“A Strategy Of Seizing Sinaloa Drug Cartel Assets” is about the U.S. Department of Justice’s use of asset forfeiture against Mexico’s drug cartels.  U.S. Treasury’s Office of Foreign Assets Control (“OFAC”) pursues this forfeiture policy alongside the Department of Justice.  As explained by my February 11, 2009 “Asset Search News Roundup“, the OFAC can list drug traffickers as “Specially Designated Narcotics Traffickers“.

If a drug trafficker is placed on the “Specially Designated Narcotics Traffickers” list, than his / her assets subject to U.S. jurisdiction are frozen.  A February 25, 2010 press release reveals that the OFAC added seven supposed leaders of the La Familia Michoacana (La Familia) drug cartel, to the Specially Designated Narcotics Traffickers list.  These seven suspected La Familia leaders are depicted in an OFAC link chart:

 

(Click On The Chart To Enlarge It)

Chart Courtesy of U.S. Treasury’s OFAC

Copyright 2010 Fred L. Abrams

“Smuggling Cash Across Iraq’s Borders” mentioned Donnie the former DEA agent who had trained Iraqi border personnel to interdict bulk-cash smugglers.  To help detect these smugglers, governmental authorities also use declaration forms to track the cross-border movement of cash and monetary instruments.

As mentioned by my April 13, 2009 “Asset Search News Roundup“, one such declaration form is the “FinCen 105”.  It generally requires disclosure to the Bureau of Customs and Border Protection, when individuals physically transport, mail or ship more than $10,000 in cash or monetary instruments into the U.S.:

(To View The Complete Form, Click On The Image)

To avoid triggering the mandatory filing of a FinCen 105, Virginia medical doctor Andrew Silva had illegally structured cash by smuggling it in packages containing less than $10,000.  During an abusive offshore tax avoidance scheme, Dr. Silva mailed these packages of cash from Switzerland into the U.S., as outlined by his “statement of facts” filed in U.S.A. v. Andrew B. Silva.

Continue Reading A Doctor, A Lawyer & Bricks Of Cash In Switzerland

Today’s “Asset Search News Roundup” is about the New York case against the ex-president of Guatemala, Alfonso Portillo and it also mentions the sentencing of New York former top cop Bernard Kerik:

  • The one-count indictment unsealed on January 26, 2010 in the case against ex-president Portillo is available here.  Mr. Portillo’s indictment alleges that he embezzled monies in a public corruption scheme during his Guatemalan presidency.  According to his indictment, Mr. Portillo supposedly laundered illicit proceeds through multiple jurisdictions including: New York, Miami, Paris, Luxembourg and Switzerland.  He is specifically accused of violating 18 U.S.C. §1956 and the federal government is seeking asset forfeiture pursuant to 18 U.S.C. §982. 
  • As reported by Bloomberg.com on February 18, 2010, former NYPD Police Commissioner Bernard Kerik was sentenced to four years of prison for tax fraud and some of the other crimes described at “White-Collar Crime & A Former Top Cop“.  The letter Mr. Kerik sent to the Court just prior to his sentencing is available here:

(To Read Mr. Kerik’s Letter Click On The Image Below)

 Copyright 2010 Fred L. Abrams

The plaintiffs’ complaint in Grosz v. The Museum of Modern Art had alleged that The Museum of Modern Art (MoMA”) was the wrongful transferee of three Holocaust-era paintings.  The Court’s Order dismissed this contested provenance complaint last month on the ground that the complaint was barred by the statute of limitations.

Since the Grosz complaint was dismissed, attorney Raymond Dowd filed a Notice of Appeal on behalf of the plaintiffs.  Mr. Dowd will also be lecturing on March 24, 2010 at Sotheby’s Institute of Art where he will present “Egon Schiele’s Dead City: Current Issues in Nazi Art Looting and Recovery”.

Perhaps more interesting than the dismissal of the Grosz complaint, are the historical letters discussed by Grosz.  The following letters for example, were respectively mentioned during Grosz, at ¶¶39 & 48 of plaintiffs’ June 23, 2009 Declaration of Jonathan G. Petropoulos:

Continue Reading The Grosz Case & Gallery Owner Curt Valentin

This "Asset Search News Roundup" contains a copy of the indictment filed against Minneapolis auto magnate Dennis Hecker.  It also discusses the securities fraud complaints pending in New York against Bank of America.
 

  1. A press release from the U.S. Department of Justice announced that Mr. Hecker was indicted last Wednesday for allegedly hiding his assets.  "Has Auto Magnate Dennis Hecker Hidden His Assets?"  had described a few of Mr. Hecker’s supposed fraudulent financial transfers and explained that Mr. Hecker had reportedly been under criminal investigation.

    Mr. Hecker’s seven-count indictment accused him of concealing assets through money laundering in violation of 18 U.S.C. §1957.  The indictment additionally charged Mr. Hecker with allegedly violating 18 U.S.C. §1343 (wire fraud) and 18 U.S.C. §1349 (conspiracy to commit wire fraud).

     

  2. As an October 19, 2009 Amended Complaint and a January 12, 2010 Complaint demonstrate, the SEC had filed securities fraud complaints in New York against Bank of America.  These complaints were over alleged non-disclosure about Bank of America’s merger with Merrill Lynch and / or year-end bonuses paid to Merrill Lynch employees.

    The February 12th article "Fork It Over: Rakoff Wants the Scoop on Why Bank of America Fired Its GC " reported that the Court is contemplating a settlement of these SEC complaints.  Said article explained that Bank of America was also just sued in connection with its Merrill Lynch merger, by New York Attorney General Andrew Cuomo.  The New York Attorney General’s securities fraud suit can be viewed here. 

