shutterstock_201148613 (1)TIPS FROM EARLIER ASSET SEARCH BLOG ARTICLES THAT MAY HELP YOU RECOVER HIDDEN ASSETS:

Photo Of Light BulbDETERMINE BENEFICIAL OWNERSHIP—Has your adversary hidden assets by transferring them to nominees, (i.e. intermediaries), or by using nominees to make purchases?  If your adversary does this, the success of your asset recovery may depend on showing that your adversary is the true beneficial owner of the hidden assets.  Agencies including U.S. Treasury’s Financial Crimes Enforcement Network discuss beneficial ownership at their March 5, 2010 Guidance on Obtaining and Retaining Beneficial Ownership Information, No. Fin-2010-G001, at fn.2.  The Wolfsberg Group of banks’ FAQs On Beneficial Ownership, supplies its own definition of beneficial ownership.

Photo Of Light BulbFIND LAUNDERED ASSETS—Launderers hide assets by washing them through a money laundering circuit with laundering links.  Laundering links can be shell companies; gatekeepers like lawyers & accountants; etc.  Through money laundering, your adversary may hide marital assets; bankruptcy estate assets; trust assets; assets belonging to a decedent’s estate and virtually anything else.  Even an act as ordinary as buying real estate can be an opportunity to hide & launder assets, as set forth by the Egmont Group case study available here

Photo Of Light BulbUSE LEGAL TOOLS—Tools which may help detect your adversary’s money trail are available in legal proceedings ranging from divorces to bankruptcies.  My May 18, 2015 article discusses one of these tools, 11 production requests geared toward detecting assets hidden offshore.  Depositions are another legal tool for gathering evidence about your adversary’s assets.  At a deposition, your lawyer should ask your adversary about any bank accounts; credit cards; real estate; etc.  The IRS asks these questions at its Information Collection Statement, Form 433-A.  The questions/material at the Form 433-A can be modified and used to depose your adversary about assets.

Photo Of Light BulbLETTERS ROGATORYRequests for letters rogatory (a.k.a requests for judicial assistance)—are used to gather evidence from witnesses residing offshore.  This means that a divorcing spouse; judgment creditor; etc. may utilize these requests to collect evidence about offshore bank accounts from foreign bank witnesses.  Billionaire gunmaker Gaston Glock’s former wife Helga filed a request for judicial assistance in federal court in Atlanta, Georgia.  It claimed that because of the couple’s divorce in Austria, Helga Glock needed to collect evidence about Gaston Glock’s assets from businesses in Georgia including Glock, Inc.

Photo Of Light BulbCOMPELLED CONSENT/AUTHORIZATION FORMS—can be utilized to perform a bank account search if you already know: where your adversary’s bank is located; the bank account number; and the identity of the bank signatory.  You would apply to the Court for an order, (i.e. a judicial direction), compelling the bank signatory to execute a consent/authorization form for the release of bank account information.  You then send this executed form to your adversary’s bank which permits the bank to release your adversary’s bank account information to you.

Photo Of Light BulbINFORMANT’S TIPS—are one of the best ways to detect complex asset concealment schemes.  This is why the Securities Exchange Commission & the Internal Revenue Service offer tipsters rewards through whistleblower programs.  A business partner; paramour; family member; or others associated with your adversary may have direct knowledge of your adversary’s assets.  If any of them fall out of favor with your adversary they may be willing to tip you about your adversary’s hidden assets.  An attempt to elicit a tip from an informant is covered by the article “An Asset Search, Tax Fraud & Divorce.”

Photo Of Light BulbCOMPUTER-BASED RESEARCH—sometimes reveals assets hidden by an individual or corporation.  This research is discussed at “A Low-Cost Asset Search.”  It can include searches for physical business assets; IP licenses like patents & copyrights; & searches for additional things.

 

¹Money laundering case study/excerpt courtesy of the Egmont Group, “100 Cases From The Egmont Group” at pp. 17-18.

First Image: Texelart/Shutterstock.com

Photo of Lightbulb courtesy of Flickr (Licensed) by One Way Stock

Copyright 2015-18 Fred L. Abrams

Image Offshore Assets

The following can help you detect money concealed in an offshore bank account:

I.  DETECT A MONEY TRAIL

When an adversary hides funds at an offshore bank there is always an electronic trace. The trace occurs because the bank stores electronic information comprised of: bank account opening documents; bank signature cards; monthly bank statements; etc.  In addition to an electronic trace, there are usually other signs of a money trail to spot.  As “Secreting Assets Without A Border Trace” reveals, you may be able to detect the money trail by “concentrat[ing] on foreign hotels, payment information, telephone records and on credit card expenses for details of physical movements and lifestyle.”

