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Schemes to hide assets can involve bulk-cash smuggling combined with other methods.
A scheme to hide assets from you may be carried out by combining bulk-cash smuggling with other concealment methods.

A divorcing spouse; judgment debtor; tax cheat; etc. may use several methods to conceal assets. “Red Flags For An Asset Search” listed 18 of these methods.  The methods for hiding assets included: bulk-cash smuggling; shell companies; multiple jurisdictions; foreign bank accounts; & nominees.  These methods might have been combined by Mr. Victor Lipukhin to conceal more than $10 million dollars in secret Swiss bank accounts. The press release “Former President of Russian Steel Producer’s U.S. Subsidiary Indicted for Hiding Assets in Secret Swiss Bank Accounts,” talked about Mr. Lipukhin’s alleged scheme to hide assets from the IRS.

Mr. Lipukhin was indicted on 3/20/2014 because of the suspected scheme.  The indictment suggests Mr. Lipukhin may have employed bulk-cash smuggling; multiple jurisdictions; shell companies; & other methods to conceal his alleged beneficial ownership of Swiss bank accounts. Mr. Lipukhin is thought to have initially formed shell companies in the Bahamas which he allegedly used to open the Swiss bank accounts. Mr. Lipukhin might have hired a nominee director for the shell companies, who could have acted as a bank signatory on the Swiss bank accounts.

If Mr. Lipukhin used a nominee director, it would have helped hide his suspected beneficial ownership of the Swiss accounts. According to the indictment, Mr. Lipukhin supposedly relied on real estate transactions; mortgages & a Canadian lawyer to hide assets.  Mr. Lipukhin also reportedly bought an automobile by paying approximately $24,539 in cash.  Although the seller of the automobile was required to notify the IRS by filing a Form 8300, Mr. Lipukhin allegedly tried to persuade the seller to keep quiet about the sale.  If this actually happened, it would have been a red flag that Mr. Lipukhin might have engaged in bulk-cash smuggling or money laundering.  The criminal case against Mr. Lipukhin is still pending at the prosecutor’s office, as the Court’s docket report reveals.

Image: Gorich/Shutterstock.com

Copyright 2016 Fred L. Abrams

USA v. Trahan was about the criminal prosecution of former FBI Special Agent, Gregory Paul Trahan. During Mr. Trahan’s divorce, Mr. Trahan hid bank accounts and cash from his wife. Mr. Trahan also helped a person in another divorce, hide community property / cash. In furtherance of Mr. Trahan’s scheme to hide community property, Mr. Trahan withdrew several hundred thousand dollars from bank accounts.  Mr. Trahan made these withdrawals in cash, with each withdrawal below $10,000.  From about 2018-2019, Mr. Trahan concealed part of this cash by making 20 cash deposits totaling $77,900 into secret bank accounts. Like Mr. Trahan’s cash withdrawals, Mr. Trahan’s 20 cash deposits were each under $10,000.

Mr. Trahan kept his deposits and cash withdrawals below $10,000 because Mr. Trahan knew if he deposited or withdrew $10,000 or more in cash, his banks would report him to the U.S. Financial Intelligence Unit FinCen. The banks would do this by filing Currency Transaction Reports about Mr. Trahan.  Meanwhile, Mr. Trahan’s “structuring” of cash deposits or cash withdrawals, (to stop banks from filing Currency Transaction Reports), constituted a crime as set forth at 31 U.S.C. Section 5324 (Structuring transactions to evade reporting requirement prohibited).

Mr. Trahan also stashed cash in family residences. Stashing large sums of cash can sometimes be an indicator of bulk cash smuggling. Furthermore, Mr. Trahan had hidden money in a nominee bank account.  This basically meant Mr. Trahan hid cash by transferring it to a bank account titled in the name of Mr. Trahan’s strawperson / intermediary. On October 19, 2023 Mr. Trahan was charged with structuring via his criminal information. Then, on November 1, 2023 Mr. Trahan pleaded guilty to one count of structuring. The Court sentenced Mr. Trahan on March 4, 2024. Mr. Trahan was sentenced to five years probation and a $100,000 fine.

For some general information about the common concealment methods Mr. Trahan apparently employed, click on the following links:

Image: calcassa / Istock.com

Copyright 2024 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

I first wrote about Donnie in my post, Forfeiture & The DEA’s Asset Search.  In that post, I mentioned that Donnie was a former Special Agent with the Drug Enforcement Administration who had gone to Iraq to train Iraqi Police.  Donnie recently left the Numaniyah National Police Training Academy to travel about an hour’s drive southeast of Baghdad on a military convoy to Al Kut ( Camp Delta).  He had gone to Al Kut to work through a contracting company on a new job, similar to that of a Border Police Advisor.