Copyright 2010 Fred L. Abrams

“High Risk Locations & An Asset Search” and “Domestic Shell Companies & An Asset Search” explain that Delaware-based shell companies can especially pose a money laundering risk. My other articles related to this same subject are:

Last month MoneyLaundering.com called me and expressed its interest in some of the foregoing. It then wrote “Polish Investigations into Delaware Companies Highlight Vulnerabilities to Laundering”,* which I am quoted in:


(Click On The Article Above To Fully Read It)

*Polish Investigations into Delaware Companies Highlight Vulnerabilities to Laundering, Copyright 2010 Alert Global Media, reprinted with permission.

(Edited February 14, 2010)

Copyright 2010 Fred L. Abrams

The Wall Street Journal’s February 4, 2010 article "Switzerland Freezes Freed Duvalier Assets", is about alleged illicit assets blocked in Switzerland. The blocked assets have been maintained in Swiss bank accounts and are believed to originate from Haiti’s public coffers. These public coffers were reportedly looted by former politically exposed person Jean-Claude "Baby Doc" Duvalier, who fled Haiti in 1986.

The Wall Street Journal article claims that foreign dictators no longer favor hiding assets at Swiss banks because of "tough" Swiss laws requiring banks to know the source of funds. The Swiss laws the article seems to refer to are commonly called "customer identification" or "know your customer" rules. Rules requiring banks to identify their customers have been adopted across the globe and are in effect in the United States, the United Kingdom, etc.

Swiss banks specifically follow customer identification rules by requiring their customers to execute a "declaration of beneficial ownership" which is also known as a "Form A". Swiss banks also routinely monitor customer accounts, consistent with international anti-money laundering standards. A former Yale Law School visiting scholar discusses the use of "Form A’s" and shares some of his views on Swiss banking, at "Customer Identification At UBS AG And Some Other Banks".

Copyright 2010 Fred L. Abrams

The Court announced yesterday that there had been a settlement in the New Jersey case involving Former Premier Michael Misick of the Turks and Caicos Islands.  The settlement is mentioned at the Court’s Order of Dismissal and by the current docket report.

According to various court filings, the Former Premier could have been a beneficial owner of Hip Hop Weekly Magazine through his alleged interests in: My Way Productions 2 LTD. (“My Way”), Z & M Media LLC (“Z & M”), and the holding company for Hip Hop Weekly Magazine, Hip Hop Global  Media, LLC (“HHG”). (Cf. Defendants’ Answer, Counterclaim and Third-Party Complaint at p. 26 ¶ 7) (claim that the Former Premier and his ex-wife LisaRaye McCoy were “real parties in interest”).

The Verified Amended Complaint in the New Jersey case meanwhile, indicated at ¶¶7, 57, 75, 78, 80 and Exhibit “H”,  that My Way or Z & M or HHG, might have been involved in making substantial capital contributions:

  1. $798, 647. 57 capital contribution from My Way into Z & M;
  2. $10,000.00 capital contribution from My Way into HHG;
  3. $833,334.00 capital contribution from My Way into HHG and Z & M;
  4. $260,000.00 capital contribution from Z & M to fund Hip Hop Weekly Magazine.

Continue Reading New Jersey Lawsuit Involving Former Premier Misick Settles

By using customer identification or “know your customer” rules, banks try to prevent money laundering and other financial frauds.  This use of customer identification rules by banks is contemplated at the Fifth Recommendation of the Financial Action Task Force.  The Fifth Recommendation urges banks to diligently verify a customer’s identity and to record the true beneficial ownership of bank accounts.

As reported at “Fighting Financial Fraud At UK Banks“, the UK changed its banks’ “know your customer” rules on December 15, 2007, by codifying them at Money Laundering Regulations 2007*.  U.S. banks too verify customer identities, but do so pursuant to 31 C.F.R Part 103.121.  Lawsuits alleging that two U.S. banks had failed to sufficiently identify their bank customers, are respectively described at: “Associated Bank Sued For Supposedly Ignoring Red Flags” and “Lawsuit Claims Wachovia Bank Facilitated Alleged Ponzi Scheme“.

UBS AG and other Swiss banks also require customer identification at the time a bank account is opened.  The customers of Swiss banks execute a declaration of beneficial ownership, commonly referred to as a “Form A”.  A July 13, 2001 “Form A” was used in the U.S. tax fraud case brought against Florida yacht broker Robert Moran.  According to the Plea Agreement in Mr. Moran’s case, the July 13th “Form A” helped demonstrate that Mr. Moran had violated 26 U.S.C. § 7206 (1), (perjury on a return / false statements).

Continue Reading Customer Identification At UBS AG And Some Other Banks

The January 29th "Asset Search News Roundup" talks about HealthSouth’s ex-chief Richard Scrushy and includes the most recent remarks of Assistant Secretary For Terrorist Financing David Cohen:

  • "HealthSouth Founder Scrushy Is Acquitted of Fraud" explained that Mr. Scrushy was acquitted in June of securities fraud and other criminal law violations. Mr. Scrushy was however, sentenced to prison in his separate bribery case. HealthSouth shareholders were also awarded a $2.8 billion dollar judgment against Mr. Scrushy. Some of the litigation by these shareholders / post-judgment creditors, is outlined at: "The Richard Scrushy asset search resumes".
  • My post "Transnationally Tracking The Assets Of Terrorists", briefly referred to the funding of Al Qaeda terrorists. Assistant Secretary For Terrorist Financing David Cohen just shared his thoughts about Al Qaeda, with the Council on Foreign Relations. To read the Assistant Secretary’s remarks, click on the following image:

Remarks Courtesy of U.S. Department of the Treasury.

Copyright 2010 Fred L. Abrams