Twelve new peer review reports and laundering assets by purchasing real estate:

  • On September 12th, the Organisation for Economic Co-operation and Development announced its 12 new peer review reports regarding assets hidden in international tax evasions.  A press release discussing the reviews, mentions trusts and bearer shares:”In all 12 new reviews, the most common deficiencies relate to: the lack of available [beneficial] ownership information as regards trusts and bearer shares; incomplete accounting information for some forms of trusts and partnerships, including foreign or international entities; and some limitations in the international agreements allowing for exchange of information.“

Case 08012, Courtesy of The Egmont Group

Copyright 2011 Fred L. Abrams

Although real estate developer Michael R. Mastro tried to protect assets by forming three trusts, the Court in Mr. Mastro’s bankruptcy case still found these trusts to be void.  According to the Court’s May 28, 2010 order, the trusts were void as to Mr. Mastro’s creditors because the trusts were “self-settled” (i.e. created and funded by Mr. Mastro for his own benefit).  The Court therefore treated Mr. Mastro’s trust assets as bankruptcy estate property which could be liquidated for the benefit of Mr. Mastro’s unsecured creditors.

A June 6th report filed by Mastro trustee James F. Rigby, Jr. reveals that these creditors may get a penny on the dollar this year.  Page 7 of the report additionally says that the creditors’ overall recovery from the Mastro bankruptcy estate might be just a 2% payout more or less.  Equally disturbing is that Mr. Mastro and his wife Linda also disappeared in June.  This caused the Court to issue bench warrants for the Mastros, who are believed to have recently stayed in Canada as fugitives.

Valuable jewelry which could be bankruptcy estate property, has too gone missing along with the Mastros.  Missing for example, are one platinum ring with a 27.80 carat pear shape diamond and one 14 karat white gold ring with a 15.93 carat round diamond.  On June 22, 2005, West Coast Diamond & Gem reportedly appraised the white gold ring’s total retail replacement value at $835,000.00.  On June 21, 2007, West Coast may have similarly appraised the platinum ring’s total retail replacement value at $1,300,000.00:


(Click On The Image For Hi-Res)

Copyright 2011-2019 Fred L. Abrams

“Bodies hanging from bridge in Mexico are warning to social media users” highlights the heinous murders of two bloggers in Neuvo Laredo, Mexico.  As “Mexico murders show how Internet empowers, threatens” too explains, the bloggers are believed to have been killed for reporting on Mexican drug cartels.

The August 2011 National Drug Threat Assessment also reports about the Mexican drug cartels.  Pages 40-41 of the assessment describe how the Mexican cartels hide / launder illicit profits through bulk-cash smuggling, foreign bank accounts and the Black Market Peso Exchange informal banking system.

Another feature of the assessment is a table referring to these cartels as transnational crime organizations (“TCOs”).  This table documents the activities of the cartels in nine U.S. regions:

Table: U.S. Department of Justice

Copyright 2011 Fred L. Abrams

A class action complaint filed in Illinois alleges that five foreign banks are liable for the Holocaust-era looting of financial accounts belonging to Hungarian Jews.  The heirs of some of the Hungarian Jews filed this complaint in the case known as Holocaust Victims of Bank Theft v. Magyar Nemzeti Bank, et. al., Index No. 10-CV-01884.

On May 18th, the trial court issued its sixteen page decision refusing to dismiss the heirs’ complaint which seeks $2 billion in money damages.  This decision is already the subject of appeals and the trial court has scheduled a November 1, 2011 status hearing in the case.

Perhaps most important is that the complaint raises these compelling questions about the Holocaust-era in Hungary:

  1. Whether Defendants banks expropriated Jewish property in compliance with Hungarian government decrees;
  2. Whether Defendant banks participated in a scheme to expropriate the assets of the Jews of Hungary in violation of international law;
  3. Whether Defendant banks participated in or aided and abetted a scheme to depopulate and/or expel Hungary’s Jews in violation of international law;
  4. Whether Defendant banks participated in genocide in violation of international law;
  5. Whether Defendant banks aided and abetted genocide in violation of international law;
  6. Whether Defendant banks committed acts of looting in violation of international law;
  7. Whether Defendant banks continue to perpetuate genocide by their continued retention of the funds and assets by denying the Jewish community of Hungary the means to adequately and more fully reconstitute itself;
  8. Whether Defendant banks affirmatively misrepresented to the Plaintiffs, other Class members and the general public their actions during the WWII period and their continued retention of the assets of Plaintiffs and other Class members;
  9. Whether Defendant banks failed to provide an accounting and restitution to the Plaintiff and other Class members since World War II; and
  10. Whether Plaintiff and Class have been damaged by Defendant banks’ conduct. (Complaint at pp. 39-40).

(Edited September 17, 2011)

Copyright 2011 Fred L. Abrams

Freezing bank accounts maintained by nominees and Scottish prosecutors investigate a suspected tax fraud.

