My post “Four Asset Concealment Tools” says that assets can be hidden by fraudulently transferring them to a trust. This 15th post in the “Divorce & Hidden Money” series concentrates on the evidence a divorcing spouse might try to collect if marital assets are concealed by a trust.
A spouse can
Divorcing spouses, debtors, determined criminals or others may hide and secretly transfer art assets and cultural heritage property. The article below was written by Leila Amineddoleh Partner at Tarter, Krinsky & Drogin LLC where she specializes in art law. Ms. Amineddoleh teaches International Art & Cultural Heritage Law at Fordham University School of Law and St. John’s University School of Law. Her article explains that art and cultural heritage property can be used to conceal assets in a variety of ways. The article covers these topics:
I. Forgeries, Illicit Imports & Smuggling
II. Valuating Art In A Divorce
III. Art Transfers By Terrorists & Other Criminals
IV. Suing Over Art
By Leila Amineddoleh, Esq.
Not only are art and antiquities beautiful, fascinating, and rich in cultural significance, but they can be great investments. The growing interest in the art world has introduced a new wave of investment products; entire companies have developed in the field of art investment consultation, using art as an alternative investment type. Some economists even claim that art is more secure than stocks, citing the fact that art outperforms the stock market.[1] Since the Second World War, groups of wealthy investors purchased artwork during unstable economic periods. And as with other asset classes, art and antiquities can be used as vehicles for hiding assets.
One of the most frustrating aspects of art and antiquities collecting relates to valuation. There is a vast disparity between values for authentic versus forged objects. For example, where a convincing copy of a Jackson Pollock may sell for a few thousand dollars, an authentic work by the Abstract expressionist painter may sell for up to $50 million. And as the past couple decades have demonstrated, it can be difficult to ascertain which works are by the hand of a purported artist versus a talented art forger. (This difficulty recently became headline news as art investors sued the well-known Knoedler Gallery for selling multi-million dollar forgeries.[2])
These same complications arise with antiquities. It is not only difficult to determine whether an artifact is authentic, but it can be challenging to determine its origin. Smugglers bring antiquities into the US, but lie about the origin of the objects. Illicit importing has been committed in ingenious ways: some smugglers will cover an authentic antiquity in a plastic coating to make the object appear to be a cheap tourist toy; once the object has passed through customs, the plastic coating is removed and the valuable cultural object is revealed.[3] Other smugglers don’t even disguise the works, they simply claim that ancient artifacts are modern-day trinkets bought while abroad. Another way that people misrepresent objects relates to the find spot (the location where an artifact was excavated). By lying about the object’s origin, smugglers conceal valuable information regarding the work’s creation, greatly affecting the value and legality of a work. (For example, objects from Syria have been recently scrutinized for fear that looted artifacts enter the US and fuel the market for illicit objects. So smugglers now claim that these looted works are from other areas of the Middle East, thereby avoiding detection by U.S. Immigration and Customs Enforcement.)
Continue Reading Recovering Art Assets & Cultural Heritage Property
This 14th post in the “Divorce & Hidden Money” series focuses on an ex-husband who lived offshore and had not paid child support or spousal maintenance for decades. In such situations, letters rogatory might be filed to help gather evidence about any assets hidden offshore. If assets are hidden offshore, another remedy may be filing a lawsuit alleging assets have been fraudulently transferred.
For thirty years the ex-husband in Janet O. v. James O., slip op. 51985 (Sup. Ct. N.Y. County, October 17, 2006) had not made one single child or spousal maintenance support payment. By living in places like Barbados, the Dominican Republic and Mexico, the ex-husband had offshore asset protection and could hinder enforcement proceedings brought for his ex-wife &/or their three sons. After the divorce, the ex-husband remarried and adopted his new wife’s two daughters. Meanwhile, his ex-wife and three sons were relegated to a life of hardship, poverty and public assistance.
One of their sons even had to quit college to become a construction worker to support the ex-wife. Likely to have little practical effect on the absconding ex-husband were: the seizure of New York bank accounts, income tax refunds and lottery winnings; the denial of new and renewed passports; driving license restrictions and the referral of cases for criminal prosecution. See generally N.Y. Dom. Rel. §§ 244; 244 (a) – (d) & 245, Family Court Act §§454, 458-a, 458-b & N.Y. Civ. Prac. L & R § 5241. Given the ex-husband’s default for decades, the Janet O. Court did however, indicate it would seek the ex-husband’s extradition.
