A complaint verified by Former Premier Michael Misick of the Turks and Caicos Islands, claims hip- hop pioneers David Mays and Raymond Scott breached the Z & M Media LLC operating agreement, at Exhibit “A”.  The Former Premier, Mr. Mays, Mr. Scott and others, are believed to hold ownership interests in Z & M Media, which is the operating company for the biweekly  “Hip Hop Weekly Magazine“.

The complaint additionally seeks damages for more than a million dollars from Mr. Mays and Mr. Scott because of an alleged fraud / embezzlement scheme. Amended Complaint at ¶¶ 161-164.  It asserts that Mr. Mays and Mr. Scott might have misappropriated cash from Z & M Media. Id. at ¶¶ 33-44.

In responding to the complaint, Mr. Mays denied any wrongdoing via his opposing affidavit.  He also stated that Hip Hop Weekly was “the bible of the hip hop industry” with an estimated readership of one million. Opposing Affidavit ¶4.  Since February 2009, the magazine has been sold by the “CVS” chain and at many other retailers throughout the U.S., according to a letter from its distributor:

(Click On The Letter To Enlarge It)

On April 20, 2009 the Court issued a temporary restraining order against Mr. Mays and Mr. Scott, which prohibited any violation of the above-mentioned operating agreement.  This restraint was continued by the Court’s Order dated May 19, 2009.  Via their July 14, 2009 answer, counterclaim and third-party complaint, Mr. Mays and Mr. Scott however, alleged that the Former Premier had unjustifiably brought the complaint to gain complete control of Z & M Media.  The Former Premier would then supposedly sell Z & M Media and its assets to fund his defense against a “likely criminal prosecution by the British government“. (Answer, Counterclaim & Third-Party Complaint, at pp. 23-24, ¶3).

Continue Reading Target Of Corruption Probe Sues Hip-Hoppers For Supposed Fraud

A tax filing at the "Financials Page" of its website reveals that the Alavi Foundation had assets in 2007 with a fair market value of nearly $88 million.  Federal prosecutors meanwhile, filed an amended complaint last Thursday against The Alavi Foundation.  It sought asset forfeiture, as reported by Reuters, The New York Times and an FBI press release.

According to these news accounts, the gravamen of the amended complaint is that the nonprofit Alavi Foundation allegedly concealed the Iranian Government’s true beneficial ownership of a N.Y.C. Fifth Avenue building. The Alavi Foundation may have done this along with Bank Melli and ASSA CO. LTD and ASSA CORP. 

As described at  "Bank Melli Accused Of Hiding Its Fifth Avenue Assets", Bank Melli, ASSA Co. LTD. and ASSA CORP. have all been linked to terrorist financing.  All three are currently the subject of Weapons of Mass Destruction sanctions programs and U.S. economic sanctions.

After the filing of the amended complaint, the Court also acted pursuant to 18 U.S.C. §981 and issued a Warrant of Seizure for Alavi Foundation monies maintained at Sterling National Bank:

 

 (Click On The Warrant For A Better View)

Copyright 2009 Fred L. Abrams

The Financial Action Task Force (“FATF”), is the bellwether for the fight against global money laundering and terrorist financing.  Its leading role is recognized by U.S. lawmakers in the Bank Secrecy Act at  31 U.S.C. §5311, which states:

“FATF’s Forty Recommendations on Money Laundering and the … Special Recommendations on Terrorist Financing are the recognized global standards for fighting money laundering and terrorist financing. The FATF has engaged in an assessment process for jurisdictions based on their compliance with these standards.“

By following the FATF’s Forty Recommendations and Special Recommendations, governmental entities try to detect assets hidden by money launderers, identity thieves and other financial fraudsters.  Consistent with these Recommendations, the FATF just made its October 30th statement calling for greater transparency.  A higher degree of transparency could help uncover assets fraudulently concealed in financial institutions across the globe.

The FATF explained in its statement, that enhanced transparency was needed at financial institutions regarding customer due diligence; beneficial ownership; legal persons / legal arrangements (i.e. nominees); secrecy laws and cross-border exchange of information.

A few “Asset Search Blog” articles exploring these sort of topics are:

  1. “Concealing Assets By Circumventing Customer Identification Rules“
  2. “Beneficial Owners Concealing Their Foreign Bank Accounts”
  3. “Nominees & Hidden Assets“
  4. “Financial Discovery & Foreign Bank Secrecy Laws“
  5. “Asset Search News Roundup: September 23, 2009“

Copyright 2009 Fred L. Abrams

This “Asset Search News Roundup” scrutinizes offshore tax havens:

  1. A November 3rd press release describes “The Stop Outsourcing and Create Americans Jobs Act of 2011”, (bill H.R. 3338), introduced by Rep. Jerry McNerney (CA-11).  The press release explains “the bill would increase penalties for corporations guilty of a variety of illegal transactions related to an offshore tax haven, such as fraud or false claims.”  The press release additionally declares that the bill targets “tax loopholes that encourage corporations to ship jobs abroad ….“
  2. The “Using A Trust to Protect Assets” webpage says one can shield assets with an integrated estate planning trust that has a foreign trustee.  The webpage argues “[s]ince the offshore trustee is not subject to U.S. court orders, the assets in the trust are protected from any attachments or seizures from U.S. judgments.”  It also proposes that the Cook Islands and Belize tax havens are best for establishing integrated estate planning trusts.

Copyright 2011 Fred L. Abrams

On the radar this week is: former Police Commissioner Bernard Kerik’s guilty plea and following the money trail to Canada.

Following the money trail of this suspected securities fraud appears to have also led to Canada, as explained by the article "$300 million Oxford trail leads into Canada". 

Perhaps most notable, is that each one of the above-mentioned locations is generally considered by financial investigators to be a high-risk geographical location.  This means that a nexus to any one of them, can be a red flag for money laundering. 