II.  DEPOSE YOUR ADVERSARY’S LAWYERS

A complex scheme to hide assets is sometimes facilitated by a lawyer, as described at “Striking Out During Your Asset Search? Don’t Forget To Look At The Lawyers” & “Hiding Assets Through Gatekeepers With Accounts Across The Globe.” A lawyer may have opened your adversary’s offshore bank account &/or withdrawn money from it. By bringing legal proceedings, you can sometimes depose this lawyer/serve the lawyer with discovery demands, as described at “A Debt Collection In New York.” “An Asset Search Of A Lawyer Employed To Conceal Cash” also shows how these discovery demands might lead you to a secret bank account.

III.  LOOK FOR THE THE BADGES OF FRAUD

Money Laundering, Marital Assets & Divorce” mentions a divorcing husband who transferred money, (i.e. black capital), originating in the U.S., into a secret Swiss bank account.  Through financial transactions including a back-to-back loan, the husband laundered the money he transferred offshore.  Individuals like the husband can secretly transfer money into an offshore bank account via bulk-cash smuggling; phony invoicing schemes; disguised wire transfers; & numerous other ways.  You might be able to detect this suspicious transfer of money by looking for badges of fraud. According to the Court in Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (2d Cir. 1983), the badges of a fraudulent asset transfer are:

  1. the lack or inadequacy of consideration;
  2. family, friendship or close associate relationship between the parties;
  3. the retention of possession, benefit or use of the property in question;
  4. the financial condition of the party sought to be charged both before and after the transaction in question;
  5. the existence or cumulative effect of a pattern, or series of transactions, or course of conduct, after a debt, the onset of financial difficulties or pendency or threat of suits by creditors;
  6. & the general chronology of the events and transactions under inquiry. (Id.)

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Copyright 2016 Fred L. Abrams

7402945976_8ca11c5515_qThis is the 9th post in my series discussing private investigators.  It highlights former private investigators Elaine White & Cullen Johnson who were convicted of a money laundering conspiracy.  The conspiracy involved bogus asset searches Ms. White & Mr. Johnson apparently performed for their clients.  Mr. Johnson seemed to blame the bogus searches on ‘the fog of information.’ As also set forth below, Ms. White recently petitioned for a writ of habeas corpus arguing she should be resentenced in her criminal case.  

From about 2006-2012 ex-Toronto private investigator Elaine White &/or her husband ex-police detective Cullen Johnson, offered asset searches including a search for bank accounts.  Ms. White’s & Mr. Johnson’s clients were licensed private investigators, divorcing spouses & others seeking assets hidden from them.  Ms. White &/or Mr. Johnson however, supplied their clients with phony financial data/spurious bank account information.  As reported at “Island-hopping private eyes indicted on fraud, money laundering charges,” police criminally charged Ms. White & Mr. Johnson for frauds related to clients in Canada.

Ms. White & Mr. Johnson then fled to the Bahamas & the Turks & Caicos Islands.  Next, they were extradited from the Turks & Caicos Islands to face criminal charges in Newport News, Virginia in USA v. White, et al. Docket No. 4:13-cr-00047.  An August 23, 2012 Affidavit In Support Of Criminal Complaint And Arrest Warrant described the criminal case against Ms. White & Mr. Johnson.  Ms. White’s & Mr. Johnson’s April 10, 2013 indictment also said they had “operated a purported asset locator business for clients.”  During September 2013, Mr. Johnson pleaded guilty to Count Two of the indictment (i.e. conspiracy to commit money laundering).  On October 7, 2013 the Court also accepted Ms. White’s guilty plea to Count Two.

The Statement of Facts at Ms. White’s plea agreement showed that Ms. White had provided her clients with “false and fraudulent data and fabricated bank records…”  Mr. Johnson also wrote a December 24, 2013 letter discussing the bogus private investigations.  According to the letter available here, Mr. Johnson’s ‘misjudgments’ in the investigations were due to the ‘fog of information’:

IF THE EXPRESSION THE “FOG OF WAR” IS DEEMED TO BE ACCEPTABLE AND RECOGNIZED AS BASIS FOR EXPLAINING TRAGIC MISJUDGEMENTS AND ERRORS IN MILITARY SITUATIONS, THE EXPRESSION THE “FOG OF INFORMATION” SHOULD BE DEEMED TO BE AN ACCEPTABLE AND RECOGNIZED BASIS FOR EXPLAINING OTHERWISE IRRATIONAL MISJUDGEMENTS AND ERRORS IN INVESTIGATION SITUATIONS.¹

On January 16, 2014 Ms. White & Mr. Johnson were both sentenced to 66 months in prison, 3 years of supervised release and ordered to pay $1,021,738 in restitution.  Ms. White is reportedly serving this sentence at the low-security federal prison in Aliceville, Alabama.  While there, Ms. White drafted her December 21, 2015 Petition For A Writ of Habeas Corpus Under 28 U.S.C. § 2255.  At the Petition, Ms. White alleges she had ineffective assistance of counsel during her criminal case & that she is entitled to a resentencing.

