If you claim in court that someone is hiding assets from you, you may need to use one or more of the asset search & asset recovery tools. You can use the tools to help you shoulder the burden of proving your claim.  Stated otherwise, you can use the tools to provide the Court with admissible evidence demonstrating the hidden assets exist. For example, a private investigator or tipster may allege your adversary hid assets from you at a secret offshore bank account.

You would want the Court to consider your adversary’s alleged secret bank account.  Therefore, you would have to collect banking documents from the offshore bank witness and then present them to the Court. The banking documents you collect must be authenticated and would consist of the: monthly bank account statements; bank signature cards; account opening documents; etc.

Furthermore, you would likely employ a letter rogatory to gather authenticated copies of these documents from the offshore bank. Besides letters rogatory, there are a wide variety of asset search and asset recovery tools. In your particular case, you may also need to use one or a combination of the following asset search & asset recovery tools:

  • applying for court orders freezing or blocking domestic or foreign bank accounts;
  • attaching real property & restraining other assets;
  • bringing asset turnover proceedings against intermediaries/strawpersons hiding assets;
  • filing lawsuits to recover assets fraudulently transferred to trusts; shell companies; & to others;
  • issuing subpoenas to & deposing witnesses in the U.S.;
  • domesticating out-of-state subpoenas & domesticating foreign judgments;
  • & seeking rewards as a tipster for the IRS or SEC Whistleblower Programs.

Image: Vectors Bang/Shutterstock.com

Copyright 2020 Fred L. Abrams

A Financial Intelligence Unit (“FIU”) tracks hidden assets by “following the money.”  There is always a money trail when assets are hidden and money is laundered. One way FIUs follow a money trail is by collecting suspicious activity reports from banks about bank customers. FIUs can follow a bank customer’s money trail by collaborating with other FIUs across the globe.

During your asset search you might also have to follow your adversary’s money trail. You may be able to follow your adversary’s money trail 3 ways:

Video: Courtesy of The Egmont Group of FIUs

Copyright 2020 Fred L. Abrams

In USA v. Pursley prosecutors alleged Houston attorney Jack Stephen Pursley helped his client Shaun Philip Mooney repatriate money hidden offshore. On August 5, 2020 Attorney Pursley was sentenced to two years of prison on conspiracy and tax evasion charges.

I.  Attorney Pursley’s Alleged $18 Million Transfer To The U.S.

Attorney Pursley was accused of secretly transferring more than $18 million from Mr. Mooney’s Isle of Man bank account.  Mr. Mooney reportedly maintained the account in the name of his Southeastern Shipping shell company. To allegedly hide the $18 million from the IRS, Attorney Pursley transferred the $18 million to the U.S. disguised as corporate investments or corporate purchases.  Meanwhile, Attorney Pursley apparently deposited the $18 million into bank accounts controlled by Mr. Pursley’s &/or Mr. Mooney’s shell companies. Then, Attorney Pursley reportedly used some of this money to make personal investments and buy personal real estate. Attorney Pursley’s purchases included his vacation home in Vail, Colorado and property in Houston, Texas.

II.  Attorney Pursley’s & Mr. Mooney’s Trip To Panama

Person Encounter List records from U.S. Customs and Border Patrol’s TECS information-sharing system showed Mr. Pursley and Mr. Mooney flew to Panama in 1999. During their trip, Attorney Pursley allegedly assisted Mr. Mooney with setting up Southeastern Shipping.  Next, Mr. Mooney is believed to have incorporated Southeastern Shipping in the Isle of Man on or about September 20, 2001.  The September 20, 2001 Nominee Declaration available below, suggests Southeastern Shipping’s director, (i.e. nominee director), could have been a strawperson. The Nominee Declaration says this nominee director was Eduard Francesco Venerabile from Niteroi, Brazil.

III.  Possible Money Laundering Indicators

If all of the foregoing is true, Attorney Pursley may have engaged in money laundering.  The money laundering indicators in USA v. Pursley could be the use of:

  1. a gatekeeper (i.e. Attorney Pursley);
  2. multiple jurisdictions such as Panama; the Isle of Man; Niteroi, Brazil; Houston, Texas; & Vail, Colorado;
  3. offshore bank accounts in Panama & the Isle of Man;
  4. shell companies;
  5. a nominee director;
  6. & the nominee bank accounts maintained in the name of shell companies.

