The criminal conviction of former Taiwanese President Chen Shui-bian; the death of suspected Ponzi schemer Danny Pang; and the dismissal of a Holocaust-era assets case; are the subjects of this week’s "Asset Search News Roundup":

  •  Former Taiwanese President Chen Shui-bian’s arrest was discussed in the November 19, 2008 "Asset Search News Roundup".  As the New York Times and / or the BBC reported, former President Chen Shui-ban has now been convicted of public corruption charges and for hiding monies by laundering them through foreign financial accounts in Switzerland.

Raymond Dowd, Esq. who spoke at the June 2009 Holocaust Era Assets Conference in Prague, analyzed the August 11th decision in "German and Other Foreign Heirs in New York: Standing To Sue Clarified In Andrew Lloyd Weber Picasso Case". 

As my April 30, 2009 article "Holocaust-Era Art Restitution Revisited" stated, Mr. Schoeps was also a party to another art restitution case.  In Schoeps v. The Museum of Modern Art, et. al., Index No. 1-07-CV-11074, Mr. Schoeps had argued that he was entitled to restitution of the two Picassos, “Boy Leading a Horse” & “Le Moulin de la Galette”.

Copyright 2009 Fred L. Abrams

This "Asset Search News Roundup" is about two New York criminal defense attorneys who among other things, were accused of violating privacy law by possessing illegal eavesdropping equipment.  On August 20, 2009, attorneys Robert Simels and Arienne Irving were found guilty of importing and possessing illegal eavesdropping equipment in violation of 18 U.S.C. §§2512 (1) (a) & (b). 

Ms. Irving was eventually acquitted of all criminal charges on December 4, 2009 and a U.S. Attorney’s press release mentions that Mr. Simels was sentenced to 168 months of prison.  Mr. Simels’ jury verdict sheet additionally reveals that he was convicted of several witness tampering charges along with the bribery charge outlined by his July 10, 2009 superseding indictment.  He had apparently committed these crimes in connection with his representation of Mr. Shaheed Khan in a federal criminal case. 

An August 20, 2009 Drug Enforcement Administration press release called Mr. Khan a drug kingpin and claimed that Mr. Simels and Ms. Irving had imported the illegal eavesdropping equipment from Guyana, where Mr. Khan had used it.  My next article will again mention U.S. privacy law.  This upcoming article is called "Violating Federal Law In An Asset Search".  It describes how a private detective may have conspired to illegally access customer account information maintained at a U.S. bank.

(Edited December 12, 2009)

Copyright 2009 Fred L. Abrams

The U.S. Department of Justice believes that seizing assets from Mexican drug cartels can generally help combat cross-border murder, kidnapping, robbery, etc.  Through the person of the Criminal Division’s Assistant Attorney General Lanny A. Breuer, the Department of Justice reiterated its desire to seize the illicit assets of illegal narco-traffickers.

Assistant Attorney General Breuer stated at a July 22, 2009 conference, that U.S. asset forfeiture and money laundering laws gave authorities the necessary tools to trace and then seize illicit drug-related assets.  He stressed the importance of disrupting the finances of narco-traffickers because their existence was fueled by large sums of cash.  The Assistant Attorney General also said that prosecutors should conduct financial investigations and add asset forfeiture claims to indictments in their criminal cases.

He additionally stated in a July 9, 2009 hearing before a committee of the U.S.House of Representatives, that: “… seizing the financial infrastructure of the cartels undermines their very existence“.  During the Assistant Attorney General’s July 9 and July 22 statements, he specifically mentioned Operation Xcellerator, which had targeted the Sinaloa drug cartel.  A May 17, 2007 news release also discussed Sinaloa narco-trafficking.  It.claimed that Ismael Zambada Garcia, (as a supposed Sinaloa trafficker), had laundered drug monies via the following financial network:

 (To Fully View This Image, Click On It)

Continue Reading A Strategy Of Seizing Sinaloa Drug Cartel Assets

I discussed “clawback” in my July 18, 2009 “Asset Search News Roundup” as well as in “Clawback Caused By A Ponzi Scheme“.  These articles explained that assets may be recovered by clawback which can force an investor to return presumptively fraudulent profits, as mentioned by In re: Bayou Group LLC, et. al., 396 B.R. 810 (Bkrtcy S.D.N.Y. 2008).

