American and Swiss officials are ramping up their efforts to recover assets hidden by corrupt foreign politically exposed persons commonly referred to as kleptocrats. A few of my thoughts about this are included at MoneyLaundering.com’s August 6th article “U.S., Swiss Initiatives to Recover Looted Assets Likely to Bring Banks More Subpoenas, Regulatory Scrutiny “:

(Click On The Image To Read The Entire August 6th Article)

“U.S., Swiss Initiatives to Recover Looted Assets Likely to Bring Banks More Subpoenas, Regulatory Scrutiny”, Copyright 2010 Alert Global Media, reprinted with permission.

Copyright 2010 Fred L. Abrams

425 pounds of hidden marijuana; Transparency International; and the defenses to a clawback lawsuit; are discussed at the August 5th "Asset Search News Roundup":

  • Federal agents at a U.S.-Mexican land crossing interdicted more than 425 pounds of marijuana on July 24, 2010. As "Marijuana Encased in Cement Seized by CBP" explains, the marijuana had been concealed in the shipment of concrete lawn furniture partly shown below.

(Photo: U.S. Customs and Border Protection)

Copyright 2010 Fred L. Abrams

“$20 million airline-ticket fraud aided by hotel workers, prosecutors say” mentioned that suspected identity thieves and their supposed co-conspirators were indicted for allegedly using stolen credit card information to purchase airline tickets. These tickets are believed to have been sold on the U.S. black market at steep discounts to airline passengers.

A July 9th press release describing the indictments quoted a U.S. prosecutor as saying: ‘What began as a local law enforcement investigation ultimately exposed an extensive nationwide black market for airline tickets.‘ The U.S. black market is of course not the only way airline passengers might acquire tickets connected to alleged credit card frauds.

Jamaican authorities for example, are investigating Montego Bay, Jamaica resident Andrew Hemmings, about his possible acquisition of Spirit Airlines’ tickets during a suspected credit card fraud. To obtain evidence about this alleged fraud originating in Jamaica, Jamaican authorities issued the following legal assistance request / letter rogatory:

(Click On The Legal Assistance Request To Read It)

Copyright 2010 Fred L. Abrams

This "Asset Search News Roundup" features France’s richest woman; a retired Orlando police officer; and actor Wesley Snipes:

  1. "Police question French heiress over scandal" reports that France’s richest woman,L’Oreal heiress Liliane Bettencourt, is suspected of hiding assets from French tax authorities. Among other things, French authorities are believed to be investigating whether the heiress could have concealed as much as $100 million by laundering through two Swiss bank accounts.

  2. Retired Orlando, Florida police officer Amy Bretches was convicted on July 21st of money laundering. Her indictment alleged that she unlawfully acquired FEMA monies, hiding them via financial accounts / a certificate of deposit. The jury’s July 21st verdict sheet filed in Ms. Bretches’ case, shows she was acquitted of one money laundering charge and found guilty of two.

  3. Hollywood actor Wesley Snipes lost his appeal this month when his tax fraud conviction was upheld. Mr. Snipes had been convicted in 2008 of violating26 U.S.C. § 7203 by failing to file tax returns for the years 1999, 2000 and 2001. He faces thirty-six months in prison, as discussed by a decision from the Eleventh Circuit Court of Appeals.

    4. (Click On The Image To Read The Court of Appeals Decision)

Copyright 2010 Fred L. Abrams

My July 11th "Asset Search News Roundup" mentioned that U.S. prosecutors were investigating HSBC since some U.S. taxpayers were suspected of using foreign HSBC bank accounts to facilitate tax frauds.  Swiss prosecutors meanwhile, are separately investigating whether former HSBC employees Hervé Falciani and Georgina Mikhael had illegally accessed bank customer information at HSBC in Geneva.   

According to a July 9th Bloomberg.com article, the two former HSBC employees may have violated Swiss bank secrecy laws by allegedly trying to sell confidential HSBC bank customer information.  This information reportedly included the names of thousands of HSBC customers who might have used foreign HSBC bank accounts to hide assets from domestic tax authorities across the globe. 

Furthermore, approximately 1500 of these HSBC customers may have hidden assets from the IRS in their foreign HSBC accounts.  What might the IRS do to elicit financial evidence from HSBC, regarding these 1500 suspected tax cheats?  As explained at "Concentrating On Assets Concealed By Cross-Border Elements", one way the IRS can try to gather foreign evidence is by serving a "John Doe" summons. 

If the IRS does serve HSBC with a "John Doe" summons, the IRS would conceivably gather financial evidence about the 1500 and other suspected tax cheats.  The IRS has relied heavily on "John Doe" summonses as a countermeasure against tax frauds with cross-border elements.  As of December 2008, the IRS had issued more than 150 "John Doe" summonses in connection with its Offshore Credit Card Program.

Copyright 2010 Fred L. Abrams

Alleged medicare fraud, joint tax audits and recovered art are discussed by this "Asset Search News Roundup":

  1. Federal prosecutors announced Friday that ninety-four people were charged with participating in an alleged attempt to defraud the Medicare program out of $251 million. A Department of Justice press release explained that arrests related to the case were made in Miami, New York, Detroit and Baton Rouge.