Although it was not financially feasible for the above-mentioned ex-wife, a letter rogatory, (a.k.a legal assistance request or letter of request), might have helped her situation. In some cases, letters rogatory can be effective against a divorcing spouse or non-custodial parent hiding assets offshore. By filing letters rogatory, one may search for secret bank accounts &/or collect financial evidence from witnesses residing offshore. Letters rogatory are often sought pursuant to The Hague Convention, Taking of Evidence (1970) No. 20.¹ A New York court may issue a letter rogatory to a foreign court as contemplated by Fed. R. Civ. P. 28 (b); Fed. R. Civ. P. 4(f)(2)(B); &/or N.Y. Civ. Prac. L & R 3018. N.Y. Civ. Prac. L & R 3108 for example, says:
Continue Reading Divorce & Hidden Money: Filing Letters Rogatory & Lawsuits Over Offshore Assets
The City of Zürich has a website that says “[a]s the largest city in Switzerland, Zürich is the economic motor of the surrounding region and indeed the whole country.” This 13th post in the “Divorce & Hidden Money” series examines what a divorcing spouse might do if marital assets are concealed in a Zürich bank account or elsewhere in Switzerland. The post was first published at The Asset Search Blog during 2008 and the post still provides up-to-date information. The post analyzes ways one can interdict bank accounts & other assets hidden in Switzerland. It quotes Swiss counsel who describes using criminal law tools; attaching (i.e. freezing) assets; seeking letters rogatory; & tipping the Swiss Money Laundering Reporting Office (“MROS”):
“As you probably know, Switzerland does not follow the common law doctrine. We do not adhere to the institution of discovery. The usual tools available to a claimant are therefore the filing of a criminal complaint, which is actually the most efficient way to get past the banking secrecy. Access to the information will be granted only if someone can be indicted. In exceptional circumstances a broader access to the information collected within the frame of the criminal investigation can be granted on a discretionary basis.
If the claimant does not wish to resort to the criminal law tools, he has the option to file an attachment. In order to obtain an attachment, the claimant must show that his case presents a close enough connection to Switzerland. He must establish that the assets are located in Switzerland and he must make a summary statement of his claim.
It is usually required that a guarantee equivalent to 10% of the claim be filed; in certain circumstances, the payment of a guarantee requirement may be avoided especially where the claimant initially filed a criminal complaint under which the same assets have been attached by the criminal judge. The combination of a criminal and civil attachment is recommended in some instances.
Continue Reading Divorce & Hidden Money: How Does A Divorcing Spouse Recover Assets Concealed In A Swiss Bank Account?
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
Like my posts dated July 3 & February 3, 2014 & December 9, 2013, today’s post outlines tactics for hiding assets. Today’s post is also the 11th post in my Divorce & Hidden Money series.
Your divorcing husband/wife may try to cheat you out of your fair share of marital assets by employing the
This is the 2nd post in my series about private investigators & what they can & cannot do legally when searching for assets. It is also the 10th post in my Divorce & Hidden Money series. The Huffington Post article “Uncovering Hidden Assets In Divorce Litigation” observes that information obtained by “surreptitious means” might be used by one divorcing spouse against the other. Obtaining information through a surreptitious search can be critical to recovering assets in a broad range of criminal & civil cases. Depending on the circumstances, surreptitious searches might involve wiretaps; bank searches; law enforcement databases; and physical surveillance. These surreptitious means have however, sometimes been abused by private investigators, attorneys & others in the following ways:
WIRETAPS– As stated in testimony at a 1967 U.S. Senate hearing ‘private bugging in this country can be divided into two broad categories, commercial espionage and marital litigation.’ ¹ Former attorney Mary Nolan handled divorce & family law matters for nearly 30 years before pleading guilty to the wiretapping & tax fraud charges at counts 1-4 &/or 6 of her 2012 criminal indictment. An amended judgment showed Ms. Nolan was sentenced to serve 24 months in prison, 3 years of supervised release, etc. Ms. Nolan’s sentencing memorandum said her cases frequently involved allegations that husbands were hiding assets. The prosecutor’s sentencing memorandum meanwhile, claimed Ms. Nolan had employed a private investigator “to install eavesdropping devices in cars used by her clients’ spouses for use in their divorce proceedings.”
BANK SEARCHES– Some private investigators try to surreptitiously search banks in the U.S. for accounts secretly opened by divorcing spouses, debtors, etc. These investigators may claim they search through computer research; insiders; or information brokers. Private investigators cannot ordinarily search banks legally because of privacy and other U.S. laws, as explained by the post available here. The Court has also noted “it is more likely than not that the only way that information brokers can obtain private financial information from banks is through the use of deception and trickery, including impersonation of account holders.” Commonwealth v. Source One Associates, Inc., No. CIV. A. 98-0507-H, 1999 WL 975120, at *6 (Mass. Super. Oct. 12, 1999) aff’d sub nom. Com. v. Source One Associates, Inc., 436 Mass. 118, 763 N.E.2d 42 (2002).
