The IRS is concentrating on tax fraud schemes in which assets are concealed by cross-border elements.  A recent Reuters’ article and a Department of Justice press release discussed such tax frauds, which the IRS refers to as abusive offshore tax avoidance schemes.  To try to detect these schemes, the IRS has used methods ranging from an Offshore Voluntary Compliance Initiative to its criminal prosecution of suspected tax cheats.

The IRS had also served a “John Doe” summons on UBS AG to uncover bank customers who were U.S. taxpayers with secret foreign financial accounts.  Under the settlement of that particular UBS case, the IRS withdrew its summons and UBS identified U.S. bank customers pursuant to the U.S.-Swiss tax treaties mentioned at my August 23rd “Asset Search News Roundup“.  As briefly described at a May 25th “News Roundup”, the IRS similarly issued a “John Doe” summons upon First Data Corporation:

(Click On The Above Image To Read The Entire Summons)

  Copyright 2010 Fred L. Abrams

The May 12th “Asset Search News Roundup” talks about both whistleblower awards and hiding assets in informal banking systems:

  1. Ten days ago I had the pleasure of meeting a noted colleague, attorney Jack Blum.  Among Mr. Blum’s high-profile clients are whistleblowers Rudolf Elmer and Heinrich Kieber, who are mentioned at at “Swiss Banker Blows Whistle On Tax Evasion”.  Mr. Blum especially emphasized in one of our conversations, that whistleblower awards can be a most effective countermeasure against tax fraud and other financial frauds.
  2. Informal banking systems, (a.k.a. alternative remittance systems), may be used by terrorists and anyone else hiding assets.  As shown below by the money laundering typology from the Egmont Group of Financial Intelligence Units, hawala is one of these informal banking systems.

Typology / Case# 06060: Courtesy of The Egmont Group

Edited August 18, 2012

Copyright 2010-2012 Fred L. Abrams

The website of Capital Asset, Inc. at www.bulletproofasset.com, 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.”

Capital Asset, Inc. presumably recommends forming companies in Nevada, Wyoming or Delaware because in these states there are little or no reporting requirements about a company’s shareholders, managers, etc.  As many prosecutors and financial investigators already know, the kind of corporate formation services offered by Capital Asset, Inc. can easily be used by criminals determined to hide their illicit assets.

This lack of transparency in Nevada, Wyoming and Delaware can be an enormous money laundering risk, as these states may be a haven for those who would form a shell company and then use the same to open a nominee bank account.  Once such a nominee bank account is opened, beneficially owned funds can be maintained in it with complete anonymity.  Wyomingcorporations.us is one of the countless corporate formation businesses that seem to be trying to cash in on this lack of corporate transparency.

It advises that a Wyoming company’s “Members are not reported!” and also offers the Wyoming “virtual office”, where for $400 dollars one can easily establish a supposed Wyoming office address, with a virtual office phone and fax number.  Perhaps even worse is the comment at the Wyomingcorporatons.us Web site that: “Now accounts for Wyoming corporations can be formed anywhere, and the brick-and-mortar type bank isn’t a necessity. Internet banks are a fine solution.”

(Last Reviewed 9/26/17)

Copyright 2010-2017 Fred L. Abrams

Concealing assets through yachts / aircraft and the 2010 Bank Secrecy Act / Anti-Money Laundering Examination Manual are on the radar in this “Asset Search News Roundup”:

  • Beneficial owners sometimes fraudulently conceal their assets by secretly purchasing a valuable yacht or aircraft.  They may then establish a Delaware or other shell company and use a nominee director to register the yacht or aircraft with anonymity.  Asset Managing Group, Inc. offers a yacht / aircraft registration service via Delaware corporations with nominee directors.
  • The Federal Financial Institutions Examination Council has released the 2010 edition of the Bank Secrecy Act / Anti-Money Laundering Examination Manual.  Its indicia or “red flags” of money laundering are listed at Appendix F:

Click On The Manual To Read It

Copyright 2010 Fred L. Abrams

My article "Wachovia Bank & Its Bank Secrecy Act Issues" said that Ponzi scheme victims do not possess a cognizable claim against financial institutions under the Bank Secrecy Act.  Concurring and quoting me was Moneylaundering.com’s "Florida Court Unlikely to Find Wachovia, Mastercard Civilly Liable for Missing Ponzi Scheme":

 

 (Click On The Image Above To Continue Reading)

*"Florida Court Unlikely to Find Wachovia, Mastercard Civilly Liable for Missing Ponzi Scheme", Copyright 2010 Alert Global Media, reprinted with permission.