The September 1, 2009 article “Madoff Liquidator May ‘Claw Back’ Charities’ Profits” similarly talks about clawback.  It explained that SIPC trustee Irving Picard may file a new round of clawback claims to recover assets dissipated during Bernard Madoff’s Ponzi scheme.  If filed as adversary proceeding complaints in bankruptcy court, trustee Picard’s new clawback claims would probably be based on:

  1. 11 U.S.C. §542 (Turnover of property)
  2. 11 U.S.C. §544 (Trustee as lien creditor)
  3. 11 U.S.C. §547 (Preferences)
  4. 11 U.S.C. §548  (Fraudulent transfers and obligations)
  5. 11 U.S.C. §550 (Liability of transferee of avoided transfer)
  6. 11 U.S.C. §551 (Automatic preservation of avoided transfer)
  7. N.Y. Debtor Creditor Law §§270 et. seq.

Trustee Picard’s effort to recover assets through clawback claims in the Madoff case, has already included his filing of these two adversary proceeding complaints:

(Click On Each Image To View The Clawback Complaints)

Copyright 2009 Fred L. Abrams

As partly suggested by the list of statutes at my post, "An Asset Search, Tax Fraud & Divorce", hiding assets may lead to a variety of white-collar crimes.  Perhaps attorney Stephen Yagman’s June 22, 2007 conviction on one count of tax evasion, one count of bankruptcy fraud, and seventeen counts of money laundering, best demonstrates that the foregoing is true. 

Between 1994 through 1997, Mr. Yagman accumulated a $158,000 tax liability for the underpayment of his personal income tax and also failed to pay some payroll tax owed by his law firm.  To avoid Internal Revenue Service collection proceedings, he hid hundreds of thousands in nominee bank and brokerage accounts maintained by his girlfriend.  Mr. Yagman then concealed these assets when he filed for personal and corporate bankruptcy.

Depending on the circumstances, foreign money laundering laws could also possibly be violated when assets are hidden in an offshore bank account.  Finally, if assets have actually been hidden offshore, it may be necessary to consider the kind of legal remedies and / or forced collection proceedings described at "An Asset Search In Geneva".

Copyright 2007-2010 Fred L. Abrams   

An August 25 Newsweek article mentioned that Federal Reserve Chairman Ben Bernanke had fallen prey to identity thieves after Mr. Bernanke’s wife had her purse stolen.  One of the people believed to have been responsible for that identity theft is Clyde Austin Gray, Jr.  Mr. Gray had conspired to commit identity theft nationwide, according to the single-count criminal information in U.S.A. v. Gray, Index No. l:09-CR-00326.  A July 22, 2009 factual statement shows that Mr. Gray was a ringleader who had stolen over 2.1 million dollars from at least ten financial institutions such as SunTrust Bank of Atlanta and M & T Trust in Buffalo.

He and other identity thieves had acquired bank account numbers, credit cards, driver’s licenses and other identifying information through pick pocketing, mail theft, the use of “insiders” at professional offices, etc.  The August 25th Newsweek article additionally mentioned that Mr. Gray pleaded guilty in July to conspiracy to commit bank fraud (18 U.S.C. §1349).  The Newsweek article also observed that identity thieves can victimize both the “mighty and powerful” and “hapless consumers”.

In a completely different identity theft case I have written about, a major illegal narcotics trafficker lost the $6.3 million he had hidden in a Cayman Island bank account.  As set forth in “A Tax Fraud & Identity Theft From Miami“, that trafficker’s $6.3 million was transferred by an identity thief from the Cayman Island bank account to Mexico.  The identity thief had accomplished this transfer by impersonating the trafficker in two letters to the Cayman Island bank.

The trafficker however, soon learned that he had lost his millions because of the identity thief’s letters and then killed the identity thief.  Sanitized copies of these letters used by the identity thief to impersonate the trafficker, are reproduced below:

Click On The Above Letters For A Better View

Copyright 2009 Fred L. Abrams

The "Asset Search News Roundup" for this week focuses on the $1 billion asset forfeiture claim U.S. prosecutors brought against former Stanford Group CFO James F. Davis.  This $1 billion dollar claim was initially in the June 18, 2009 criminal information filed against Mr. Davis in U.S.A. v. Davis 4:09−cr−00335−1.  The information claimed that Mr. Davis had participated in the same multi-billion dollar Ponzi scheme Allen Stanford is accused of.

On August 27th Mr. Davis pleaded guilty to the fraud and obstruction charges part of his information.  At that time he consented to the forfeiture of up to $1 billion dollars in assets, as mentioned by the Court’s Agreed Order of Forfeiture.  Furthermore, the last paragraph of a U.S. Department of Justice press release indicates that the case apparently involves global asset forfeiture, with assets being sought in Canada, the United Kingdom, Switzerland, etc.

