A person hiding assets from you could park their money in an offshore bank account & hire an intermediary to be the account’s bank signatory. One website offers this “Bank Nominee Signatories Service” for a cost of about $1000 per year.  This person could additionally title their real estate in the name of shell companies. A person can also hide assets by converting cash into portable valuable commodities like diamonds and smuggle the diamonds offshore.

This kind of scheme is outlined by “Detecting Hidden Assets By Following A Money Trail.”  “Searching For Assets Hidden By Lawyers” examines another way to hide assets.  It explains a person might hide their cash by laundering it through a lawyer. In these kinds of schemes the person hides his/her true beneficial ownership of assets. You may be able to detect  true beneficial ownership & search for assets 3 ways:

I. Collecting human intelligence/informants’ tips is sometimes the only practical way to detect a sophisticated scheme to hide assets.  If there is an informant with knowledge of the hidden assets, the informant might be willing to tip you about the assets.  This informant may be a disgruntled: employee; family member; paramour; etc.

II. Private investigators may help you identify informants & gather leads about hidden assets through surveillance or other surreptitious means. Some investigators however, search for assets illegally or provide spurious information. Ex-Toronto private investigator Elaine White & ex-police detective Cullen Johnson for example, ran an “asset locator” business. They supplied their clients with bogus bank account information.

III. Legal tools can be critically important in searching for assets.  “How Does A Divorcing Spouse Recover Assets Concealed In A Swiss Bank Account?” gives a glimpse of the kinds of tools generally available in many countries across the globe. Among other things, the tools can include serving letters rogatory upon foreign bank witnesses & tipping prosecutors or other governmental authorities.

Image: Farizum Amrod Saad/Shutterstock.com

 Copyright 2017 Fred L. Abrams

Like the IRS & SEC you can sometimes search for assets by using whistleblower tips, my October 3rd program explains.

A) PROGRAM DESCRIPTION

At the New York County Lawyers’ Association on October 3, 2017 from 5:30 PM to 9:00 PM, I will be the program chair of “Whistleblowers, Secret Swiss Bank Accounts & Recovering Hidden Assets.” Attendee registration is available at the website available here or by calling the New York County Lawyers’ Association at (212) 267-6646. During the October 3rd program, I highlight the use of whistleblower tips to recover hidden assets.  I show how to search for assets which can be hidden by high net worth divorcing spouses; corporations; Ponzi schemers; tax fraudsters; etc.  I talk about tools you can use to recover assets hidden in Switzerland and other places across the globe. The October 3rd program also focuses on the Internal Revenue Service & Securities Exchange Commission whistleblower programs which can provide qualifying tipsters with the largest payouts compared to any other reward programs in the world.

Jack BlumWashington, D.C. attorney Jack Blum is well-known internationally for his representation of whistleblowers. In addition to others he has represented,  Mr. Blum will talk about Mr. Hervé Falciani, the whistleblower the media dubbed “the [Edward] Snowden of Swiss banking.”  Mr. Falciani allegedly stole Swiss bank account information from HSBC in Geneva and as a whistleblower turned the information over to French authorities. This alleged HSBC bank account information eventually fell into the hands of the International Consortium Of Investigative Journalists, which published part of it at their webpages known as the Swiss Leaks project.  Furthermore, Mr. Blum appeared on the CBS/60 Minutes television show to discuss the foregoing.  He will similarly discuss these matters at the October 3rd program and analyze: the IRS whistleblower program; problems whistleblowers face in the real world; and the difficulty lawyers may encounter in dealing with whistleblowers either as clients or tipsters.

ThomasLabaton & Sucharow partner Jordan A. Thomas will also speak at the October 3rd program.  Mr. Thomas will discuss the Securities Exchange Commission’s whistleblower program, as he is one of the world’s leading experts on it. He will review the advantages and disadvantages of the different whistleblower programs; and the ethical concerns gatekeepers like attorneys, accountants, officers and directors have, in reporting illegal behavior in both the civil and criminal contexts.  As more fully set forth below, Mr. Thomas: is a former assistant director in the Commission’s Enforcement Division; had a leadership role in developing the Commission’s whistleblower program; and was assigned to many of the Commission’s highest-profile matters such as those involving Enron, Fannie Mae, UBS & Citigroup.