 

 Copyright 2009 Fred L. Abrams

In "Forfeiture & The DEA’s Asset Search" Donnie the former DEA Special Agent spoke about the effectiveness of asset forfeiture.  In that article, Donnie said: ‘asset forfeiture… can stop those who supply pseudophedrine to the meth super labs and Mexican cartels‘.  "A Strategy Of Seizing Sinaloa Drug Cartel Assets" also recently explained that asset forfeiture was a vital tool in the fight against the Mexican drug cartels.

Notwithstanding the benefits of an ethical asset forfeiture program, there can be occasional abuses.  Eight plaintiffs raise the issue of supposed improper seizure or asset forfeiture in James Morrow et. al. v. City of Tenaha Deputy City Marshal Barry Washington et. al., U.S. District Court for the Eastern District of Texas, Index No. 2:08-CV-288.  These plaintiffs claim in their civil rights lawsuit pursuant to 42 U.S.C §1983, that some law enforcement officers in or near Tenaha Texas, had essentially seized assets in a racial profiling scheme. 

Furthermore, an August 20, 2009 Memorandum Decision & Order reveals that the presiding judge intends to certify the plaintiffs’ case as a class action lawsuit under Fed. R. Civ. P. 23(b)(2).  The plaintiffs who are African-Americans, assert they were driving in Tenaha Texas or on nearby state Highway 59.  They allege they were subjected to unconstitutional traffic stops and cash seizures based on their race or ethnicity. 

Continue Reading Seizing Assets In A Suspected Racial Profiling Scheme?

The October 22, 2008 "Asset Search News Roundup" mentioned the problem of money launderers concealing assets through money mules.  The Federal Deposit Insurance Corporation issued its own alert last week about this same use of money mules:

Click Here For A Complete View Of Last Week’s Alert

A money mule making a wire transfer can however, be especially vulnerable to detection.  This is true because at the time of a wire transfer, financial institutions and governmental authorities can search for "red flags".  Thirteen of these red flags are identified by "Money Laundering Red Flags, Wire Transfers", which is from the BSA / AML Examination Manual published by the U.S. government’s Federal Financial Institutions Examination Council.

Copyright 2009 Fred L. Abrams

“Bankruptcy Fraud, Money Laundering & Hidden Assets” outlines how a Chapter 7 debtor hid his Porsche and Rolls Royce and other assets.  That debtor eventually pleaded guilty to violating 18 U.S.C. §152 (Concealment of assets; false oaths and claims; bribery) and one count of 18 U.S.C §157 (Bankruptcy fraud).  “An Asset Search For Automobiles” similarly highlights how a Chapter 7 debtor concealed his $113,000 Porsche 911, by fraudulently transferring it out of state and registering it in the name of his brother.

A September 29, 2009 adversary complaint filed against 84-year-old Chapter 7 bankruptcy debtor Michael R. Mastro too claims that a valuable automobile was fraudulently transferred.  As part of this suspected fraudulent transfer, Mr. Mastro’s wife Linda, could have assigned Mr. Mastro’s $400,000 Rolls Royce to “LCY LLC Series Automobiles“.  The “Gift Statement” she reportedly executed, states that the Rolls was transferred without any exchange of consideration:

Continue Reading Mr. Mastro Supposedly Transfers His Rolls Royce & Other Assets

This "Asset Search News Roundup" is about the clawback claim filed against the late billionaire Jeffrey Picower and hiding assets by laundering them through multiple jurisdictions:

  • "Madoff friend drowned due to heart attack" reported that on October 25, 2009 billionaire Jeffrey Picower died because of a heart attack and accidental drowning in a swimming pool at his Palm Beach home.  The late Mr. Picower was sued for at least $5 billion by Madoff trustee Irving Picard in the adversary proceeding available here.  The Madoff trustee sought "clawback" of the $5 billion because it was alleged to be an investor’s profit from the Madoff Ponzi scheme.  Reuters meanwhile explained in "Madoff trustee ups claim against investor Picower", that this claim against Mr. Picower could have been raised to $7.2 billion.

I discussed this possible fraud again in my October 11th "Asset Search News Roundup".  As my October 11th Roundup explained, proceeds from the alleged fraud might possibly have been laundered in Switzerland, Panama, Costa Rica and the United Kingdom.   

If any criminal proceeds were actually transferred through these countries, then laundering through multiple jurisdictions may have occurred.  I refer to laundering through multiple jurisdictions and other asset concealment methods at my article: "Asset Search Indicia For Divorce, Debt Collection & Bankruptcy".

Copyright 2009 Fred L. Abrams

As I previously mentioned at the December 5, 2008 "Asset Search News Roundup", former NYPD Police Commissioner Bernard Kerik is alleged to have been involved in a public corruption scheme and tax fraud.  Mr. Kerik’s superseding indictment in U.S.A. v. Bernard B. Kerik, 07-cr-1027, accuses him of trying to secure city contracts for a New Jersey company which had supposedly paid him illegally through apartment renovations.

Mr. Kerik could have accepted some of this alleged illegal payment after being sworn in as New York City’s 40th police commissioner.  He is also accused of concealing the same by failing to report it as taxable income and may have taken false deductions in a tax fraud.  Sup. Indict. ¶¶ 20 (c) & 28-31.  

Although Mr. Kerik had been freed because of the $500,000 bail package mentioned at "Former NYC police chief Kerik jailed before trial", he was remanded by an October 20, 2009 Order revoking the conditions of his supervised release.  Before issuing this Order, the Court presumably considered the Government’s October 14, 2009 letter:

 

(To Read The Above Letter, Click On It)

Continue Reading Bernard Kerik Is Jailed While His Trial Is Delayed