transferee of three Holocaust-era paintings.  The Court’s Order dismissed this contested provenance complaint last month on the ground that the complaint was barred by the statute of limitations.

Since the Grosz complaint was dismissed, attorney Raymond Dowd filed a Notice of Appeal on behalf of the plaintiffs.  Mr. Dowd will also be lecturing on March 24, 2010 at Sotheby’s Institute of Art where he will present “Egon Schiele’s Dead City: Current Issues in Nazi Art Looting and Recovery”.

Perhaps more interesting than the dismissal of the Grosz complaint, are the historical letters discussed by Grosz.  The following letters for example, were respectively mentioned during Grosz, at ¶¶39 & 48 of plaintiffs’ June 23, 2009 Declaration of Jonathan G. Petropoulos:

Continue Reading The Grosz Case & Gallery Owner Curt Valentin

The Court announced yesterday that there had been a settlement in the New Jersey case involving Former Premier Michael Misick of the Turks and Caicos Islands.  The settlement is mentioned at the Court’s Order of Dismissal and by the current docket report.

According to various court filings, the Former Premier could have been a beneficial owner of Hip Hop Weekly Magazine through his alleged interests in: My Way Productions 2 LTD. (“My Way”), Z & M Media LLC (“Z & M”), and the holding company for Hip Hop Weekly Magazine, Hip Hop Global  Media, LLC (“HHG”). (Cf. Defendants’ Answer, Counterclaim and Third-Party Complaint at p. 26 ¶ 7) (claim that the Former Premier and his ex-wife LisaRaye McCoy were “real parties in interest”).

The Verified Amended Complaint in the New Jersey case meanwhile, indicated at ¶¶7, 57, 75, 78, 80 and Exhibit “H”,  that My Way or Z & M or HHG, might have been involved in making substantial capital contributions:

  1. $798, 647. 57 capital contribution from My Way into Z & M;
  2. $10,000.00 capital contribution from My Way into HHG;
  3. $833,334.00 capital contribution from My Way into HHG and Z & M;
  4. $260,000.00 capital contribution from Z & M to fund Hip Hop Weekly Magazine.

Continue Reading New Jersey Lawsuit Involving Former Premier Misick Settles

By using customer identification or “know your customer” rules, banks try to prevent money laundering and other financial frauds.  This use of customer identification rules by banks is contemplated at the Fifth Recommendation of the Financial Action Task Force.  The Fifth Recommendation urges banks to diligently verify a customer’s identity and to record the true beneficial ownership of bank accounts.

As reported at “Fighting Financial Fraud At UK Banks“, the UK changed its banks’ “know your customer” rules on December 15, 2007, by codifying them at Money Laundering Regulations 2007*.  U.S. banks too verify customer identities, but do so pursuant to 31 C.F.R Part 103.121.  Lawsuits alleging that two U.S. banks had failed to sufficiently identify their bank customers, are respectively described at: “Associated Bank Sued For Supposedly Ignoring Red Flags” and “Lawsuit Claims Wachovia Bank Facilitated Alleged Ponzi Scheme“.

UBS AG and other Swiss banks also require customer identification at the time a bank account is opened.  The customers of Swiss banks execute a declaration of beneficial ownership, commonly referred to as a “Form A”.  A July 13, 2001 “Form A” was used in the U.S. tax fraud case brought against Florida yacht broker Robert Moran.  According to the Plea Agreement in Mr. Moran’s case, the July 13th “Form A” helped demonstrate that Mr. Moran had violated 26 U.S.C. § 7206 (1), (perjury on a return / false statements).Continue Reading Customer Identification At UBS AG And Some Other Banks