  2. IRS Commissioner Douglas Shulman’s June 8th speech before the OECD, described the anticipated use of joint audits of businesses engaged in cross-border activities. Joint audits could be conducted by tax authorities from different countries, sharing information in their fight against international tax fraud.

  3. Eleven paintings that had gone missing after WWII from the Pirmasens municipal museum’s collection were just recovered and returned to Germany. Among the returned paintings were three by German genre painter Heinrich Buerkel. As set forth by a press release, the grand-niece of deceased U.S. serviceman Harry Gursky had alerted U.S. officials about the paintings and surrendered them. The late Mr. Gursky might have stolen the paintings after the allied invasion of Germany in 1945. He may have brought the paintings into the U.S. and is believed to have hidden them in his basement.

    (One Of Heinrich Buerkel’s Paintings Returned To Germany)

    Photo Courtesy of ICE

    Copyright 2010 Fred L. Abrams

"Forced Collections Against A Fraudster Like Madoff" & "Competing Over Mr. Allen Stanford’s Assets" described the problem of competing claimants trying to recover from a limited pool of funds.  This same problem has been encountered by the plaintiffs in The Lautenberg Foundation v. Madoff, 09-Civ-00816, whose lawsuit I mentioned at "Suing Peter Madoff For Bernard Madoff’s Securities Fraud".

The Lautenberg plaintiffs are damaged investors of Bernard Madoff’s Ponzi scheme and their lawsuit alleges they were injured by Bernard’s younger brother Peter.  As mentioned by their lawsuit, Peter Madoff is allegedly liable for his supposed tortious conduct while working as a "control person" at Bernard L. Madoff Investment Securities LLC  ("BLMIS").

While the Lautenberg plaintiffs argue that Peter Madoff is liable to them, a complaint filed in an adversary proceeding claims that the Lautenberg lawsuit tries to wrongly recover BLMIS assets from Peter Madoff.  This May 27, 2010 adversary complaint filed by Bernard Madoff Trustee Irving Picard, asserts that the Launtenberg plaintiffs were participants in Trustee Picard’s claims process for damaged investors.

Continue Reading Peter Madoff & His Competing Claimants

Today’s "Asset Search News Roundup" examines the criminal investigation into HSBC and the SEC’s case against Kenneth Wayne McLeod’s estate:

  • "U.S. Widens Tax Inquiry Into HSBC" reports that prosecutors are "ramping up their criminal investigation" of HSBC after U.S. taxpayers allegedly used foreign HSBC accounts to hide undeclared assets. My April 21, 2010 "Asset Search News Roundup" mentioned these same U.S. taxpayers, who were accused of using foreign HSBC accounts to conceal assets from the IRS.
  • "Hundreds of Federal Agents Fall Victim to Ponzi Scheme" essentially describes the June 24, 2010 securities fraud case brought by the SEC against the estate of recently deceased Kenneth Wayne McLeod. Mr. McLeod died from a self-inflicted gunshot wound on June 22nd in Jacksonville, Fla. He allegedly ran a 22-year Ponzi scheme at his retirement benefits consulting firm and is thought to have defrauded agents from the FBI, ICE and DEA and others, out of $34 million dollars. The securities fraud complaint filed by the SEC against Mr. McLeod’s estate is available here:

(Click On The Complaint To Read It)

Copyright 2010 Fred L. Abrams

The July 4th "Asset Search News Roundup" concentrates on Rudolf Leopold and cross-border activities:

  1. Austrian museum director and art collector Rudolf Leopold died on Tuesday, as pointed out by both the Associated Press and the New York Times. According to the Copyright Litigation Blog’s July 2nd article, Mr. Leopold’s death basically raises the issue of Austria’s willingness to return Nazi-looted art, the subject of Holocaust-era art restitution claims.

  2. "Tracking Trevor Cook’s Assets Across U.S.-Swiss Borders" highlights how one particular Ponzi schemer could have used cross-border elements to launder criminal proceeds. The "Egmont Group" case study which follows, similarly demonstrates the use of cross-border elements, (i.e. multiple jurisdictions), by human traffickers and / or terrorist financiers.

(Above Case No. 08006, Courtesy of The Egmont Group)

Copyright 2010 Fred L. Abrams

A frequently asked questions Web page published by the Financial Action Task Force discusses multilateral initiatives and states: “Large-scale money laundering schemes invariably contain cross-border elements.”  The Trevor Cook receiver undoubtedly recognizes the foregoing because he is tracking receivership estate assets across international borders, on behalf of investors damaged by Ponzi schemer and securities fraudster Trevor Cook.

Among other things, the Cook receiver is trying to interdict assets which may have been laundered through Mr. Cook’s purchase of real property in Canada and Panama and by Mr. Cook’s transfer of funds into Swiss bank accounts.  Swiss authorities have already frozen a one million dollar bank account at UBS AG connected to Mr. Cook, on the ground of suspected money laundering.

Swiss authorities probably froze this bank account by relying on anti-money laundering legislation including Art. 305bis of the Swiss Criminal Code.  Art. 305bis says in part:

“Whoever commits an act suited to frustrate the determination of the origin, the discovery or the confiscation of assets that he knows or should know derive from a crime, shall be punished with imprisonment or a fine“

Continue Reading Tracking Trevor Cook’s Assets Across U.S.-Swiss Borders