As part of his new job, Donnie will be sent to the Basrah Training Academy where temperatures can reach up to 140-150 degrees in August.  He will advise the Iraqi Department of Border Enforcement about its training course for recruits.  According to a Multi-National Force press release, the Department of Border Enforcement “training course is an eight-week course that involves instruction in military training, border patrols, checkpoint set up, vehicle searches, and detecting narcotic and human smuggling”.

In addition to covering the above subjects, Donnie will teach how to detect bulk-cash smugglers / illicit cash couriers, during border inspections.  As INTERPOL’s First International Conference on Illicit Cash Couriers suggested, training border personnel to detect cash smuggling is critically  important.  This is true because criminals like money launderers and terrorists often use couriers to conceal and transfer cash through airports or other border crossings.  FOXNews.com reported on July 29 for example, that terrorists smuggle cash across Iraq’s borders to help finance al-Qaida’s operating budget in Iraq.

Copyright 2008-2022 Fred L. Abrams

Fred L. Abrams, divorce and hidden assets attorney, handles cases involving divorce and hidden assets. Therefore, Attorney Abrams may be able to help you if you are a spouse in a high-net-worth marriage going through a divorce or other places.  The Court’s distribution of marital assets during your divorce can be one of the most…

Bulk Cash Smuggling

On February 2, 2021 Mr. Vincent DelGiudice pleaded guilty in his federal case to concealing assets by money laundering and conducting an illegal gambling operation in Illinois. During 1996, a Cook County Illinois court also reportedly convicted Mr. DelGiudice of keeping a gambling place. Meanwhile, Mr. DelGiudice’s federal case gives us a glimpse of 4 ways people conceal assets: bulk cash smuggling; portable valuable commodities, purchasing real estate; & employing offshore elements.

I.               Bulk Cash Smuggling & Portable Valuable Commodities
When federal agents in Mr. DelGiudice’s federal case raided Mr. DelGiudice’s home in April 2019, they found over $1 million in cash. The federal agents would have likely considered this cash to be an indicator that Mr. DelGiudice had concealed assets by bulk cash smuggling.  During their April 2019 raid of Mr. DelGuidice’s home, the federal agents also found coins worth $92,623 and $347,895 in silver bars and jewelry. The federal agents probably viewed the coins, silver bars and jewelry, as indicators that Mr. DelGiudice had used portable valuable commodities to conceal assets.

II.              Real Estate & Cross Border Elements
Mr. DelGiudice is also thought to have hidden money he earned from his gambling operation by using this money to purchase real estate like his Orland Park, Illinois home.  Therefore, at Mr. DelGuidice’s plea agreement in his federal case, Mr. DelGiudice agreed to the government’s forfeiture of the home.  Additionally, Mr. DelGiudice is believed to have used offshore elements to conceal his earnings from his gambling operation. This is shown by Mr. DelGiudice’s employment of an offshore company in Costa Rica which handled the accounting and website management of Mr. DelGiudice’s Illinois-based gambling operation.

Copyright 2022 Fred L. Abrams

Everybody knows there can be hidden community property in ultra-high-net-worth divorces.  Meanwhile, the ultra-high-net-worth divorce between Mr. Bill Gates and his wife Melinda does not now appear to involve hidden community property.  Their divorce does however, give us a glimpse of the kinds of community property the Court often divides in ultra-high-net worth divorces. Mr. and Mrs. Gates recently filed an agreement in Court which reportedly identifies and divides their community property. Additionally, Mr. Gates is thought to have already transferred $2.4 billion to Mrs. Gates. Part of this transfer to Mrs. Gates included 14.1 million shares of Canadian National Railway Co. and 2.94 million shares in AutoNation Inc. Among other things, the couple’s community property includes 422 square miles of land across more than a dozen states, cars & art.

3 Ways Community Property Can Be Hidden

Although Mr. & Mrs. Gates appear to be amicably dividing their community property, here are some ways a spouse can hide community property during an ultra-high-net worth divorce:

  • Arts / Antiquities: Ultra-high-net worth couples often possess valuable art / antiquities. However, a divorcing spouse may secretly purchase valuable art / antiquities. During the divorce this spouse may then fail to disclose the art / antiquities.
  • Yachts & / or Airplanes: Some businesses offer their clients the service of titling a yacht & / or aircraft in the name of a Delaware or other shell company. A divorcing spouse may hide community property by employing and abusing these services.  Furthermore, a divorcing spouse may easily place a yacht & / or airplane out of reach by parking it offshore across international borders.
  • Bulk Cash Smuggling: Contrary to what one would think, enormous amounts of cash can be hidden.  This cash may then be washed at a money laundering circuit.  At AMC’s Breaking Bad tv episode “Say My Name,” fictional lawyer Daniel Wachsberger used at least nine safety deposit boxes to smuggle cash for his clients. A real world case of suspected bulk cash smuggling involved Zhenli Ye Gon (“Ye Gon”). Ye Gon was extradited from the United States to Mexico for an alleged drug conspiracy. During March 2007, the hundreds of millions in cash shown here were found in Ye Gon’s Mexican home in a concealed room next to his bedroom:

