Wachovia, one of the world’s largest international banks, is still defending itself against the Florida civil complaint described at my post "Lawsuit Claims Wachovia Bank Facilitated Alleged Ponzi Scheme".  The complaint essentially claims that Wachovia’s anti-money laundering program under the Bank Secrecy Act had failed to detect money laundering.  It was brought by the apparent victims of a Ponzi-like securities fraud.

Although the complaint could conceivably be the subject of a trial, the Court might soon dismiss at least part of it.  This might happen since there is no private right of action under the Bank Secrecy Act for alleged anti-money laundering program violations.  Only governmental authorities can seek monetary damages for Bank Secrecy Act violations, as suggested by pages 77-78 of the August 26, 2009 opinion in Armstrong v. American Pallet Leasing, Inc.: 

 

(CLICK ON THE IMAGE ABOVE TO READ THE OPINION) 

Continue Reading Wachovia Bank & Its Bank Secrecy Act Issues

The April 8th "Asset Search News Roundup" comments on both a revised OECD-Council of Europe tax treaty and a contested provenance case brought to recover an ancient gold tablet:

  1. An April 6th press release announced that the OECD and Council of Europe are updating a treaty aimed at helping governments fight cross-border tax evasion. The press release states: "[t]his will enable developing countries to become parties to the amended convention and benefit from the new, more transparent tax-cooperation environment."
  2. Berlin’s Vorderasiatisches Museum lost the contested provenance case it brought to recover a small gold tablet which dates to the reign of the Assyrian King Tukulti-Ninurta I. The ancient tablet had allegedly gone missing from a national Berlin museum at the conclusion of World War II.

As more fully set forth in a March 30, 2010 Nassau County N.Y. Surrogate’s decision, the Vorderasiatisches Museum could not recover the tablet from the estate of Riven Flamenbaum because of the doctrine of laches. The late Mr. Flamenbaum had been a holocaust survivor and reportedly maintained the tablet in his Great Neck, New York safety deposit box.

Copyright 2010 Fred L. Abrams

My November 1, 2009 article highlighted the Chapter 7 bankruptcy case of real estate developer Michael R. Mastro. At “Trustee in Mastro bankruptcy goes after four new targets“, the Seattle Times too commented on Mr. Mastro and wrote about one of the latest lawsuits filed to recover Mr. Mastro’s bankruptcy estate assets.

The lawsuit was commenced by Mastro Trustee James F. Rigby, Jr. on March 9, 2010 and is actually an adversary proceeding within Mr. Mastro’s bankruptcy case. Trustee Rigby’s complaint in this adversary proceeding claimed that Mr. Mastro had made fraudulent and / or preferential asset transfers which the Court should set aside. E.g. 11 U.S.C. §§544, 547 & 548.

The complaint alleged that Mr. Mastro had conspired with others “to achieve the unlawful objective of hindering, delaying, or defrauding Mastro’s creditors“. It claimed that Mr. Mastro wrongfully transferred promissory notes of more than $50 million to his business partner John Mastandrea. The transfer of these promissory notes was memorialized by a June 24, 2009 agreement:

,

(Click On The June 24th Agreement For A Complete View)

The June 24th transfer also involved Mr. Mastro’s purported assignment of valuable accounts receivable to Mr. Mastandrea. These accounts receivable were listed in the June 24th agreement, at two exhibits labeled “B”:

Mr. Mastandrea however, recently stipulated that “[a]ny transfer or assignment from Mastro to Mastandrea pursuant to the June 24, 2009 agreement is avoidable and shall be avoided…”. March 24, 2010 Stipulation, at ¶2. As mentioned by the March 24th Stipulation and the “Agreed Judgment” related to it, assets transferred by the June 24th agreement are now re-vested in Mr. Mastro’s bankruptcy estate.

Copyright 2010 Fred L. Abrams

Prime Minister Silvio Berlusconi of Italy and the Egmont Group of Financial Intelligence Units are featured in the March 31st "Asset Search News Roundup":

(Click On The Above Typology To Enlarge It)

Money Laundering Typology Courtesy of The Egmont Group

Copyright 2010 Fred L. Abrams

Bank customers sometimes hide their assets offshore in nominee bank accounts located in high-risk geographical locations like Switzerland.  One such bank customer was ex-watch manufacturer Jack Barouh of Golden Beach, Florida.  As a February 4, 2010 press release basically explained, Mr. Barouh was accused of hiding undeclared revenue from the IRS during an abusive offshore tax avoidance scheme at UBS AG and other foreign banks.

Mr. Barouh’s scheme could have stared in 1976 when he first transferred skimmed monies from his U.S. watch businesses to foreign accounts at UBS of Switzerland.  He reportedly carried out his scheme with the help of two Swiss money managers and a Swiss attorney.  One of these Swiss money managers had even supposedly misappropriated some of Mr. Barouh’s undeclared revenue, although Mr. Barouh may have eventually recovered this revenue via a settlement.

The Swiss attorney and money managers are believed to have opened Mr. Barouh’s nominee bank accounts and / or had been directors of Mr. Barouh’s foreign companies.  These foreign companies were formed in Panama, the British Virgin Islands and Hong Kong and had reportedly been used to open Mr. Barouh’s nominee bank accounts in Switzerland or Hong Kong.  Despite all of the foregoing, the IRS was able to detect Mr. Barouh’s undeclared revenue in his nominee bank accounts.