Photo Charles Bott

Charles Bott QC, Head of Carmelite Chambers in the United Kingdom, is a recognized authority on financial crime and its regulation.  Subject to his availability, Mr. Bott may travel to New York to speak at the October 3rd program. He has appeared in more than 80 serious fraud trials including some of the leading cases of recent years and advised many other clients under investigation.  Mr. Bott specializes in cases of serious fraud, money laundering and revenue evasion; and in the United Kingdom, he is regularly instructed in serious criminal cases and regulatory cases of all kinds.

Continue Reading Whistleblowers, Secret Swiss Bank Accounts & Recovering Hidden Assets

Money Laundering Typology Post

One way to learn how to search for hidden assets is to read “A Laundry List For An Asset Search.” Another way is to study money laundering typologies. Money laundering typologies are used by law enforcement and regulators to develop countermeasures against emerging criminal trends. “100 Cases from the Egmont Group” contains a wide variety of money laundering typologies.¹ Although “100 Cases from the Egmont Group” arises from data collected during the 1990s, it is still relevant today. “100 Cases from the Egmont Group” describes these methods for concealing assets:

  • Concealment within existing business structures
  • Misuse of legitimate businesses
  • Use of false identities, documents or straw men
  • Exploiting international jurisdictional issues
  • Use of anonymous asset types

Below is the money laundering typology “Example B: Limited edition jewellery.”² It is about an agent who participated in an auction for a diamond necklace. The agent tried to conceal monies from suspected frauds by using multiple jurisdictions; offshore bank accounts & a portable valuable commodity—a diamond necklace.

Example B Limited editon jewellery

¹”100 Cases From The Egmont Group” courtesy of The Egmont Group of Financial Intelligence Units.

²“Example B: Limited edition jewellery” courtesy of The Guernsey Financial Services Commission.

First Image: studiostoks/Shutterstock.com

Copyright 2017 Fred L. Abrams

Back to Back Loan Image

Money Laundering, Marital Assets & Divorce was my first Asset Search Blog post highlighting back-to-back loans (i.e. a fully collateralized loan in which the borrower and the lender are one and the same). That post mentioned a divorcing husband who hid millions from his wife and the IRS, by claiming he was indebted because of an arm’s length business loan. The husband’s claim about owing money to an arm’s length lender was false, as the loan was back-to-back. In other words, the husband hid millions by secretly arranging to be both the borrower and lender of the loan; and by pretending to be in debt.

Federal prosecutors similarly discussed back–to-back loans in their tax fraud case against Los Angeles, California businessman Masud Sarshar. According to prosecutors, Mr. Sarshar hid tens of millions of dollars from the IRS by using two back-to-back loans and offshore bank accounts in Israel and Hong Kong. Mr. Sarshar supposedly maintained the offshore bank accounts in the names of intermediaries (i.e. nominees). Prosecutors also said an Israeli banker delivered offshore bank account statements to Mr. Sarshar by smuggling them into the U.S. on a USB drive hidden in a necklace.

To avoid being flagged as an American by the offshore banks, Mr. Sarshar is believed to have used Israeli and Iranian passports to open his offshore accounts. When Mr. Sarshar mentioned his offshore accounts during conversations with his Israeli bankers, Mr. Sarshar also reportedly spoke in code. On 3/13/17 Mr. Sarshar was sentenced to 24 months in prison for conspiring to defraud the U.S. and for seeking to impair/impede administration of internal revenue laws. Mr. Sarshar’s 8/1/16 plea agreement can be read here.

Image: Ionut Catalin Parvu/Shutterstock.com

Copyright 2017 Fred L. Abrams

3 HInts About Asset Searches

A divorcing spouse; judgment creditor; bankruptcy creditor; or a beneficiary under a trust or will; may face an adversary hiding assets through nominees (i.e. intermediaries). See cf., Fourth Inv. LP v. United States, 720 F.3d 1058, 1070 (9th Cir. 2013) (six-part test for nominee ownership applied to tax lien case). An adversary can hide real estate, automobiles, jewelry; and offshore bank accounts by titling them in the names of nominees. Nominees are easily accessed through nominee incorporation services like the one at the “Anonymous Panama Corporation” webpage.