Copyright 2021 Fred L. Abrams

Asset Recovery Workshop October 8-11, 2018
Photo from the asset recovery workshop held October 8-11, 2018 in Abuja, Nigeria.

Fifteen West African countries sent judges; &/or prosecutors; &/or law enforcement agents to attend the asset recovery workshop I recently lectured at in Abuja, Nigeria. I was one of four resource persons at the workshop which was a joint project of the European Union and the Inter Governmental Action Group Against Money Laundering In West Africa. At the work shop, I talked about government officials, (i.e “politically exposed persons“), who launder large bribe payments offshore. I explained that others hiding vast sums of money also usually launder their money offshore. Therefore, if you are going to conduct asset searches to detect hidden money, you should learn to spot the money laundering indicators.

I) MONEY LAUNDERING INDICATORS

The indicators include: employing strawpersons to act as bank signatories; abusing trusts; hoarding cash/engaging in bulk cash smuggling; etc. I made a list of the indicators at my post “Red Flags For An Asset Search.” The money laundering case involving  Mr. Vladimir Kuznetsov has some of these indicators. As I mentioned in a lecture I gave during the asset recovery workshop, Mr. Kuznetsov was a Russian diplomat working at the United Nations in New York City. Prosecutors in the United States accused Mr. Kuznetsov of washing bribe payments through Nikal, Ltd. which was a suspected offshore shell company Mr. Kuznetsov had formed. Mr. Kuznetsov used Nikal, Ltd. to open an offshore bank account in Antigua & Mr. Kuznetsov titled the offshore bank account in the name of Nikal, Ltd.

Mr. Kuznetsov’s associate, (who took bribe payments from companies seeking contracts at the United Nations), transferred bribe payments to Mr. Kuznetsov’s offshore bank account. Mr. Kuznetsov then reportedly wire transferred the bribe payments in his offshore account to financial accounts in New York City at Chase Manhattan Bank &/or the United Nations Federal Credit Union. On March 2, 2007, Mr. Kuznetsov was convicted of conspiracy to commit money laundering.  On October 12, 2007, Mr. Kuznetsov was  sentenced to fifty one months’ imprisonment. Money laundering indicators or red flags that Mr. Kuznetsov had hidden money were Mr. Kuznetsov’s use of a  suspected shell company, Nikal, Ltd. &  Mr. Kuznetsov’s use of the offshore bank account.

II) ASSET SEARCHES & THE MONEY LAUNDERING STAGES

Besides recognizing money laundering indicators, understanding the way money laundering works can help you succeed at your asset searches. Money laundering occurs in three stages: placement, layering & integration. These stages are thought to have been present in Mr. Kuznetsov’s case. Mr. Kuznetsov’s associate placed bribe payments into Mr. Kuznetsov’s money laundering circuit. This placement occurred when the associate wire transferred bribe payments to Mr. Kuznetsov’s offshore bank account. Mr. Kuznetsov layered by washing the bribe payments through his offshore bank account titled in the name of Nikal, Ltd. This layering disguised Mr. Kuznetsov’s beneficial ownership of the offshore account & the bribe payments. Integration would have happened if Mr. Kuznetsov introduced the washed bribe payments into the economy.  Mr. Kuznetsov could have integrated the bribe payments reportedly at the New York financial accounts, by using the bribe payments to buy things. Placement, layering & integration are described at this Egmont Group Money Laundering Video:¹

¹Video Courtesy of The Egmont Group of Financial Intelligence Units.

Copyright 2018 Fred L. Abrams

Panama Papers 4 18 16 PostLast Wednesday, prosecutors in Panama seized dozens of computer servers belonging to the Panama Papers law firm, Mossack Fonseca. The prosecutors might be investigating whether Mossack Fonseca violated money laundering laws when it supposedly helped clients hide assets offshore. A U.S. State Department report published last month analyzed how money is laundered in Panama. The report said:

Money is laundered via bulk cash and trade by exploiting vulnerabilities at the airport, using commercial cover and free trade zones (FTZs), and exploiting the lack of regulatory monitoring in many sectors of the economy. The protection of client secrecy is often stronger than authorities’ ability to pierce the corporate veil to pursue an investigation. (U.S. Department of State International Narcotics Control Strategy Report for Panama, March 2016)

Money can also be laundered in Panama by putting shell companies to work, the same way shell companies are used to launder money in other parts of the world. Assets may be secretly transferred to a shell company &/or a shell company may be used to open a secret offshore bank account. In these situations, the shell companies may act as laundering links which wash assets in a money laundering circuit.