¹ Page numbered “17” at Cullen Johnson’s December 24, 2013 letter, (Docket Entry 76), U.S.A. v. White et al., United States District Court, Eastern District of Virginia, Docket No. 4:13-cr-00047.

Image courtesy of Flickr (Licensed) by Tsahi Levent-Levi.

Copyright 2016 Fred L. Abrams

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Favorite Asset Search Blog posts from 2015 include:

 

ERR Rembrandt111-SC-374664Recovering Art Assets & Cultural Heritage Propertycovers how divorcing spouses; terrorists & others may employ art to hide their assets.  This post was written by Leila A. Amineddoleh, Esq. who is an art and cultural heritage lawyer and an adjunct professor at Fordham University School of Law.

 

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 Private Investigators: A Surreptitious Search For Money Hidden In Divorce & Other Cases— discusses what might possibly go wrong during a search for hidden assets. It mentions searching for assets by using wiretaps; bank searches; law enforcement databases & physical surveillance.

 

FTC video sharing infoData Brokers Searching For Your Assets, Bank Accounts & Other Personal Information?explains that data brokers mine data & harvest your private information.  The information can consist of “where and when you open a bank account; estimated household income; the assets you own; loan history; credit card use and tax return transcripts.”

Screen Shot 2015-12-28 at 5.34.06 PMRed Flags & The IRS Search For Attorney Memmott’s Assets—analyzes a tax fraud prosecution.  In this case, prosecutors claimed Attorney Orion Douglas Memmott concealed assets through nominees (i.e. intermediaries), back-dated promissory notes & a business bank account.

 

First Image: macbrianmun/Shutterstock.com

Second Image: National Archives and Records Administration

Third Image courtesy of Flickr (Licensed) by Byung Kyu Park

Fourth Image: Courtesy of U.S. Department of Homeland Security/U.S. Immigration & Customs Enforcement

Fifth Image courtesy of Flickr (Licensed) by DonkeyHotey

Copyright 2015 Fred L. Abrams

Divorce Image 1782 Petition

This 27th post in the “Divorce & Hidden Money” series looks at a way to search for assets in the U.S. when your underlying divorce case is brought outside of the U.S.

If your underlying divorce case is commenced in a foreign country, how do you search for secret bank accounts or other kinds of assets your spouse hid in the U.S?  You may be able to search for assets your spouse hid in the U.S. by filing a petition in U.S. federal court pursuant to 28 U.S.C. § 1782 (hereinafter “the petition”).

By filing the petition you might elicit evidence from bank & other witnesses who reside in the U.S. You could use the petition to gather evidence about any of your spouse’s U.S.-based: bank accounts; stocks & bonds; business entities; real estate; intellectual property licenses; etc. To file a legally sufficient petition, you must satisfy three statutory requirements:

  1. the bank or other witness the subject of your petition must reside or be found in the district where the court sits;
  2. the evidence possessed by the witness will be used in a foreign case;
  3. you must be an interested party.

The 28 U.S.C. § 1782 petition¹ below was granted via an April 12, 2012 order from the U.S. District Court in Delaware.  This petition sought evidence from a witness in Delaware regarding alimony in a Turkish family court case:

(Click On The Translated Copy Of The Petition)

¹The § 1782 petition has been partly sanitized for privacy reasons.

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Copyright 2015 Fred L. Abrams

Talking Points Photo

The following is a list of Asset Search Blog posts which discuss data brokers; private investigators; bankers; suspected tax fraudsters; etc.  As these posts show, asset searches & asset recoveries sometimes raise privacy &/or criminal law issues.

A)  Data Brokers, Data Mining & Your Privacy

  1. Data Brokers Searching For Your Assets, Bank Accounts & Other Personal Information?
  2. Government Data Mining & An Asset Search

B) Possible Illegal Asset Searches

  1. Private Investigators & Their Clients Facing Criminal Prosecution Over Illegal Asset Searches
  2. Private Investigators: A Surreptitious Search For Money Hidden In Divorce & Other Cases
  3. Private Investigators: 5 Things To Be Aware Of When Hiring A PI For A Bank Account Search
  4. Searching For Assets By Using Insiders At A Bank
  5. Searching Law Enforcement Data Bases For Your Personal Information?