The “Anonymous Panama Corporation” webpage can be used to form a Panamanian shell company with “nominee directors.” The initial fee for this service is $1200. The webpage suggests that one can “save taxes or protect…assets” by forming a Panamanian shell company:

[Y]our personal information will not be available in any government records, but [sic] still maintain complete control over your corporation. The Nominee Directors will not have control over your corporation and can be replaced at any time.

This type of corporation is a good choice if your objective is to save taxes or protect your assets. The actual owner of this corporation is not registered in public records.

Shell companies are not the only things that can be utilized as nominees. Lawyers; accountants; bankers; financial advisors; paramours; family members and trusts can be nominees. In the criminal prosecution called USA v. James S. Faller II, Case #: 13−cr−00029, the Court discussed how a nominee trust could be part of a scheme to hide assets from the IRS. Pages 13-14 of the Court’s 4/30/15 Memorandum Opinion and Order highlighted Mr. Faller’s alleged misuse of nominees.

Mr. Faller from Russell Springs, Kentucky, relied on “nominee names” to evade taxes, an IRS Special Agent’s affidavit claimed at ¶68. Prosecutors argued Mr. Faller evaded taxes by titling his home and bank account in the name of a trust believed to be Mr. Faller’s nominee. Mr. Faller was convicted of tax fraud and on 1/29/16 Mr. Faller was sentenced to 36 months’ imprisonment. Although Mr. Faller appealed his conviction, the U.S. Court of Appeals upheld the conviction at a 1/10/17 Opinion.

Image: Robert Kneschke/Shutterstock.com

Copyright 2017 Fred L. Abrams

12 8 16 Post
This 34th post in the “Divorce & Hidden Money” series highlights ways assets may be hidden in a money laundering circuit.

The November 30th New York Times Magazine article “How To Hide $400 Million” described the divorce between Sarah Pursglove & Finnish internet tycoon Robert Oesterlund. A document from Mr. Oesterlund’s lender allegedly indicated Mr. Oesterlund’s net worth was $400 million, “How To Hide $400 Million” said. This article also said Mr. Oesterlund claimed during the divorce that the ‘net family property’ was only worth a few million dollars.

Ms. Pursglove however, did not believe this and tried to search for assets reportedly hidden by Mr. Oesterlund. Based on “How To Hide $400 Million,” Mr. Oesterlund was an ultra-high-net-worth spouse who allegedly hid assets through:

  1. gatekeepers (such as lawyers & bankers);
  2. multiple jurisdictions;
  3. offshore bank accounts;
  4. shell companies;
  5. & trusts.

These can all be used as laundering links which wash assets in a money laundering circuit. A money laundering circuit is shown at a chart on a webpage from FINTRAC, a Canadian financial intelligence unit. An ultra-high-net-worth spouse may place assets into a laundering circuit through: structuring bank deposits; money mules/bulk-cash smuggling; diamonds or other portable valuable commodities; false invoicing schemes (i.e. trade-based laundering); wire transfers; etc. How do you perform an asset search when these methods are used to hide assets? Click here for seven tips.

Image: red mango/Shutterstock.com

Copyright 2016 Fred L. Abrams

10 26 16 Post

If you are litigating against an adversary who is hiding assets from you, subpoenaing your adversary’s credit card statements might help you track the hidden assets. As my post “Secreting Assets Without A Border Trace” suggests, expenses listed at a credit card statement may lead you to your adversary’s assets. “Secreting Assets Without A Border Trace” is about tracking a Ponzi schemer’s illicit assets. The Ponzi schemer in that post could have: converted cash into diamonds; parked the diamonds in a Swiss security box (i.e. safe deposit box); and opened a secret bank account in Luxembourg.

The subpoena available below has language you can include at a subpoena for credit card records. The subpoena was issued to American Express by the Chapter 7 trustee in Michael Mastro’s bankruptcy case.  Along with credit card statements, the subpoena requested “[c]opies of all checks, money orders, electronic transfer records, and other documents showing the source and manner of each [credit card] payment…” Some of my other posts discussing subpoenas are “An Asset Search of A Lawyer Employed To Conceal Cash” & “Eliciting Evidence From Foreign Bank Witnesses.