Continue Reading Private Investigators: A Surreptitious Search For Money Hidden In Divorce & Other Cases
How can one detect assets one is unaware of? Sometimes by putting tipsters to work and collecting their tips. These tips may be gathered in a variety of ways. “An Asset Search, Tax Fraud & Divorce” describes a private investigation in which a prospective tipster was interviewed by “Brian”, an ex-IRS Special Agent and former high-ranking official at FinCEN.
Brian conducted the interview on behalf of a divorcing wife trying to locate marital assets hidden by her divorcing husband. “Warsaw Prosecutors Eye Possible Money Laundering At 50 Platowcowa Street” mentions a tip supplied by an anonymous letter. This tip letter caused Polish prosecutors to launch a money laundering investigation and search for assets connected to a suspected shell company in Delaware.
Meanwhile, the whistleblower programs at the U.S. Internal Revenue Service and the U.S. Securities Exchange Commission, (“the Commission”), also collect tips. The two programs respectively sniff out tips about assets hidden in tax or securities frauds. The article “What Happens To An SEC Whistleblower Tip?” available below, gives an insider’s view of the Commission’s whistleblower program. One of the article’s authors is Jordan A. Thomas, a former assistant director in the Commission’s Enforcement Division. Mr. Thomas had a leadership role in developing the Commission’s whistleblower program and he is now a partner and chair of the Whistleblower Representation Practice at Labaton Sucharow LLP.
This is the first post in my new series about what private investigators can & cannot do legally when searching for hidden assets. Divorcing spouses, creditors bringing forced collection proceedings, etc., may search for assets by hiring private investigators and/or information brokers who try to detect secret bank accounts. The post asks: what standards should be followed when investigating bank accounts at U.S. financial institutions? At the conclusion it discusses some best practices. The post’s talking points are:
Virginia private investigator Arcanum Investigations, Inc. apparently offers bank account searches through the Docusearch.com, (“Docusearch”), website. For $249.00 plus $50 for each open bank account detected, Docusearch says it “[i]dentifies all bank accounts,” “[b]ank name and address,” “[a]ccount titles, where available“, “[a]ccount type” and “[a]pproximate account balance, where available.” The website states that Docusearch “will continue to search all major banks…”:
“We will not stop searching once an account is located. We will continue to search all major banks and credit unions nationwide and locality of the subject. No account numbers will be returned. Your attorney may subpoena all bank records (directly) from the bank once account(s) have been identified.”
The Docusearch “How To Find Hidden Bank Accounts” video asserts “our licensed private investigators specialize in finding hidden assets, secret bank accounts and other financial information that people work so hard to hide.” The video says “[o]ur licensed private investigators and asset search specialists have access to protected information that’s usually reserved just for law enforcement…plus you can rest easy knowing all of our work is done in compliance with all bank privacy laws.”
This is the ninth post in the “Divorce & Hidden Money” series. By failing to disclose any offshore assets, one divorcing spouse may cheat the other out of child support, alimony or other court awards. A spouse cheated this way might however, file requests for judicial assistance, (a.k.a. requests for legal assistance, letters of request, or letters rogatory), in a foreign country to collect evidence from witnesses residing there.
Evidence collected from the foreign witnesses may prove a divorcing spouse concealed bank accounts, businesses, real estate or additional assets offshore. The post highlights a request for judicial assistance in the U.S. filed by Helga Glock, (“Ms. Glock”), former wife of billionaire Gaston Glock, (“Mr. Glock”), inventor of the Glock pistol. It features a January 31, 2010 letter Mr. Glock allegedly wrote to his family discussing his plans for them. The post also discusses accessing Swiss bank account information and updates Helga Glock Claims Gaston Glock Started Concealing His Assets, published January 1st.
After her divorce from Mr. Glock in Austria on June 27, 2011, Ms. Glock made a March 18, 2013 request for judicial assistance, (“the Request”), in the case called In Re: Application of H.M.G., Index No. 13-cv-02598. The Request included a January 31, 2010 letter, (“the Letter”), Mr. Glock allegedly wrote to his family. If genuine, the Letter gives a glimpse of Mr. Glock’s dealings with Ms. Glock and their children who worked in the family’s gunmaking business. The Letter mentioned “the Privatstiftung”, a trust/Austrian private foundation Mr. Glock, Ms. Glock and others reportedly set up as co-settlors. Some of the key points Mr. Glock allegedly made at the Letter were:
(Click On The Image To Read The Letter & Its English Translation)