Nominee Declaration Eduard Francisco VenerabileCopyright 2020 Fred L. Abrams

Harvard Professor Charles Lieber allegedly had: an 1) offshore credit/debit card; 2) an offshore bank account; 3) and supposedly made false statements to investigators.  Professor Lieber apparently used the three to hide money he earned from the Chinese Government. Therefore, in USA v. Lieber federal prosecutors filed Mr. Lieber’s 1/27/20 criminal complaint.  On 1/28/20 the FBI arrested Professor Lieber as part of its investigation of Chinese spies.

Professor Lieber is the former Chair of the Chemistry and Chemical Biology Department at Harvard University. He was also the Chief Investigator of the Lieber Research Group at Harvard. The U.S. Government paid over $15 million to the Lieber Research Group from 2008 to 2019. The $15 million was grant money for the Group’s research on behalf of the U.S. Department of Defense and the National Institute of Health.

i) Professor Lieber’s Alleged Work For China

However, from about 2012 to 2015 Professor Lieber apparently worked for the Chinese Government. During that time Professor Lieber is thought to have first secretly worked as a scientist at Wuhan University of Technology in China.  Then, Professor Lieber allegedly worked at China’s Thousand Talents Plan and agreed to set up a research lab.

The Thousand Talents Plan is believed to recruit individuals in the U.S. and elsewhere, to supply research and intellectual property to China. China reportedly paid Professor Lieber for years 2012 to 2015 up to $50,000 per month and up to $150,000 for living expenses.  China additionally, seemingly awarded $1.5 million to Professor Lieber so he could establish the research lab.

ii) How Professor Lieber Reportedly Hid Money

Professor Lieber allegedly hid these monies at an offshore account he maintained at a bank in China. The Chinese Government reportedly paid Professor Lieber by depositing money into the offshore account. Next, when Professor Lieber visited China he allegedly withdrew money from the offshore account by using an offshore credit/debit card.  Since this offshore bank in China had branches in NYC, Professor Lieber might have also withdrawn cash in NYC with the credit/debit card.

Furthermore, Professor Lieber is suspected of making false statements to investigators on 4/24/2018.  At that time, Professor Lieber allegedly lied about participating in China’s Thousand Talents Plan.  On 1/10/2019 Professor Lieber also allegedly told Harvard University he had not worked for the Thousand Talents Plan. This supposedly caused Harvard to make false statements to the National Institute of Health about Professor Lieber’s work for the Thousand Talents Plan.  Besides false statements, the 7/28/20 superseding indictment available below accuses Professor Lieber of tax fraud and failing to report his alleged offshore bank account:

Your adversary may be placing assets offshore to hide them from you. Meanwhile, you could be trying to locate these assets through an asset search.  One thing you might be able to do is spot the common methods for placing assets offshore. If you find your adversary used these methods, it might help you sniff out your adversary’s money trail. Common methods for placing assets offshore include:

  • Wire transfers are the most common way people/businesses transfer hidden money offshore. My post “Searching For Assets Hidden By Hawaladars” featured a suspected terrorist financing scheme (Egmont Group Case Ref. No.06060).  That scheme was facilitated by wire transfers to offshore bank accounts.
  • Bulk-cash smuggling: “Concealing Assets By Smuggling Cash.” has links to my posts about cash smuggling into: Liechtenstein, Iraq and Puerto Rico. It also mentioned 2 attempts to smuggle cash in boxes of laundry detergent at Texas border entries.
  • Portable valuable commodities: “Once Jailed Banker Gets $104 Million Whistleblower Payout” talks about ex-UBS banker Bradley Birkenfeld. Mr. Birkenfeld reportedly smuggled diamonds (i.e. portable valuable commodities) in a toothpaste tube across the U.S. border.  A 2008 press release similarly describes how governmental authorities interdicted $1.2 million in jewelry from a passenger arriving at NY’s JFK Airport.
  • Trade-based money laundering:  If your adversary uses a business to hide assets, your adversary could conceivably engage in trade-based money laundering. Trade-based launderig can involve transferring goods offshore. As The Financial Action Task Force (“FATF”) has said, trade-based money laundering consists of: over or under-invoicing of goods or services; the over or under-shipping of goods; falsely describing goods or services; or multiple invoicing.  To learn more about it, read the FATF’s 6/23/2006 publication.

