Hidden Money

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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.

What Happens To An SEC Whistleblower Tip?¹

One of the questions we’re frequently asked by clients and prospective clients is “what happens to a whistleblower tip once it’s submitted to the SEC, and how does the SEC determine which tips to actively investigate?” These are crucial questions for any potential whistleblower, especially given that the SEC receives approximately 30,000 tips, complaints and referral each year – 3,200 of which were whistleblower tips in 2013 – but can only conduct about 700 active enforcement investigations each year.
Continue Reading Detecting Hidden Assets By Putting Tipsters To Work

At Carmelite Chambers International Fraud & Assert Recovery Conference, I met Advocate & English Barrister Stephen Baker of Baker & Partners from St. Helier, Jersey.  During the Conference, Mr. Baker presented his slideshow with case studies about recovering suspected corruption proceeds or other assets.

Some of Mr. Baker’s slides reveal how foreign bank accounts; multiple jurisdictions and nominees, (i.e. intermediaries), could be used as elements in suspected laundering schemes:

One topic Mr. Baker’s slideshow covers is the investigation of the late Nigerian dictator Sani Abacha.  As Baker & Partners’ webpage explains: “Baker & Partners were central to the successful Jersey investigation into the alleged laundering of the proceeds of the corrupt Nigerian Dictator General Abacha’s crimes through Jersey. This investigation has already resulted in over USD $160,000,000 being returned to Nigeria.”


Continue Reading Searching For Corruption Proceeds & Other Assets On The Island Of Jersey

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.    

THE LETTER TO MR. GLOCK’S FAMILY

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:

  • “In 1999 I decided to restructure the Glock Group and secure it for all succeeding generations to come through the  Privatstiftung (trust).”

  • “I guarantee the agreed upon payments to the beneficiaries for a lifetime.  I therefore expect appreciation, compliance and acceptance and the respect I deserve as a father.”

  • “I am working on a ‘Glock code of conduct’ which will be implemented and will require all employees and family who access the benefits to adhere to.”

  • “I will not allow any interference with my life long business endeavors.  Therefore, all employed family members will withdraw from the company’s operations.”

(Click On The Image To Read The Letter & Its English Translation)

 


Continue Reading Divorce & Hidden Money: Helga Glock’s Search For Gaston Glock’s Assets

This is the eighth post in the “Divorce & Hidden Money” series.  Like “Four Asset Concealment Tools” and “Four Ways Assets Can Be Secretly Transferred”, the post reveals methods a spouse may use to hide marital assets and keep more than his/her fair share of the marital estate.

Credit/Debit Cards- Using a credit or debit card which draws from a secret foreign bank account is one way divorcing spouses can secrete and/or launder assets.  This method is so common that the IRS established its Offshore Credit Card Program to detect tax cheats maintaining undeclared foreign accounts.

A ‘Zebra’ Strategy (a.k.a Commingling)- A divorcing spouse may conceal marital assets by commingling them with business or other assets.  This ‘zebra’ strategy of mixing assets, is mentioned by the article Cayman Bank Records Seized.   The article discusses Germany’s recent seizure of records and says that some Coutts Trust Company customers “followed a ‘zebra’ strategy of mixing legally declared and taxed accounts containing smaller amounts with undeclared accounts containing larger sums.”

Asset Protection Services- One promotor of these services is Capital Asset, Inc.  Its website claims that forming companies in Nevada, or Wyoming, or Delaware is preferable because: “Do you know that partnerships, corporations, LLCs in most states make you completely visible? If a judge can see your assets, he can seize them.”  Divorcing spouses may hire a promotor of asset protection services to establish such companies which can then be used to open bank accounts or maintain assets with anonymity.

Continue Reading Divorce & Hidden Money: Four Methods Spouses Sometimes Use To Conceal Assets

I will present my program “The Ins & Outs Of Recovering Assets Via Whistleblowers & Other Tipsters” in London at 11:40 AM June 23, 2014, during the Carmelite Chambers International Fraud & Asset Recovery Conference.   “The Ins & Outs Of Recovering Assets Via Whistleblowers & Other Tipsters” highlights how whistleblowers sniff out vast sums of money hidden through laundering and other asset concealment schemes.  I open the program by discussing the fact pattern of a divorcing husband hiding tens of millions of dollars from his wife and domestic tax authorities, by using shell companies, multiple jurisdictions, etc.

The program features Washington, DC attorney Jack Blum who will talk about the IRS Whistleblower Program.  Mr. Blum has been an expert witness for the U.S. Department of Justice and the Internal Revenue Service.  Mr. Blum additionally served as associate counsel, or assistant counsel, or special counsel to three U.S. Senate committees or subcommittees; and been quoted by or mentioned in thousands of newspaper and magazine articles around the world.

