“Human Intelligence & The SEC’s Whistleblower Program” examines the government’s handling of tips in its search for assets concealed by securities fraudsters.  The IRS Whistleblower Program similarly seeks tips from informants who help the IRS detect assets concealed in tax frauds.

Besides these whistleblower programs, tips can often be generated in a variety of ways.  “Warsaw Prosecutors Eye Possible Money Laundering At 50 Platowcowa Street” highlights a tip supplied through an anonymous letter.  This tip letter caused Polish prosecutors to launch a money laundering investigation and search for funds connected to a suspected shell company in Delaware.

“An Asset Search, Tax Fraud & Divorce” meanwhile, describes how a prospective tipster was interviewed by Brian, an ex-IRS special agent and former high-ranking official at FinCEN.  Brian conducted this interview to locate marital assets believed to have been hidden by a divorcing husband suspected of tax fraud.

Continue Reading An Asset Search Via Whistleblowers & Other Tipsters

More than 20% of Europe’s art could have been looted by the Nazis during the Holocaust and in countless cases, the looted art was ultimately transferred to museums and private collections.  When analyzing these transfers, one may detect the use of multiple jurisdictions, forgeries or other common concealment methods.  Given the foregoing, this “Asset Search News Roundup” scrutinizes the transfer of art at the time of the Holocaust-era:

Copyright 2011 Fred L. Abrams

The pretrial discovery phase of a divorce, bankruptcy or other legal matter is often the best chance one has to collect evidence of any assets hidden offshore.   The attached letter rogatory* submitted to the Swiss court, was included in one divorcing wife’s pretrial effort to gather such evidence.

At the time of pretrial discovery in her New York divorce, this wife used the letter rogatory to try to compel a Swiss bank to disclose info about her husband’s secret financial account.  In the Chapter 7 bankruptcy of Michael Mastro, discovery devices were likewise employed to collect evidence or leads about assets thought to be offshore.  One of these devices is the subpoena duces tecum reproduced below.

This subpoena reveals that the trustee for the Mastro bankruptcy estate sought among other things, copies of Mr. Mastro’s passport, airline tickets and hotel receipts.  As “Secreting Assets Without A Border Trace” indicated, investigators may search for offshore assets by “concentrat[ing] on foreign hotels, payment information, telephone records and on credit card expenses for details of physical movements and lifestyle.”

 (Click On The Subpoena To Read It)

*Letter Rogatory Has Been Sanitized / Changed For Privacy Reasons.

Copyright 2011 Fred L. Abrams

Individuals ranging from Nazi war criminals to tax fraudsters have long been known to secretly transfer assets by smuggling cash.  Today’s “Asset Search News Roundup” focuses on this smuggling.

Copyright 2011 Fred L. Abrams

Investigating assets by issuing a letter rogatory—

  • A prosecutor investigating an alleged tax fraud originating in Italy, has issued a letter rogatory regarding Chiron Holding LLC of Delaware.  The letter rogatory demonstrates that the prosecutor and Italian Finance Police are analyzing if Chiron participated in a suspected scheme to illegally avoid €416,895,973 in capital gains taxes.  To read a translated copy of the letter rogatory, click on this image:

Copyright 2011 Fred L. Abrams

A Primer For Gathering Financial Intelligence pronounces “Human intelligence can be the only practical way to uncover some sophisticated asset concealment schemes.”   The SEC Whistleblower Program sniffs out human intelligence by offering rewards for tips regarding securities fraudsters.  A November 2011 report shows the Whistleblower Program generated 334 tips during the seven week period from August 12, 2011 to September 30, 2011.

Jordan A. Thomas, (once an assistant director and senior attorney at the SEC), had a leadership role in developing this program.  Mr. Thomas drafted the proposed whistleblower legislation and briefed House and Senate staffs on it.  He is a partner at Labaton Sucharow LLP and chairs its Whistleblower Representation Practice.

His guest post featured below, notes that financial incentives and retaliation protections will cause the whistleblowers to come forward.  It also recognizes “the locating of hidden assets will play a major role in these whistleblower actions.”


The SEC Whistleblower Program: A Revolution in Law Enforcement?

Jordan A. Thomas

While the Securities and Exchange Commission (SEC) has just released its 2011 annual report touting a record number of enforcement actions, the $2.8 billion in monetary sanctions recovered seems a drop in the bucket against what the serial schemers have stolen.  But the game is changing, and the recovery of concealed assets will play a role in this revolution.

Under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC established a new and, in many ways, revolutionary whistleblower program, which was finalized and implemented in August.  With the specter of major financial awards and protection from workplace retaliation, individuals now have powerful incentives to speak out against misconduct and report possible violations of the US securities laws. The eligibility requirements are broad and relatively straightforward.