Mossack Fonseca was apparently in the business of establishing shell companies. Businesses that establish shell companies are usually called “nominee incorporation services,” as mentioned by the November 9, 2006 advisory from U.S. Treasury’s Financial Crimes Enforcement Network. The advisory essentially reveals that shell companies & nominee incorporation services can be a money laundering risk. The webpages of Panama Offshore Worldwide demonstrate the way one nominee incorporation service works.

At “Anonymous Panama Corporation” &/or “Panama Bank Secrecy,” Panama Offshore Worldwide seems to describe how you can open a secret offshore bank account by titling the account in the name of a Panamanian shell company. Panama Offshore Worldwide indicates that if you want additional anonymity, you should staff your Panama corporation with nominee directors (i.e. stand-ins/intermediaries):

We provide nominee directors for the corporation, so your name is not actually registered in the government’s documents and therefore cannot be traced back to you.  The corporation is controlled with shares, which are registered by date at a notary and not accessible online like the directors of a corporation. (Panama Offshore Worldwide’s “Panama Bank Secrecy” Webpage. Web. April 16, 2016.)

Image: leolintang/Shutterstock.com

Copyright Fred L. Abrams 2016

shutterstock_15830203
Iran & Qatar sit on the largest natural gas field in the world.  As a consequence of this, Iran may have a discreet & shared income with Qatar.

Part 1 &/or Part 2 of this post described recent efforts by the judgment creditors in Havlish v. bin Laden to collect on their judgment against Iran for more than $1.3 billion dollars.  The judgment creditors sought to attach monies allegedly connected to a deal to purchase Airbus aircraft for Iran’s Mahan Air.  The judgment creditors also issued subpoenas to U.S. Treasury’s Office of Foreign Assets Control.  The subpoenas were about assets related to Iran and various terrorist groups.

How else might the judgment creditors proceed with their asset search & collect on their judgment against Iran?  Although the April 2nd preliminary nuclear accord with Iran lifts many economic sanctions against it, Iran had tried to skirt the sanctions throughout the years.  By recognizing ways Iran may have skirted the sanctions, the judgment creditors might detect money trails.   The judgment creditors would hopefully then be able to follow the money trails by using letters rogatory and other asset recovery tools.  This in turn could bring the judgment creditors closer to collecting on their billion-dollar-plus judgment against Iran.

Discreet Income From The World’s Largest Natural Gas Field?

374px-SouthParsLocationMap

Qatar sits on the largest natural gas field in the world but it also goes under Iran. This is the South Pars/North Dome natural gas field.  Wikipedia says “[a]ccording to the International Energy Agency (IEA), the field holds an estimated 1,800 trillion cubic feet (51 trillion cubic metres) of in-situ natural gas and some 50 billion barrels (7.9 billion cubic metres) of natural gas condensates.”  Iran reportedly allowed Qatar to develop its gas extraction and marketing but only with Iran’s permission.  Furthermore, nobody checks what Qatar does with its income.

It is therefore possible that Iran circumvented economic sanctions via a quiet and discreet shared income from Qatar.  As discussed last week at a Reuters article, Iran announced it will soon open up 2 additional gas operations in the South Pars Field.  The Tasnim News Agency reported that the 2 new gas operations, (i.e. refineries), should bring Iran $6 billion in annual revenue.

Iran’s Cross-Border Elements In Dubai

Iran’s particular location at the Persian Gulf also helped Iran to evade the sanctions.  In geographical terms, the Persian Gulf is dominated by Iran similar, say, to the U.S. dominating the Carribbean and Gulf of Mexico.  Iran’s geographical location made it easy for Iran to maintain cross-border elements in places like Dubai.  Iran has more companies in Dubai than anywhere else in the world excepting Iran itself.  Dubai additionally has a large expatriate population of Iranian businessmen.  So, similar to Austria during the Cold War, Dubai is a little country busy importing.  As reported at “Iran smuggles in $1 billion of bank notes to skirt sanctions” Iran also engaged in bulk cash smuggling through cash couriers & front companies in Dubai and other locations in or near the Persian Gulf.

First Image: Claudionegri79/Shutterstock.com

Second Image: Courtesy of Wikipedia (Licensed) by Alireza824

Copyright 2015-2018 Fred L. Abrams