Some post-judgment creditors, divorcing spouses and other private litigants use a domestic summons / subpoena to elicit an adversary’s bank customer information from a foreign bank witness.  Under limited circumstances, these private litigants might serve a domestic summons / subpoena, as set forth by the Court in First American Corp. v. Price Waterhouse, 154 F.3d 16 (2d Cir. 1998).

Assuming that a subpoenaed foreign bank witness refused to comply with a domestic summons / subpoena because of bank secrecy laws, then the issues raised by Old Ladder Litigation Co. LLC. v. Investcorp Bank B.S.C, et. al., No. 08-CV-00876 (S.D.N.Y. May 29, 2008), can be relevant.  U.S. authorities also sometimes elicit bank account information by serving a domestic summons on a foreign bank witness.

The IRS for example, served a domestic summons on UBS AG, headquartered in Zurich, as discussed in “UBS & Its ‘John Doe’ Summons” & “A Domestic Subpoena / Summons In An Offshore Asset Search“.  U.S authorities might also serve a subpoena on a foreign bank witness by relying on In Re Grand Jury Proceedings (Bank of Nova Scotia), 740 F.2d 817 (11th Cir.), cert. denied, 469 U.S. 1106 (1985).   Other methods used to elicit evidence from a foreign bank witness, (besides domestic summonses / subpoenas), often rely on cross-border cooperation.

Formal methods using cross-border cooperation can involve: letters rogatory (a.k.a. legal assistance requests); executive orders; mutual legal assistance or other treaties like tax information exchange agreements.  The formal methods of obtaining evidence from foreign witnesses are generally discussed in Section 274 of the United States Attorneys’ Manual.  At 9.7.10.2 (07-28-2003), Obtaining International Cooperation, the IRS Manual additionally mentions some of them, in connection with international asset forfeiture.

(Last Edited October 13, 2010)

Copyright 2009-2016 Fred L. Abrams

The jury’s August 5, 2009 verdict in U.S.A. v. Jefferson, found former congressman William Jefferson guilty of hiding bribery proceeds by laundering them, as described by the 12th, 13th and 14th counts of his indictment.  The August 5, 2009 verdict and a U.S. Department of Justice press release also state that Mr. Jefferson is guilty of soliciting bribes, honest services wire fraud, racketeering and conspiracy. 

An August 6, 2009 jury verdict similarly found that about $470,000 dollars in two bank accounts were criminal proceeds subject to asset forfeiture.  Under the August 6 verdict, stock shares in companies likely used as Mr. Jefferson’s nominees, can be forfeited.  These stock shares are for a Nigerian company, "W2-IBBS"; a Ghanaian company, "International Broad Band Services, LLC"; a Delaware company, "Multi-Media Broad Band Services, Inc."; and a company in Indiana, "iGate, Incorporated".

As was previously reported by the media, investigators in U.S.A. v. Jefferson had interdicted $90,000 in a freezer on August 3, 2005, pursuant to a search warrant executed at Mr. Jefferson’s Washington D.C. home.  A search warrant of Mr. Jefferson’s congressional office had also been executed along with the one below for Mr. Jefferson’s New Orleans home: 

To View The Entire Search Warrant, Click On The Above Image

A challenge prosecutors in U.S.A. v. Jefferson undoubtedly faced, was the fact that part of Mr. Jefferson’s bribery scheme included cross-border elements in Nigeria, Ghana and other African countries.  To acquire evidence from foreign witnesses, prosecutors therefore sought relief in the form of mutual legal assistance and via letters rogatory.  These same methods are commonly used to obtain evidence from foreign bank witnesses and are discussed in my upcoming article, "Eliciting Evidence From Foreign Bank Witnesses".

Copyright 2009 Fred L. Abrams

“Goering Hoards Nudes, Jingles Emeralds in Catalog of Looted Art“, quotes Reichsmarschall Hermann Goering as having said: “During a war everybody loots a little bit“.  The May 28, 1945 Time Magazine article “Art: Goring’s Beauties“, valued Goering’s collection of Nazi-looted art at $200,000,000.

