The Gramm-Leach-Bliley Act (GLBA) at 15 U.S.C. § 6801 et. seq., protects the privacy of customers who provide information to U.S. financial institutions. Although there are some important exceptions mentioned at 15 U.S.C. §6821(c) – (g), GLBA restricts access to “nonpublic personal information” like bank account numbers, account balances, etc. In some cases,
Nathan Vardi’s News Beat, Money Laundering
Mr. Nathan Vardi is an associate editor at Forbes Magazine and his news beat is money laundering. His articles describe how drug dealers have sometimes used American Express, BankAtlantic, Union Bank of California / UnionBanCal and other U.S. financial institutions to launder money:
Bearer Shares & An Asset Search
In the recent past, bearer shares especially allowed for anonymous corporate ownership. A corporation that issued bearer shares had no central registry of the bearer share ownership. As a glossary from the The Financial Action Task Force explains, “[b]earer shares refers to negotiable instruments that accord ownership in a legal person to the person
Following The Money Trail In Zurich
While “Roger” and I were walking near Bahnhofstrasse Street, Zurich, Roger suddenly stopped and had us duck into a corner shop. Once inside the shop Roger appeared to be looking for a particular item displayed in the shop’s front window, although he was really scrutinizing the outside street. He explained afterwards how it was necessary to check if we were being followed: “But first you must choose a side street or a main street where there are not many pedestrians or traffic, not a busy thoroughfare. You take mental pictures of everyone you think could be potential followers or surveillance cars as you continue along, before entering a store with windows which will permit you to survey the street“.
Roger had a knack for locating offshore financial information because of his former work as an intelligence officer. He and I were in Zurich on our way to meet my local Swiss counsel. We were following the money trail of a financial fraudster who pretended in his U.S. court case to have a negative net worth. Roger had brought with him the details of the fraudster’s finances, which demonstrated that the fraudster had hidden tens of millions of dollars by money laundering through Switzerland. Roger was about to share this information with me for the first time, at our meeting with the Swiss counsel.
In some cases, offshore financial information discovered during an asset search suggests that a foreign criminal law has been violated. In Switzerland for example, one might conceivably violate criminal laws by lying about the beneficial ownership of a bank account, as mentioned in this legal memo from Swiss counsel:
(To Read The Legal Memo, Click On The Image Above)Continue Reading Following The Money Trail In Zurich
Using Multiple Jurisdictions To Launder Money
Parking assets offshore in one jurisdiction and then exercising control over them through another, sometimes indicates money laundering. One example of how multiple jurisdictions may have been used to facilitate money laundering, is the case of United States v. Proceeds of Crime Transferred to Certain Domestic Financial Accounts, U.S. District Court for the
High-Risk Locations & An Asset Search
An investigation of a high-risk geographical location can sometimes uncover assets which have been hidden through: nominees; shell companies; cash couriers; wire transfers; credit cards; informal banking systems, etc. For example, one way the IRS focuses on high-risk locations like tax havens, is to compare the banking information it receives from the Financial Crimes
Nominees & Hidden Assets
I. NOMINEE BANK ACCOUNTS
Beneficial owners can try to use a nominee, (i.e. intermediary/straw owner), to hide money with complete anonymity in a bank account. Through websites like Offshore-Protection.com beneficial owners may purchase a shell company and retain a nominee director for the shell company. The beneficial owner may then title a bank account in
An Asset Search In Switzerland
A former Criminal Intelligence Specialist at Scotland Yard confirmed that the divorcing husband was hiding millions from his wife by using bank accounts in Switzerland. The husband’s true beneficial ownership of these funds had been concealed by a nominee (i.e. intermediary). This nominee had opened the Swiss bank accounts in the names of shell corporations
Fighting Financial Fraud At UK Banks
In the United States, the Financial Crimes Enforcement Network regulates the customer identification procedures, (a.k.a “know your customer rules”), at banks. In order to clarify these procedures, the Financial Crimes Enforcement Network issued guidance in January 2004. These customer identification procedures codified at 31 C.F.R Part 103.121, demonstrate that there is no discretion
Money Laundering, Marital Assets & Divorce
Money laundering circuits sometimes operate in the U.S. through domestic bank accounts used as “laundering links”. It is also true that money laundering circuits washing vast sums of money, will typically do so through offshore bank accounts located in tax havens like Switzerland, Luxembourg, the Cayman Islands, etc. Such was the case of one divorcing