Copyright 2020 Fred L. Abrams

Prosecutors in U.S.A. v. Kozel accuse Mr. Todd Kozel former CEO of Gulf Keystone Petroleum Ltd., of hiding assets by using lawyers, shell companies & trusts. The prosecutors claim Mr. Kozel fraudulently concealed assets from his ex-wife Ashley Kozel during the former couple’s Sarasota County Florida divorce. Mr. Kozel’s alleged scheme is believed to have occurred from about February 2012 to about December 2018.  Among other things, Mr. Kozel allegedly tried to evade a July 2015 $34 million judgment entered in favor of Ashley Kozel.

A) Lawyers, Shell Companies & Trusts

Mr. Kozel’s alleged scheme for hiding assets reportedly involved:

Mr. Hugelshofer’s law firm is thought to have established the Gokana Trust and believed to be its trustee. However, Mr. Kozel seemingly controlled the Gokana Trust through his Emeralp Trust Ltd. &/or shell companies. Mr. Kozel is suspected of secretly transferring 29 million oil company stock share certificates to the Gokana Trust. Additionally, Mr. Kozel reportedly purchased a New York City condominium by using the Gokana Trust & his alleged 212 West 18 LLC shell company.  Meanwhile, Mr. Hugelshofer is thought to have hired Mr. Freeman to manage the 212 West 18 LLC shell company.

B) Mr. Kozel’s Criminal Complaint & Indictment

As a result of Mr. Kozel’s suspected scheme to conceal assets, prosecutors filed Mr. Kozel’s 12/14/18 criminal complaint & his 6/19/19 indictment.  The criminal complaint & indictment in USA v. Kozel, alleged Mr. Kozel: conspired to commit wire fraud (18 U.S.C. § 1349); committed wire fraud (18 U.S.C. §§ 1343, 2); & conspired to commit money laundering (18 U.S.C. § 1956(h)). Page 3 ¶ 8 at Mr. Kozel’s criminal complaint also claimed Mr. Kozel failed to file tax returns for years 2011 through 2014. This was supposedly true even though Mr. Kozel is believed to have earned an average of about $10 million each of those years.

C) Mr. Freeman’s State Bar Complaint

Given Mr. Freeman’s alleged role in helping Mr. Kozel hide assets, The Florida Bar filed its 11/19/19 ethics complaint against Mr. Freeman.  The complaint in Florida Bar v. Michael J. Freeman, Case No. SC19-1946, alleges Mr. Freeman committed a fraud on the Court.  It basically accuses Mr. Freeman of creating and using backdated documents which hid Mr. Kozel’s true beneficial ownership of the New York City condo. As of this writing, Florida Bar v. Michael J. Freeman has been stayed pending the outcome of other recent litigation in Florida state court.

Copyright 2020 Fred L. Abrams

How does a divorcing spouse hide assets at trusts? The spouse hiding assets first forms a trust. Next, this spouse fraudulently transfers assets part of the marital estate, to the trust. The spouse hiding assets can also take money from the marital estate & use it to make purchases in the name of the trust.  Finally, the spouse hiding assets claims assets at the trust can not be distributed during the divorce because the trust assets are not part of the marital estate. Therefore, the spouse hiding assets at a trust makes an asset search or asset recovery more difficult.

I) Trusts In High-Profile Divorces

During high-profile divorces, one spouse sometimes alleges the other hid assets at trusts. Examples of this include Helga Glock’s divorce from billionaire gun maker Gaston Glock and Tatiana Akhmedova’s divorce from Russian energy billionaire Farkhad Akhmedov. The high-profile Texas divorce of billionaire Ed Bosarge Jr. from Marie Bosarge, similarly involves trusts. In their divorce, Marie Bosarge claims Ed Bosarge Jr. is hiding marital assets at trusts formed in South Dakota.