Here is a June 9, 1945 photograph of part of that art collection recovered from Goering, as it was being cataloged and temporarily stored near Berchtesgaden in the German Bavarian Alps:

  Photo: National Archives and Records Administration

Since more than 20% of Europe’s art is believed to have been looted by the Nazis, it is no surprise that Holocaust-era art restitution cases continue to this day.  Articles I have written about these cases include:

*Searching For Nazi-Looted Art

*Mr. Curt Valentin’s Nazi-Looted Art

*Holocaust-Era Art Restitution Revisited

*Laundering Holocaust-Era Loot?

*Asset Search News Roundup: June 25, 2009

Copyright 2009 Fred L. Abrams

Bernard Madoff’s wife Ruth, is featured in this week’s "Asset Search News Roundup".  I explained in my June 27, 2009 post, "Will Ruth Madoff Keep Her Remaining $2.5 Million In Assets?", that Madoff trustee Irving Picard could file a viable lawsuit against Ruth Madoff.  Last week this actually happened, when trustee Picard filed his July 29 complaint in Irving H. Picard v. Ruth Madoff, Adversary Proceeding 09-01391, U.S. Bankruptcy Court for the Southern District of New York. 

The July 29 complaint seeks almost $45 million from Ruth Madoff under the Bankruptcy Code and New York State’s version of the Fraudulent Conveyance Act codified at N.Y. Debt. & Cred. Law §§270-281.   The complaint asserts that Ruth Madoff was involved in fraudulent conveyances / was the wrongful transferee of assets from Bernard Madoff. 

To ultimately determine whether Ruth Madoff was a wrongful transferee, the Court will likely look for "badges of fraud", as explained by "Bernard Madoff & The Badges Of Fraud".  In analyzing any asset transfers to Ruth Madoff, the Court might particularly rely on Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (2d Cir. 1983).  According to Kaiser, the following can be badges of fraud in relation to an asset transfer:

(1) the lack or inadequacy of consideration;

(2) the family, friendship or close associate relationship between the parties;

(3) the retention of possession, benefit or use of the property in question;

(4) the financial condition of the party sought to be charged both before and after the transaction in question;

(5) the existence or cumulative effect of a pattern or series of transactions or course of conduct after the incurring of debt, onset of financial difficulties or pendency or threat of suits by creditors; and

(6) the general chronology of the events and transactions under inquiry. (Id.)
   

Copyright 2009 Fred L. Abrams 

A true beneficial owner may try to hide his / her assets by smuggling cash across a country’s border, into another jurisdiction.  My July 27th article, “A Yola, A Police Sergeant & A Restauranteur“, mentioned the issue of smuggled cash.  “Smuggling Cash Across Iraq’s Border” and “Offshore Bank Accounts In Liechtenstein“, also raised this issue.

According to a July 21, 2009 press release, nearly $100,000 was recently seized as it was allegedly smuggled in a box of laundry detergent at a Laredo, Texas port of entry.  This too essentially happened on March 1, 2009 in Hldalgo, Texas, when a box of laundry detergent and a spare tire were reportedly used in an attempt to smuggle $561,132.00.

 

Copyright 2009 Fred L. Abrams

In my June 1, 2009 "Asset Search News Roundup" I wrote about how national tax authorities can enter into tax information exchange agreements.  The July 24, 2009 article "Tax Transparency Is Set To Increase", also discusses these agreements, which sometimes uncover offshore assets hidden in a tax fraud.  As "Tax Transparency Is Set To Increase" and the articles below suggest, there could be an emerging trend toward the execution of more tax information exchange agreements:

Copyright 2009 Fred L. Abrams 

After an at-sea interdiction, U.S. prosecutors are seeking asset forfeiture of a 26- foot yola (boat) and the nearly $1.7 million on board alleged to be undeclared currency hidden in two suitcases and a small bag.  The captain of the yola was Sergeant Juan Quinones-Rosario of the Police of Puerto Rico and its crew member was an Aguada, Puerto Rico restauranteur, Raul Bosques-Caro. 