Since he resigned at the end of 2008, as “Of Counsel” to Baker & Hostetler’s Washington, DC office, Mr. Blum practices part-time for a select group of clients.  Just one of Mr. Blum’s clients is whistleblower Rudolf Elmer.  As described by “Swiss Banker Blows Whistle on Tax Evasion”, Mr. Elmer provided tips to the IRS, a U.S. Senate subcommittee and the Manhattan District Attorney’s Office, about suspected tax cheats with offshore bank accounts.  At a January 17, 2011 Frontline Club Press Conference, Mr. Elmer also supplied WikiLeaks with this same kind of information.  Mr. Elmer’s whistleblowing led to his criminal prosecution by Swiss authorities, on charges that he violated Swiss bank secrecy law.Continue Reading Carmelite Chambers International Fraud & Asset Recovery Conference

The search for the true identity of Bitcoin creator Mr. Satoshi Nakamoto is discussed by “Will the Real Satoshi Nakamoto Please Stand Up” and at a video:

Mt. Gox which was once the world’s largest Bitcoin currency exchange, is also in the news.  It made bankruptcy filings in Japan and the U.S. and reportedly lost virtual currency valued at $473 million.

Perhaps most important, is that Bitcoin and other virtual currency can be a major money laundering threat.  This is true because with anonymity, determined criminals may exchange their illicit monies for virtual currency.   As a USA Today editorial explains “drug dealers, tax cheats, money launderers and terrorists do have uses for such a currency. Bitcoin gives them a way to try to hide money or move it to places undetected.”

Moreover, a criminal’s hidden money would presumably be even harder to detect if that criminal used virtual currency like Bitcoin along with the kind of virtual office and internet bank mentioned at Wyomingcorporations.us.
Continue Reading Bitcoin & Other Virtual Currency As A Money Laundering Threat

The post “An Asset Search, Tax Fraud & Divorce” was first published at the Asset Search Blog on January 16, 2008.  It is republished below as the seventh post in the “Divorce & Hidden Money” series.  The post describes my investigation of a divorcing husband.  While I was the divorcing wife’s attorney, I discovered the husband had hidden money offshore in anticipation of the divorce.  I also suspected the husband concealed this money from the IRS in furtherance of a tax fraud.

If evidence of tax fraud is brought to the attention of a judge presiding over a divorce, the judge may report the fraud to the IRS.  When the divorcing husband admitted in his affidavit that he had not paid taxes, the judge in Hashimoto v. De La Rosa, 2004 slip op. 51081(Sup. Ct. N.Y. County, June 23, 2004) reported him to the I.R.S.  In Beth M. v. Joseph M., 2006 slip op. 51490 (Sup. Ct. Nassau County, July 25, 2006), the judge similarly reported a husband who testified during court proceedings that he had not filed tax returns for the years 1997 through 2001 and other times.

Some divorcing spouses meanwhile, directly tip the IRS about their spouse’s tax fraud.  The spouses supplying these tips may be eligible for a reward as participants in the IRS Whistleblower program.  It typically takes six or more years for an IRS whistleblower to collect any reward and a whistleblower can face many challenges.  More information about blowing the whistle is at the Reuters article Record $104 million reward boosts whistleblowing on tax cheats, which cites me; and the New York Times article The Price Whistle-Blowers Pay For Secrets.
Continue Reading Divorce & Hidden Money: Whistleblowing, Tax Fraud & Tipping The IRS

This is the sixth post in the “Divorce & Hidden Money” series.

“Four Ways Assets Can Be Secretly Transferred” mentioned methods some use to move assets across international borders.  My post regarding the 2011 divorce between Helga and Gaston Glock discussed additional asset concealment tools.  Any one or a combination…

This is the fourth post in the “Divorce & Hidden Money” series.

Mr. Gaston Glock’s creation of the ubiquitous Glock pistol turned him into a billionaire and he is thought to be one of the twenty wealthiest individuals in all of Austria.  Mr. Glock’s ex-wife Ms. Helga Glock meanwhile, suspected he is concealing marital assets which could be connected to the couple’s 2011 Austrian divorce.

Ms. Glock therefore used civil law tools in an attempt to detect any marital assets / alleged hidden monies Mr. Glock supposedly possessed.  The civil law tools Ms. Glock employed included: 1) her Swiss petition to freeze a UBS bank account reportedly maintained by Mr. Glock in Switzerland; and 2) the March 18, 2013 request for judicial assistance filed at In re application of: H.M.G., U.S. District Court for the Northern District of Georgia, Index No. 13-cv-02598.

MS. GLOCK’S MARCH 18th REQUEST FOR JUDICIAL ASSISTANCE

Ms. Glock’s March 7, 2013 affidavit filed at her request for judicial assistance, claimed Mr. Glock had earlier started hiding and moving personal and corporate assets in anticipation of the couple’s divorce.  The March 7th affidavit discussed Ms. Glock’s belief that Mr. Glock was trying to transfer assets out of her reach; and that there had allegedly been a steady flow of assets out of Austria.

According to the affidavit, there were financial transfers to the above-mentioned UBS Swiss bank account and to bank accounts in Liechtenstein or Luxembourg.  Also according to the affidavit, Mr. Glock had a Bermuda trust formed so that it could receive $51 million from “Glock”.  The affidavit additionally referred to the “worldwide Glock Group structure” and indicated the structure was thought to be partially depicted by this chart:

Continue Reading Divorce & Hidden Money: Helga Glock Claims Gaston Glock Started Concealing His Assets