The video below about the Bosarge divorce, is from private investigator Wayne Dolcefino &/or Dolcefino Consulting. Mr. Dolcefino apparently investigated Ed Bosarge Jr. on behalf of Marie Bosarge. The video says Ed Bosarge Jr. is “now accused of secretly moving more than $2 billion worth of stuff…into a secretive South Dakota trust to leave Marie Bosarge penniless.”  Meanwhile, Ed Bosarge Jr. is worth an estimated $3.2 billion as reported at Houston Billionaire’s Bitter Divorce Draws International Attention With a Russian Mistress and Coronavirus Part of the Tangled Web.

II) Recovering Assets Concealed At Trusts

Whether a spouse has a right to recover assets at a trust ordinarily depends on the law where the assets are located. In some cases, a spouse might be able to recover assets at a trust by proving in court:

  1. assets were fraudulently transferred from the marital estate;
  2. the trust is void because it was self-settled (i.e. the grantor and beneficiary are the same);
  3. and the “trust veil” should be pierced because marital property was fraudulently transferred to the trust or the trust wrongfully concealed assets. See e.g. Babitt v. Vebeliunas (In re Vebeliunas), 332 F.3d 85, 91 (2d Cir. 2003) (discussing New York cases where right to pierce trust veil was preserved).

Video: Courtesy of Dolcefino Consulitng

Copyright 2020 Fred L. Abrams

Determined criminals hiding assets typically wash assets by using money laundering methods. Laundering methods include: commingling funds; opening secret offshore bank accounts; hoarding & smuggling cash; titling assets in the name of nominees; etc. The Asia/Pacific Group On Money Laundering lists these and other key money laundering methods at its typologies webpage.

The U.S. Government’s tax evasion prosecution of Israel’s Bank Hapoalim discussed some common methods for hiding assets. Federal prosecutors alleged Bank Hapoalim conspired with U.S. taxpayers to hide over $7.6 billion from the IRS in more than 5,500 secret Swiss bank accounts. Pages 2 & 5 at Bank Hapoalim’s Statement of Facts, suggest Bank Hapoalim hid assets through money laundering. Bank Hapoalim’s apparent laundering methods consisted of:

  1. back-to-back loans;
  2. offshore bank accounts;
  3. numbered Swiss bank accounts;
  4. nominee bank accounts, which are bank accounts maintained in the name of an intermediary;
  5. sending bank customers to a Panamanian law firm which formed offshore shell companies;
  6. & a hold mail service which kept monthly bank account statements and other correspondence, offshore.

As was widely reported on or about this past May 1, Bank Hapoalim entered a deferred prosecution agreement to settle the tax evasion case. It agreed to pay nearly $874 million for fines, tax evasion and in forfeited assets the Washington Post says. The $874 million penalty was the U.S. Department of Justice’s second-largest asset recovery from an offshore bank for tax evasion.

Image: Zwiebackesser/Shutterstock.com

Copyright Fred L. Abrams 2020

The criminal case against Ghislaine Maxwell for allegedly grooming Jeffrey Epstein’s victims, might show how to hide real estate & other assets by employing: a shell company, lawyers, cash; & numerous bank accounts. Prosecutors’ 7/2/20 “Memorandum In Support Of Detention” says Ms. Maxwell’s apparent New Hampshire hideout was purchased in December 2019 “through a carefully anonymized LLC.”  The LLC seemed to have paid $1.07 million in cash for this New Hampshire property with a luxury home. A U.S. Sun article identifies the LLC as Granite Reality LLC.

However, Granite Reality LLC is a suspected shell company. It was formed on n 11/18/19, the New Hampshire Secretary of State’s website says. Granite Reality LLC’s principal office address is listed as “c/o Nutter McClennen & Fish LLP, 155 Seaport Blvd, Boston, MA, 02210, USA.” That name & address belong to the Massachusetts Nutter law firm. The Secretary of State’s web page also reveals that Jeffrey W. Roberts is a manager of Granite Reality LLC. Mr. Roberts is a lawyer at the Nutter law firm who chairs the Private Client Department and does estate planning for high net worth individuals.