The sergeant and restauranteur were reportedly on one of two yolas traveling on July 20, 2009, towards the Dominican Republic from Aguada, Puerto Rico.  The yolas had been spotted in international waters by patrol aircraft and were ultimately searched by federal agents.  Given the discovery of the alleged undeclared cash on the yola, the sergeant and restauranteur are both facing prosecution in U.S.A. v. Bosques-Caro, et. al. 3:09-cr-00246. 

Their three-count indictment in Bosques-Caro, alleges violations of 31 U.S.C. §§5316(a) (1) (A) (Reports on exporting and importing monetary instruments); 5332 (a) & (b) (Bulk cash smuggling into or out of the United States); and 18 U.S.C. §2 (Principals).  Asset forfeiture of $1,694,139.00 and the yola, is now being sought under 31 U.S.C. §§5317 (c) (1) (Search and forfeiture of monetary instruments) and 5332 (b) (2).  Along with a criminal complaint, a Special Agent’s supporting affidavit had also been initially filed in the case.

Copyright 2009 Fred L. Abrams

"An Asset Search, Tax Fraud & Divorce" mentioned that Brian, (a former high-ranking official at the Financial Crimes Enforcement Network, who had earlier been an IRS special agent), said: "Once a tax fraud investigation starts rolling along, nobody knows where it may end up". 

Today’s "Asset Search News Roundup" is similarly about the numerous individuals just arrested because a money laundering investigation ended up uncovering suspected public corruption crimes in New Jersey.  As yesterday’s Department of Justice press release basically indicated, federal investigators had initially focused on some money laundering circuits.  In these money laundering circuits, five rabbis had supposedly washed monies by using charities; and / or a Brooklyn Bakery; and / or other  "cash houses".

Cash couriers, (whom I referenced in my April 13 2009 Asset Search News Roundup), also reportedly helped wash the monies across borders, between Israel and the United States.  The money laundering investigation however, eventually expanded and led to the arrests of three mayors, a deputy mayor, two assemblyman and many others, for suspected public corruption crimes in New Jersey.

Copyright 2009 Fred L. Abrams

If your are suing your adversary over hidden assets, you might be able to use link charts.  You can use the charts in court to show how your adversary has hidden money or other assets. Financial Intelligence Units, local law enforcement, prosecutors, etc. visually analyze data through link charts like the one below from U.S. Treasury’s Office Of Foreign Assets Control.  It analyzed the drug trafficking network of Medellin-based Francisco Antonio Florez Upegui:

(To Enlarge, Click On Image)

Governmental authorities employ link charts to discover associations or patterns in voluminous data. Depending on the kind of investigation, a governmental authority may use a link chart to analyze: telephone toll records, medical prescriptions, cash deposits, border crossings, etc. Software with link charting features can even be used to help a government search for and forfeit illicit assets.  GoAML/goATR is asset tracking software with this charting ability and it is mentioned at “Asset Forfeiture Goes Global.”

Chart: U.S. Treasury Office Of Foreign Assets Control

(Edited April 27, 2018)

Copyright 2009-2018 Fred L. Abrams

Attempts to recover assets connected to securities fraud are the subject of this "Asset Search News Roundup": 

  • Requiring investors to return monies, (i.e. applying clawback), may be another way to recover assets arising from securities fraud, as mentioned by the article "Clawback Caused By A Ponzi Scheme".  As more fully set forth in that article, In re: Bayou Group LLC, et. al., 396 B.R. 810 (Bkrtcy S.D.N.Y. 2008), deems monies paid-out to some investors to be presumptively fraudulent and possibly subject to clawback. 

Copyright 2009 Fred L. Abrams