"Pursuing Forced Collection Proceedings Against A Fraudster Like Madoff", described a financial fraud case in which Geneva counsel sought to interdict illicit assets in both Switzerland and the U.S.  That case demonstrates the compelling fact that forfeiting / seizing illicit assets in Switzerland may be easier than in the U.S.  This is so because Switzerland has a lower legal threshold for seizing illicit assets, than respectively exists in the U.S.

Copyright 2009 Fred L. Abrams

My August 17th “Asset Search News Roundup” referred to the settlement of the case over the “John Doe” summons served on UBS in Miami.  As more fully discussed at “UBS & Its John Doe Summons“, the IRS had brought the case to identify U.S. tax cheats who concealed their UBS bank accounts in abusive offshore tax avoidance schemes.

The agreements settling the case are: the U.S. & Swiss Government Settlement, dated August 19, 2009 and the UBS Settlement With Consent To Public Disclosure.  Pursuant to the settlement, UBS is expected to supply the IRS with bank customer information belonging to about 4,450 suspected U.S. tax cheats.  UBS will also send the 4,450, (all of whom are believed to have secret Swiss bank accounts), this notice:

(Click On The  Images Below To Enlarge Them)

 

Furthermore, UBS is producing the customer information only under its tax treaties with the U.S., rather than the “John Doe” summons it was served with in Miami.  The first of these controlling agreements, is the October 2, 1996 “Avoidance of Double Taxation Treaty”, described here.  The second is the January 23, 2003 Mutual Agreement, which clarified the earlier October 2, 1996 agreement.  These 1996 and 2003 tax treaties are examples of governmental authorities using formal cross-border cooperation, as described by my article: “Eliciting Evidence From Foreign Bank Witnesses“.

(Edited May 15, 2010)

Copyright 2009-2010 Fred L. Abrams

Albert Gonzalez was arrested in the Southern District of Florida on May 8, 2008 pursuant to this warrant:

Click On The Arrest Warrant To Enlarge It

The arrest arose out of Mr. Gonzalez’s alleged computer hacking / identity theft scheme which was later outlined in a May 14, 2008 New York superseding indictment.  This superseding indictment in U.S.A. v. Yastremskiy, et. al., 08-cr-00160, claimed that Mr. Gonzalez and his co-defendants had stolen credit card information through computer intrusions at Dave & Busters, Inc. restaurants.  Mr. Gonzalez and / or his co-defendants were accused of violating federal laws including but not limited to: conspiracy (18 U.S.C. §371); fraud related to computers (18 U.S.C. §1030); wire fraud (18 U.S.C. §1343 ); access device fraud (18 U.S.C. §1029); aggravated identity theft (18 U.S.C. §1028A); etc.

Almost three months after the superseding indictment was filed against him in New York, Mr. Gonzalez was next indicted in Massachusetts.  According to the August 5, 2008 Massachusetts indictment in U.S.A. v. Albert Gonzalez, 08-cr-10233, Mr. Gonzalez had hacked computers which stored credit card information for BJ’s Wholesale Club, DSW, OfficeMax, Boston Market and others.

Like the New York superseding indictment, the Massachusetts indictment accused Mr. Gonzalez of: conspiracy (18 U.S.C. §371); fraud related to computers (18 U.S.C. §1030); wire fraud (18 U.S.C. §1343 ); access device fraud (18 U.S.C.§1029); and aggravated identity theft (18 U.S.C. §1028A).  The Massachusetts indictment also essentially asserted that Mr. Gonzalez had hidden the proceeds of his hacking / identity theft scheme by money laundering through multiple jurisdictions.

Continue Reading Using Foreign Computer Evidence Against An Accused Hacker

The settlement of the UBS "John Doe" Summons case in Miami and U.S. Secretary of State Hillary Clinton’s seven-nation tour of Africa, are covered by the August 17th "Asset Search News Roundup":

This past July, Transparency International also described public corruption in Kenya– another country part of Secretary Clinton’s seven-nation tour.  In July, Transparency International specifically labeled the Kenya Police as the most corrupt institution in all of East Africa, as indicated by my July 12, 2009 "Asset Search News Roundup".  Pictured below is Secretary Clinton at a town hall meeting in Kenya on August 6, 2009, during her seven-nation tour of Africa.

 

 

 Photo: U.S. State Department

Copyright 2009 Fred L. Abrams