Continue Reading An Ex-Watch Manufacturer & His Nominee Bank Accounts

Today’s "Asset Search News Roundup" reports on "Operation Illegal Motion" and describes the recovery of a 3,000-year-old sarcophagus:

  1. A press release mentions that Robert L. Stevens of Baton Rouge, Louisiana, was the 10th person criminally charged as a result of "Operation Illegal Motion".  Operation Illegal Motion is a public corruption probe of the criminal court system of East Baton Rouge Parish.  So far the probe has resulted in the convictions of two former police officers, the former chief investigator for a public defender’s office, former court employees and others.
  2. On March 10, 2010 U.S. authorities returned a 3,000-year-old sarcophagus to the Supreme Council of Antiquities of Egypt’s Ministry of Culture.  The 21st Dynasty sarcophagus was interdicted at Miami International Airport in 2008 and subsequently forfeited.  Its exporter in Spain could not provide proper provenance and the sarcophagus is presumed to have been stolen.

(Sarcophagus Returned On 3/10/10)

Photo: U.S. Immigration and Customs Enforcement

Copyright 2010 Fred L. Abrams

The March 14, 2010 “Asset Search News Roundup” first highlights ex-Detroit councilwoman Monica Conyers and then mentions Madoff Trustee Irving Picard:

*As The Wall Street Journal described at “House Judiciary Chairman’s Wife Sentenced to Prison“and “Lawmaker’s Wife Sentenced to Jail“, ex-councilwoman Monica Conyers was sentenced to 37 months of prison for her public corruption scheme. “Public Corruption Charges Against Two Politically Exposed Persons“, wasthelast time I discussedMs. Conyers.

*Yesterday’s post “Mr. Cook Continues His Incarceration For Civil Contempt”, recounted that Madoff Trustee Irving Picard had pursued forced collection proceedings in multiple jurisdictions.”U.S. judge backs Madoff trustee’s claims method“, recently reported on a separateissue involvingTrustee Picard– a controversy stemming from his valuation of investor’s claims. Trustee Picard’sefforts to recover assets through clawback claims in the Madoff case has also been debated by some.

Copyright 2010 Fred L. Abrams

After I wrote my November 28th, 2009 “Asset Search News Roundup” about Minneapolis money manager Trevor Cook, he was incarcerated on January 25, 2010 for civil contempt of court.  As the Court stated in its January 25, 2010 Opinion, the Securities and Exchange Commission and the Commodity Futures Trading Commission previously filed for injunctive relief against Mr. Cook.

They sought injunctive relief because Mr. Cook had allegedly participated in a Ponzi-like securities fraud which might have involved at least $190 million taken from 1000 or more victims.  Also according to the January 25th Opinion, Mr. Cook violated a November 23, 2009 asset freeze by dissipating assets.  The Court therefore remanded Mr. Cook to jail until “he purges himself of the contempt” by turning over:

  • $27,061,728.35 in foreign accounts;
  • $670,000 in cash;
  • $62,000 transferred to Mr. Cook’s brother;
  • $6,141,470 paid to preferred persons;
  • $2,005,857.88 in domestic accounts;
  • $53,000 from the sale of a Maserati & Hummer;
  • a computer and documents formerly possessed by Mr. Cook’s assistant;
  • a houseboat & a submarine;
  • his BMW, Lexus 430 & Lexus SUV;
  • his Bon Jovi tickets purchased in 2009;
  • and his collections of Faberge eggs and watches;

Continue Reading Mr. Cook Continues His Incarceration For Civil Contempt

This "Asset Search News Roundup" focuses on "politically exposed persons", some of whom would launder corruption monies.

  1. "Stolen Asset Recovery: Politically Exposed Persons, A Policy Paper On Strengthening Preventative Measures" was published in 2009 and it is available at the Stolen Asset Recovery Initiative’s website.  The 2009 policy paper stated at page 17: "[I]f, as the World bank suggests, $1 trillion of corruption money is moving around the world each year, where is it? ….the money must be moving undetected through the banks and intermediaries and the current systems are failing to detect it".
  2. The Senate’s permanent subcommittee on investigations held a hearing on February 4, 2010 about politically exposed persons from abroad hiding corruption monies in the United States.  At this hearing, the investigations subcommittee released its 330-page report "Keeping Foreign Corruption Out Of The United States: Four Case Studies".  A news release mentioning the hearing explained: "…that politically powerful foreign officials, and those close to them, have found ways to use the U.S. financial system to protect and enhance their ill-gotten gains".  

Copyright 2010 Fred L. Abrams

At “Target Of Corruption Probe Sues Hip-Hoppers For Supposed Fraud“, I first mentioned the nexus between former Turks & Caicos premier Michael Misick and Hip Hop Weekly Magazine.  The Forbes article “The Premier And The Hip-Hop Magazine” discussed the same thing and also quoted me.

This article specifically examined the Former Premier’s alleged investment in Hip Hop Weekly Magazine through My Way Productions 2.  The Forbes article additionally described Sir Robin Auld’s public corruption investigation of the Former Premier and asked at page 1:

 “How did My Way Productions 2 get its funding? According to the investigation carried out by Sir Robin Auld, Misick supplied a document that showed $300,000 was transferred to My Way Productions 2 in 2007 from a company called Windsor Investment Group. Misick claimed the money was a dividend from that company, which he and his brother partially owned.”

The supposed transfer of $300,000 dollars into My Way Productions 2 had been expressly mentioned at page 146 ¶¶4.75 & 4.76 of Sir Robin’s “Final Report to the Governor of the Turks and Caicos Islands“.*  The $300,000 dollars was also apparently discussed at pages 51, 53, & 54 of a transcript from the Former Premier ‘s January 14, 2009 public corruption hearing.  Besides all of the foregoing, assertions made by New Jersey lawyer David J. Finkler might too shed light on the Former Premier’s connection to Hip Hop Weekly Magazine.

Continue Reading The Former Premier’s Nexus To Hip Hop Weekly Magazine