Meanwhile, Ghislaine Maxwell is thought to have actually paid the $1.07 million cash for the New Hampshire property in 2019. This is mentioned at the New York Post article “Ghislaine Maxwell arrest: Armed agents, spy planes used to take down Epstein gal pal.”  Stated differently, Ms. Maxwell is the alleged true beneficial owner of the New Hampshire property.  Additionally, Prosecutors’ “Memorandum In Support of Detention” alleges Ms. Maxwell maintained or was associated with 15 bank accounts since 2016. The total balance of the accounts ranged from hundreds of thousands of dollars to more than $20 million.

Therefore, indicators that Ms. Maxwell might be hiding assets include Ms. Maxwell’s:

Video: Courtesy of 60 Minutes

Copyright 2020 Fred L. Abrams

One of the worst child support cases I know about is Janet O. v. James O., slip op. 51985 (Sup. Ct. N.Y. County, October 17, 2006). The ex-husband in Janet O had not made any child or spousal maintenance support payments for 30 years. By moving from New York and living offshore in Barbados, the Dominican Republic and Mexico, the ex-husband evaded enforcement proceedings on behalf of his ex-wife & their 3 sons. Consequently, the ex-wife and their 3 sons were relegated to poverty and public assistance.

Meanwhile, the ex-husband remarried and adopted his new wife’s 2 daughters.  Ultimately, the New York court referred the Janet O matter to federal prosecutors. When a parent moves offshore to evade child support, federal prosecutors may bring a criminal case pursuant to the Child Support Recovery Act at 18 U.S.C.§ 228 et. seq. A parent criminally charged with violating 18 U.S.C.§ 228 hopefully has an additional incentive to pay child support.

Elements of A Case Under 18 U.S.C. § 228 (a)(2)

18 U.S.C. § 228 (a)(2) covers a parent who crosses state lines or leaves the country in order to evade child support. A violation of 18 U.S.C. § 228 (a)(2) is punishable by up to two years imprisonment and by a fine up to $250,000. To show a defendant violated 18 U.S.C. § 228 (a)(2), a federal prosecutor would prove these elements at trial:

  • the defendant traveled in interstate or foreign commerce with the intent of evading child support obligations;
  • the defendant had a past due child support obligation exceeding $5000;
  • and the obligation is unpaid for more than a year.

Additionally, a prosecutor may use Federal Rule of Evidence 404 (b) to supply evidence at trial about the defendant’s: motive; opportunity; intent; plan; etc. For example, pursuant to Rule 404 (b) a prosecutor might show the jury the defendant’s tax returns to prove the defendant could have paid the child support obligation.

U.S.A. v. Juelle-Albello

Like the ex-husband in Janet O, Mr Juelle-Albello was accused of moving offshore to evade child support. In U.S.A. v. Juelle-Albello, federal prosecutors indicted Mr. Juelle-Albello for his suspected violation of 18 U.S.C. § 228 (a)(2).  Mr. Juelle-Albello married Diana Umpierre in Puerto Rico on 11/8/1991. On 6/26/2007 Mr. Juelle-Albello and Ms. Diana Umpierre were divorced.  Among other things, Mr. Juelle-Albello was suppose to pay $13,893.81 a month for child support through the Puerto Rico Child Support Administration (“ASUME”). As of June 2018 Mr. Juelle-Albello’s outstanding debt to ASUME reportedly was $1,868,012.50.

According to federal prosecutors, Mr. Juelle-Albello made no payments to ASUME from July 2013 to June 2018. Instead of making the payments, Mr. Juelle-Albello moved to Florida in 2011 where he lived with his new wife and new daughter. Then during 2014, Mr. Juelle-Albello left the U.S. for Mexico. However, in July 2018 Mexican authorities placed Mr. Juelle-Albello in U.S. custody by deporting him pursuant to an arrest warrant in U.S.A v. Juelle-Albello. The list of evidence prosecutors intended to use at Mr. Juelle-Albello’s trial included: Mr. Juelle-Albello’s record of payments to ASUME; court orders from the Court in Bayamon, Puerto Rico; Snapchat photos; etc. On 8/12/2019 Mr. Juelle-Albello pleaded guilty to violating 18 U.S.C. § 228 (a)(2). Mr. Juelle-Albello’s sentencing is now set down for 7/21/2020.

Copyright 2020 Fred L. Abrams