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The bottom of p. 5 of this Wolfsberg Group Statement says money laundering risks include financial “[a]ccounts for ‘gatekeepers’ such as accountants, lawyers, or other professionals for their clients where the identity of the underlying client is not disclosed to the financial institution.“

It is therefore no surprise that assets hidden through laundering…

The New York Post and Bloomberg wrote last month about the appeal pending in Cohen v. S.A.C. Trading Corp., et. al., (11-1390-cv). The Cohen appeal is over the trial court’s March 30, 2011 dismissal of Patricia Cohen’s Second Amended Complaint.  The Second Amended Complaint accused Ms. Cohen’s ex-husband, (billionaire hedge fund manager Steven Cohen), of tax fraud, money laundering, securities fraud and other alleged crimes.

This complaint also pleaded civil RICO, common law fraud, breach of fiduciary duty and unjust enrichment claims because Mr. Cohen had purportedly hidden marital assets from Ms. Cohen during their 1990 divorce.  The gravamen of the complaint was that Mr. Cohen supposedly defrauded Ms. Cohen out of marital assets which she was arguably entitled to recover.

According to the complaint, Mr. Cohen had invested $8,745,169 dollars in co-op apartment conversions, with former attorney Brett K. Lurie.  By January 1987, Mr. Lurie had allegedly repaid Mr. Cohen $5.5 million of the $8,745,169 dollars.  The complaint claims the $5.5 million was a marital asset hidden by Mr. Cohen and omitted from his 1988 Statement of Financial Condition.  This financial statement identified the $8,745,169 dollar investment with Mr. Lurie as a “non-liquid asset”:

(To Read The Entire Financial Statement, Click On The Highlighted Excerpt)

Continue Reading The Asset Recovery Case Of Cohen v. S.A.C. Trading Corp.

Todays “Asset Search News Roundup” mentions whistleblower programs:

  1. An Asset Search Via Whistleblowers & Other Tipsters comments on IRS and SEC efforts to sniff out fraudulently concealed assets with the help of reward programs.  Forbes’ March 2nd article IRS Whistleblowers See Little Reward, also describes these programs.  The article compares one to the other

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“Human Intelligence & The SEC’s Whistleblower Program” examines the government’s handling of tips in its search for assets concealed by securities fraudsters.  The IRS Whistleblower Program similarly seeks tips from informants who help the IRS detect assets concealed in tax frauds.

Besides these whistleblower programs, tips can often be generated in a variety of ways.  “Warsaw Prosecutors Eye Possible Money Laundering At 50 Platowcowa Street” highlights a tip supplied through an anonymous letter.  This tip letter caused Polish prosecutors to launch a money laundering investigation and search for funds connected to a suspected shell company in Delaware.

“An Asset Search, Tax Fraud & Divorce” meanwhile, describes how a prospective tipster was interviewed by Brian, an ex-IRS special agent and former high-ranking official at FinCEN.  Brian conducted this interview to locate marital assets believed to have been hidden by a divorcing husband suspected of tax fraud.

Continue Reading An Asset Search Via Whistleblowers & Other Tipsters

A Primer For Gathering Financial Intelligence pronounces “Human intelligence can be the only practical way to uncover some sophisticated asset concealment schemes.”   The SEC Whistleblower Program sniffs out human intelligence by offering rewards for tips regarding securities fraudsters.  A November 2011 report shows the Whistleblower Program generated 334 tips during the seven week period from August 12, 2011 to September 30, 2011.

Jordan A. Thomas, (once an assistant director and senior attorney at the SEC), had a leadership role in developing this program.  Mr. Thomas drafted the proposed whistleblower legislation and briefed House and Senate staffs on it.  He is a partner at Labaton Sucharow LLP and chairs its Whistleblower Representation Practice.

His guest post featured below, notes that financial incentives and retaliation protections will cause the whistleblowers to come forward.  It also recognizes “the locating of hidden assets will play a major role in these whistleblower actions.”


The SEC Whistleblower Program: A Revolution in Law Enforcement?

Jordan A. Thomas

While the Securities and Exchange Commission (SEC) has just released its 2011 annual report touting a record number of enforcement actions, the $2.8 billion in monetary sanctions recovered seems a drop in the bucket against what the serial schemers have stolen.  But the game is changing, and the recovery of concealed assets will play a role in this revolution.

Under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC established a new and, in many ways, revolutionary whistleblower program, which was finalized and implemented in August.  With the specter of major financial awards and protection from workplace retaliation, individuals now have powerful incentives to speak out against misconduct and report possible violations of the US securities laws. The eligibility requirements are broad and relatively straightforward.Continue Reading Human Intelligence & The SEC’s Whistleblower Program

An October 25th press release describes a forfeiture effort pursued by the U.S. Government against Teodorin Nguema Obiang, Equatorial Guinea’s Minister of Forestry and Agriculture and the first son of Equatorial Guinea’s head of state.  For me, this press release raises another issue:  Could Equatorial Guinea nationals commence a lawsuit in the U.S. against Nguema and Equatorial Guinea?

Such a lawsuit might claim that Nguema collected vast sums of monies during an alleged public corruption scheme originating in Equatorial Guinea.  It could also allege that Nguema had possibly used the supposed corruption proceeds to help fund his lavish lifestyle which included the purchase of this palatial Malibu, California mansion at 3620 Sweetwater Mesa Road:

Among the many questions this prospective lawsuit raises, are: Would the claimants who are Equatorial Guinea nationals, possess a cognizable claim in a lawsuit filed in the U.S.?;  and Could Equatorial Guineas’ immunity from lawsuits, (as contemplated by the Foreign Sovereign Immunities Act), be avoided because of the “commercial activity” or “takings” exceptions at 28 U.S.C. §§ 1605(a) (2) or (a) (3)?Continue Reading Suing Teodorin Nguema Obiang For His Malibu Mansion, Gulfstream Jet, Etc.

In one of the largest bankruptcies in Washington state history, Chapter 7 trustee James F. Rigby Jr. is searching for assets that belong to Michael R. Mastro’s bankruptcy estate.  The bankruptcy estate assets could include everything from life insurance polices to expensive jewelry and other portable valuable commodities.  During the March 24, 2010…