Continue Reading Human Intelligence & The SEC’s Whistleblower Program

This “Asset Search News Roundup” scrutinizes offshore tax havens:

  1. A November 3rd press release describes “The Stop Outsourcing and Create Americans Jobs Act of 2011”, (HR 3338), introduced by Rep. Jerry McNerney (CA-11).  The press release explains “the bill would increase penalties for corporations guilty of a variety of illegal transactions related to an offshore tax haven, such as fraud or false claims.”  The press release additionally declares that the bill targets “tax loopholes that encourage corporations to ship jobs abroad ….“
  2. The “Using A Trust to Protect Assets” webpage says one can shield assets with an integrated estate planning trust that has a foreign trustee.  The webpage argues “[s]ince the offshore trustee is not subject to U.S. court orders, the assets in the trust are protected from any attachments or seizures from U.S. judgments.”  It also proposes that the Cook Islands and Belize tax havens are best for establishing integrated estate planning trusts.

Copyright 2011 Fred L. Abrams

An October 25th press release describes a forfeiture effort pursued by the U.S. Government against Teodorin Nguema Obiang, Equatorial Guinea’s Minister of Forestry and Agriculture and the first son of Equatorial Guinea’s head of state.  For me, this press release raises another issue:  Could Equatorial Guinea nationals commence a lawsuit in the U.S. against Nguema and Equatorial Guinea?

Such a lawsuit might claim that Nguema collected vast sums of monies during an alleged public corruption scheme originating in Equatorial Guinea.  It could also allege that Nguema had possibly used the supposed corruption proceeds to help fund his lavish lifestyle which included the purchase of this palatial Malibu, California mansion at 3620 Sweetwater Mesa Road:

Among the many questions this prospective lawsuit raises, are: Would the claimants who are Equatorial Guinea nationals, possess a cognizable claim in a lawsuit filed in the U.S.?;  and Could Equatorial Guineas’ immunity from lawsuits, (as contemplated by the Foreign Sovereign Immunities Act), be avoided because of the “commercial activity” or “takings” exceptions at 28 U.S.C. §§ 1605(a) (2) or (a) (3)?

Continue Reading Suing Teodorin Nguema Obiang For His Malibu Mansion, Gulfstream Jet, Etc.

Interdicting assets parked in Switzerland and forgeries–

  1. “Mubarak sons own assets worth $340 mln in Switzerland: official” examines the seizure of Mubarak family assets at Swiss banks.  Legal remedies for seizing assets in Switzerland range from criminal law tools to civil attachment.  Articles featuring these remedies are: Recovering Assets In Switzerland Hidden By Dictators and / or An Asset Search In Geneva.
  2. “Using Forensic Science To Fight Financial Fraud” describes a scheme in which forged signatures were employed to illegally access funds in a securities account.  “Swiss prosecutors charge Italian man with money laundering, forgery over Parmalat collapse“, outlines a different kind of suspected forgery scheme.  This alleged scheme reportedly involved forged documents along with: money laundering, secret Swiss bank accounts, cash couriers and a Liechtenstein trust.

Copyright 2011 Fred L. Abrams

In one of the largest bankruptcies in Washington state history, Chapter 7 trustee James F. Rigby Jr. is searching for assets that belong to Michael R. Mastro’s bankruptcy estate.  The bankruptcy estate assets could include everything from life insurance polices to expensive jewelry and other portable valuable commodities.  During the March 24, 2010 deposition of Mr. Mastro’s wife Linda, trustee Rigby asserted that Mr. Masto concealed estate assets by utilizing bogus trusts and fraudulent transfers.

At a January 29, 2010 court proceeding, trustee Rigby had also proclaimed there were many “red flag transactions” in Mr. Mastro’s bankruptcy case.  The Belizean “LCY Trust”, (with its Belizean “Compass Trust Corporation” trustee), was especially replete with red flags.  Trustee Rigy alleged that via LCY Trust and its related companies, Mr. Mastro possessed a $400,000 dollar Rolls Royce, $2 million in jewelry and an $18 million dollar mansion.  Mr. Mastro had established LCY Trust in 2008 with the help of the now inactive Seattle-based Vigal & Simon, Inc.

By way of Vigal & Simon, Inc., attorney Mary Simon seemed to supply asset protection services to Mr. Mastro.  Furthermore, Ms. Simon might have provided legal advice about LCY Trust and / or Compass Trust Corporation even after three creditors forced Mr. Mastro into bankruptcy on July 10, 2009.  A  December 5, 2009 e- mail supposedly sent by Ms. Simon, states: “Compass Trust– could resign as trustee and another trust company could be named.  That would throw a monkey wrench at them!”:

(To Enlarge, Click On The Image)

Copyright 2011 Fred L. Abrams