C)  Criminal Prosecution For Hiding Assets

  1. An Asset Search, Tax Fraud & Divorce
  2. Prosecuting Offshore Bankers Who Allegedly Help Tax Evaders Hide Assets From The IRS
  3. Red Flags & The IRS Search For Attorney Memmott’s Assets
  4. Concealing Assets In More Than $150 Trusts?

Image: zsirosistvan/Shutterstock.com

Copyright 2015 Fred L. Abrams

shutterstock_74836111

If you are a divorcing spouse, judgment creditor or anyone else who believes they may need to do a bank search to locate hidden assets parked offshore, read this post to see how individuals sometimes hide their assets.  It covers the legal remedies that may be available to you in your asset search for offshore bank accounts.  This post was first published in 2013 and was called “Hidden Assets Offshore & A Bank Search To Find Them.”

Beneficial owners around the world are able to secretly transfer assets across international borders into offshore bank accounts.  The beneficial owners sometimes do this by money laundering through multiple jurisdictions; bulk-cash smuggling; back-to-back loans; shell companies; nominee incorporation services & gatekeepers like lawyers.  Legal remedies are however, usually available for finding hidden assets transferred offshore.  These remedies may even include seeking a court order directing a Swiss or other offshore bank to perform a bank search and disclose bank customer information.

MONEY LAUNDERING

The link chart below describes how one divorcing husband concealed both undeclared revenue and marital assets via multiple jurisdictions.¹  The husband laundered millions from the U.S., through a Swiss bank and a German one.  Prior to the equitable distribution hearing in his divorce, the husband alleged he had a liability of $29 million owed to a prime bank in Germany because of an arm’s length business loan.  As this link chart reveals, the supposed arm’s length loan was back-to-back , (i.e. a fully collateralized loan in which the borrower and the lender are one and the same):

(Click On The Link Chart To Enlarge)

Continue Reading An Asset Search To Find Secret Offshore Bank Accounts

shutterstock_115001698Part 1 of this post discussed the judgment creditors in Havlish v. bin Laden who are are trying to interdict assets owned by Iran.  Part 1 explained the judgment creditors sought to attach monies reportedly earmarked for the purchase of Airbus aircraft. Before seeking the attachment of the monies, the judgment creditors subpoenaed confidential information kept at U.S. Treasury’s Office of Foreign Assets Control (“OFAC”).  This confidential information could help the judgment creditors search for bank accounts or other assets Iran beneficially owns.

OFAC agreed to release the confidential information after the judgment creditors served OFAC with subpoenas & after the Court issued protective orders restricting the judgment creditors’ use of the information.  Via their subpoena dated March 2, 2015, the judgment creditors first requested confidential information about assets in the U.S. blocked at financial institutions because of economic sanctions against Iran.  This subpoena requested that OFAC provide the judgment creditors with the following:

[a]s of March 2, 2015, a list of all financial institutions holding assets in the United States that are blocked due to a nexus with the government of the Islamic Republic of Iran, its political subdivisions, and its agencies and instrumentalities, and the total such assets reported by each such institution, rounded to the nearest $100,000.

The judgment creditors next broadened their asset search by serving a May 17, 2015 subpoena on OFAC.  The May 17th subpoena requested seven categories of information from OFAC regarding: Iran’s financial accounts which had been frozen in Switzerland; financial accounts of Iran’s Mahan Air; financial accounts maintained by the Hezbollah, al Qaeda and Taliban terrorist groups; financial accounts at 3 banks in China; etc.  Click here to view the May 17th subpoena.

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Copyright 2015-2018 Fred L. Abrams

Photo Insider

This is my 21st post in the Divorce & Hidden Money series.  It is also the 8th post in my series describing what private investigators can and cannot do legally when searching for hidden assets.  My July 13th post mentioned private investigators & their clients using law enforcement databases and illegal pretext calls to search for assets.  As a practicing attorney, I am aware of another kind of asset search which would be illegal & this post describes it.  The post provides a hypothetical account which discusses a divorcing wife who hired a private investigator.  The private investigator in this hypothetical account, illegally obtains bank account information from an insider—a teller at a bank located in Nevada.