  1. Fraudulently conveyed assets may be recovered even if they are concealed in bank accounts maintained by straw persons / intermediaries (i.e. nominees).  A post-judgment creditor for example, can conceivably freeze or restrain nominee bank accounts in New York, as partly suggested by ERA Mgt. v. Morrison Cohen Singer & Weinstein, 605 N.Y.S.2d 91 (1st Dept 1993) and Bingham v. Zolt, 647 N.Y.S.2d 220 (1st Dept 1996).
  2. In their investigation of money laundering connected to a suspected Value Added Tax carousel fraud, Scottish prosecutors are scrutinizing alleged Delaware company “Trust Union LLC”.  The prosecutors’ letter rogatory filed in federal court on August 29th, asserts the suspected criminal scheme involved cross-border elements.  These elements could have included two accounts at Alpha Bank of Greece and the likely purchase of the house at 34 Kenilworth Road, located along this picturesque route in Stirling, Scotland:

    Image: Google Maps

    Copyright 2011 Fred L. Abrams

“Using Divorce To Dissipate Assets & Delay Creditors” described allegations from 2008, that ex-Tyco chief executive Dennis Kozlowski might have fraudulently conveyed assets via an excessive divorce settlement.  Stated differently, the ex-Tyco chief was thought to have possibly used his divorce settlement as an asset protection tool.

An August 10th civil complaint filed in federal court by the United States Attorney, similarly accuses former Kansas University official Ben Kirtland of fraudulently conveying assets to his wife at the time of their divorce.  The complaint essentially claims that in anticipation of a $2 million dollar forfeiture judgment against him, Mr. Kirtland supposedly used this divorce settlement to wrongfully transfer assets:

(To Enlarge, Click On The Divorce Settlement)

Copyright 2011 Fred L. Abrams

Today’s “Asset Search News Roundup” deals with the beneficial ownership of assets.

(Click On The Image To Read The Bill)

Copyright 2011 Fred L. Abrams

It is well known that corrupt politically exposed persons can conceal their illicit assets in money laundering circuits.  My recent comments regarding politically exposed persons are included at MoneyLaundering.com’s August 9th article:

International Groups Say Corrupt PEPs Can Often Loot With Impunity*

August 9, 2011
By Colby Adams and Brian Monroe

Three intergovernmental groups are questioning the effectiveness of anti-money laundering controls meant to curb abuses of corrupt political figures who steal from their countries.

The World Bank and United Nations said in a joint June 21 report that at least 74 of 124 jurisdictions examined have not complied with anti-money laundering (AML) recommendations to quash kleptocracy by political figures. The record indicates that financial institutions and the agencies that regulate them may be “deficient” in enforcing the controls, the report said.

In a separate report published July 29, the Paris-based Financial Action Task Force (FATF) warned banks and other companies that government officials, also known as politically exposed persons (PEPs), can exploit the “natural advantages” of their positions to launder ill-gotten funds through institutions, and then stymie investigations into the crimes.

The three organizations recommended requiring financial institutions to review their PEP accounts annually, sharing suspicious activity reports on the accounts of foreign politically-tied figures with their home country and eliminating the distinction between foreign and domestic PEPs.

“More specific guidance may be needed because there are specific challenges related to the persistent problem of PEPs that we don’t see with drug trafficking and organized crime,” said Vincent Schmoll, principal administrator with the FATF secretariat, in an interview. FATF plans to publish guidance in the next six months on how to identify such funds, he said.

Looting by the former Nigerian dictator Sani Abacha, who siphoned assets out of his country into banks in Switzerland, the United States and the United Kingdom, illustrates how difficult it can be to stop powerful figures from abusing their positions, said Schmoll.

“Even if all the receiving countries of Abacha’s funds had all their PEP laws up to par, and were able to identify the beneficial owners, his control of the country meant that there was no way for Swiss, U.K. and U.S. banks to return the money to his victims,” said Schmoll.

In cases when corrupt foreign officials exercise direct power over a bank, “the hardest part of money laundering, introducing the funds into the financial system, is already done,” said Fred Abrams, a New York-based attorney specializing in asset recovery. Pavlo Lazarenko of Ukraine and Zine El Abidene Ben Ali of Tunisia both used such means to launder funds they stole from state coffers, he said.

Continue Reading MoneyLaundering.com Article About Looting With Impunity

Posts concerning asset searches and the recovery of more than 1000 antique coins, an Egyptian sarcophagus and other cultural artifacts.

  • A July 14th press release describes a suspected smuggling scheme from which more than 1000 antique coins, an Egyptian sarcophagus and other cultural artifacts were recovered.  An indictment outlining a portion of the alleged scheme claims that smugglers involved in money laundering transported Egyptian cultural artifacts into the United States.  One of these supposed smuggled artifacts is depicted below.

Photo: U.S. Immigration and Customs Enforcement

Copyright 2011 Fred L. Abrams

An IRS webpage identifies U.S. residents accused of engaging UBS AG to maintain secretly opened Swiss or other foreign bank accounts:

(Click On The Image To View The Webpage)*

One person cited by this webpage is Ms. Lucille Abrahamsen Jackson, of Hillside New Jersey.  She reportedly concealed assets in a Swiss bank account by using a Panamanian company as her nominee, (i.e. intermediary).  To detect these kinds of Swiss bank accounts, claimants ranging from the IRS to divorcing spouses may pursue different legal remedies.

Continue Reading Searching For Bank Accounts Secretly Opened In Switzerland