Holocaust-era assets and securities fraudster Trevor Cook are the focus of this week’s "Asset Search News Roundup":

  1. An April 21, 2010 Bloomberg.com article explained that Berlin’s Free University went live with its website about Holocaust-era assets / "degenerate" art confiscated by the Nazis.  "During A War Everybody Loots A Little Bit", earlier mentioned that as much as 20 percent of Europe’s art is thought to have been looted by the Nazis.
  2. At "Hopes of cash stash dashed in Minneapolis money manager Trevor Cook case", the Minneapolis Star Tribune reported about a failed meeting between securities fraudster Trevor Cook and Cook Receiver R.J. Zayed.As explained by "Interdicting A Ponzi Schemer’s Assets", Receiver Zayed is trying to recover Cook Receivership assets.  The Receiver’s comments about his meeting with Mr. Cook, can be read below.

Copyright 2010 Fred L. Abrams

U.S. Sen. Frank Lautenberg’s family foundation is one of three plaintiffs in The Lautenberg Foundation v. Madoff, 09-Civ-00816.  The Lautenberg Plaintiffs had reportedly invested approximately $8.9 million in Bernard Madoff’s Ponzi scheme.  They seek to recover losses through their February 24, 2009 complaint against Bernard Madoff’s younger brother, Peter.  Although part of the complaint was dismissed by the Court’s September 9, 2009 Order and Opinion, four causes of action remain against Peter Madoff.   

These remaining causes of action are for Peter Madoff’s alleged: breach of a fiduciary duty; aiding and abetting a breach of fiduciary duty; negligence; and a supposed violation of Section 20(a) of the Securities Exchange Act of 1934.  Via their March 12, 2010 notice of motion, memorandum of law, statement of facts, etc., the Plaintiff’s moved under Fed. R. Civ. P. 56 for summary judgment on their Securities Exchange Act cause of action.  In the above-mentioned statement of facts, Plaintiffs asserted they sustained nearly $6.5 million in actual losses.

According to the Plaintiffs, a "Uniform Application For Investment Adviser Registration" filed with the SEC shows that both Peter and Bernard Madoff had been "control persons" at Bernard L. Madoff Investment Securities LLC ("BMIS").  As the highlighted excerpt from page twenty of this registration form could indicate, Peter Madoff might have been such a "control person" since 1969:

(Click On The Image To Read The Entire Registration Form)

Continue Reading Suing Peter Madoff For Bernard Madoff’s Securities Fraud

This "Asset Search News Roundup" concentrates on an alleged $45 million dollar tax fraud and the conviction of Mr. Dennis Hecker’s girlfriend, Christi Michele Rowan:

 Copyright 2010 Fred L. Abrams

My most recent “Asset Search News Roundup” reported about the April 13, 2010 plea agreement executed by securities fraudster and Ponzi schemer Trevor Cook.  In this plea deal, Mr. Cook pleaded guilty to tax and mail fraud charges, agreed to make restitution and is supposed to fully disclose his assets to prosecutors.

Mr. Cook must also cooperate with Receiver R.J. Zayed, who seeks to recover Receivership assets for the benefit of Mr. Cook’s Ponzi scheme victims.  Before the plea agreement happened, the Receiver made his March 29th statement.  It expressed “shared concern & frustration” over the asset recovery effort launched against Mr. Cook.  In this statement, the Receiver acknowledged that his efforts targeting Mr. Cook, have been criticized:

 (Click On The Following Image To Read The Complete Statement)

Continue Reading Interdicting A Ponzi Schemer’s Assets

The guilty plea of Minneapolis money manager Trevor Cook and the Court’s dismissal of a Wisconsin lawsuit against Associated Bank, are mentioned by today’s "Asset Search News Roundup":

* At a plea hearing that took 33 minutes yesterday, Trevor Cook pleaded guilty to counts one and two of his of his criminal information.  At that time, Mr. Cook was convicted of violating 18 U.S.C. §1341 (mail fraud) and 26 U.S.C. §7201 (tax fraud.).  A press release described Mr. Cook’s plea agreement and the securities fraud / Ponzi scheme he had caused.

* "Associated Bank Sued For Supposedly Ignoring Red Flags" examined a Wisconsin lawsuit claiming anti-money laundering regulations had been violated.  That same lawsuit was dismissed one week ago, as reported by "Judge dismisses lawsuit against Associated Bank".  My April 10, 2010 post was about a similar lawsuit brought against Wachovia.   

 Copyright 2010 Fred L. Abrams