THE DIVORCING WIFE IN NEW JERSEY

Even though Ralph was a medical doctor with a thriving private practice, Ralph claimed in his New Jersey divorce that he had a low net worth.  Ralph’s divorcing wife Nancy suspected Ralph had hidden money in anticipation of the divorce.  Nancy gathered documents she obtained during the pretrial discovery phase of the divorce and before.

These documents included copies of Ralph’s: passport, statements for airline frequent flyer miles, phone bills, tax filings and additional financial records.  Nancy gave the documents to Mike, the licensed private investigator Nancy retained to perform an asset search regarding Ralph.  After conducting an investigation for more than a month, Mike told Nancy that Ralph hid monies at offshore banks and at a bank in Nevada.

THE SEARCH FOR SECRET BANK ACCOUNTS

Mike stated that Ralph secretly maintained about $2.5 million dollars in the offshore bank accounts which were located in high-risk geographical locations known for money laundering.  Ralph had supposedly hidden another $85,000 dollars in the secret bank account in Nevada.  Mike explained to Nancy that he could collect evidence regarding the secret bank accounts by conducting searches at the Nevada and the offshore banks.

Nancy paid Mike over $10,000 dollars for the bank account searches and Mike provided Nancy with an investigative report summarizing his search results.  The report named the offshore banks and the Nevada bank Ralph supposedly used to hide his money.  It supplied the purported secret bank account numbers; account balances and detailed the bank signatory information.

The report meanwhile, never explained the source of Mike’s information/how Mike detected Ralph’s supposed secret bank accounts.  When Nancy asked Mike how he had obtained the information at the report, Mike said the report was completely reliable.  A trusted colleague supplied Ralph’s offshore bank account information, Mike said.  Mike also explained he obtained Ralph’s Nevada bank account information from an “insider”, a teller who worked for the Nevada bank.  According to Mike, the insider used the bank’s computer system to sneak a peek at Ralph’s $85,000 dollar bank account.

THE U.S. CRIMINAL LAW VIOLATION IN NEVADA

Assuming that Mike’s representations to Nancy were true, then the bank teller and Mike could have violated privacy and other U.S. laws.  The two may have conspired to access Ralph’s Nevada bank account information in violation of  18 U.S.C. §1030  (Fraud and related activity in connection with computers).  Another type of case involving an insider at a bank was U.S.A. v. Feliciano, 2:09−cr−00197−NS.  The March 2009 indictment filed in Feliciano, alleged that a bank teller had stolen confidential customer information as part of a bank fraud/identity theft scheme.

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Second image courtesy of Flickr (Licensed) by Tsahi Levent-Levi

Copyright 2015 Fred L. Abrams

Accusation Photo

This post discusses when federal prosecutors might initiate a criminal prosecution against private investigators and their clients as a consequence of an illegal asset search.  It is the 7th post in my series covering private investigators.

If you are a divorcing spouse; heir under a will; a creditor; etc., you may hire a private investigator to help you search for hidden assets.  Your private investigator might then try to detect assets/discover leads by reviewing: passports; phone records; bank account statements; credit card transactions; tax filings; or other confidential information.  What if your private investigator illegally obtained this confidential information from sources like law enforcement databases in the U.S. or by making illegal pretext calls in the U.S.?

Could federal prosecutors then accuse you of crimes because your private investigator performed this illegal asset search for you?  If you knew that confidential information was going to be illegally obtained, prosecutors might initiate a criminal prosecution against you.  The December 6, 2007 press release issued in U.S.A. vs. Torrella et. al. 3:07-cr-05775 discussed the significance of this element of knowledge.  The press release said that several private investigators had been accused of illegally obtaining confidential information.  The private investigators supposedly wanted “to uncover assets or income” during investigations they performed for their clients.  According to the press release, the U.S. Attorney indicated a willingness to criminally prosecute the clients if the clients knew the ‘information was obtained illegally’:

This indictment alleges that private investigators across the country illegally obtained confidential information and sold it to the clients who hired them,’ said United States Attorney Jeffrey C. Sullivan. ‘This is a very serious matter, the investigation is continuing and it is our intention to go after these ‘clients’ if we can prove that they knew this information was obtained illegally.’

In deciding whether to initiate criminal charges against you, federal prosecutors would also follow “the principle that, ordinarily, the attorney for the government should initiate or recommend Federal prosecution if he/she believes that the person’s conduct constitutes a Federal offense and that the admissible evidence probably will be sufficient to obtain and sustain a conviction.”  U.S. Dep’t of Justice, United States Attorneys’ Manual 9-27.220 §B Comment (1997).

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Second image courtesy of Flickr (Licensed) by Tsahi Levent-Levi

Copyright 2015 Fred L. Abrams