American Express Subpoena

Image of torn paper & word subpoena: arfa adam/Shutterstock.com

Copyright 2016 Fred L. Abrams

The instant post mentions hiding assets through: a lawyer; offshore bank accounts; etc. It is the 34th post at the "Divorce & Hidden Money" series.
The instant post mentions hiding assets through a lawyer; offshore bank accounts; etc. It is the 33rd post at the “Divorce & Hidden Money” series.

Ohio lawyer David Keith Roland was recently disbarred for using a Swiss bank account in a scheme to help a divorcing wife hide marital assets from her divorcing husband. The divorcing wife in this alleged scheme was chiropractor Denise M. Carradine of Boardman, Ohio. Mr. Roland had represented Ms. Carradine in a divorce action commenced by Ms. Carradine’s then husband, Eric Martin.

As part of the alleged scheme to hide marital assets from Mr. Martin, Ms. Carradine reportedly supplied Mr. Roland with $854,261.10. The Ohio Supreme Court Decision disbarring Mr. Roland said Ms. Carradine had “structured” payments of this money to Mr. Roland “to avoid detection under banking laws.” Mr. Roland deposited the $854,261.10 into two client trust accounts. Mr. Roland then wire transferred $814,105.96 of the $854,261.10, into a bank account at Maerki Baumann & Co. in Zürich, Switzerland.

This Swiss bank account may have been a nominee bank account, (i.e. an account titled in the name of an intermediary), beneficially owned by Ms. Carradine. Some of the money from the Swiss bank account was also transferred into a bank account located in the Turks & Caicos Islands. Based upon the foregoing, Mr. Roland’s & Ms. Carradine’s alleged scheme to conceal marital assets might have involved: structuring; a gatekeeper/lawyer; nominee bank accounts; multiple jurisdictions; & offshore banks.

Illustration: ollo/Shutterstock.com

Copyright 2016 Fred L. Abrams

Your Search For Assets Hidden Offshore

When naming offshore havens for opening secret bank accounts, people usually mention Switzerland, the Cayman Islands, Liechtenstein, etc.  Meanwhile, bank accounts in almost any country can be put to work to hide & place assets out of reach. “Using Multiple Jurisdictions To Launder Money” discussed a suspected scheme to bribe judges in Italy.  According to prosecutors, illicit proceeds from this offshore scheme were hidden in bank accounts located in the U.S. & elsewhere. “Money Laundering, Marital Assets & Divorce” outlines another scheme which relied on cross-border elements to conceal assets. The scheme involved a divorcing spouse in the U.S. who hid undeclared revenue in a Swiss bank & then “washed” it through a bank in Germany.¹

As the above essentially suggests, tracking assets offshore can become a critically important part of your asset search. How do you search for assets hidden offshore? One way is by employing legal tools. The following article discusses the tools federal prosecutors may use to collect evidence from witnesses residing offshore.² Two of the tools the article mentions are compelled consent forms & letters rogatory.  These two tools are not just for use by prosecutors. They are sometimes used by divorcing spouses, judgment creditors & others searching for offshore bank accounts/assets hidden offshore:

Click On The Image To Read The Entire Article

¹The fact pattern supplied at “Money Laundering, Marital Assets & Divorce,” has been changed & sanitized for privacy reasons.

²“Obtaining Foreign Evidence Outside of The Mutual Legal Assistance Treaty Process,” U.S. Attorneys’ Bulletin March 2007, is supplied courtesy of the Executive Office for United States Attorneys.

Image of offshore banking & tax haven concept: ChameleonsEye/Shutterstock.com

Copyright 2016 Fred L. Abrams

Offshore Image 5:30:16
As this 31st post in the “Divorce & Hidden Money” series reveals, you may be able to employ letters rogatory to detect assets hidden offshore.

A letter rogatory is an application to a foreign tribunal. It seeks permission to serve process on or gather evidence from a foreign witness. If you are in a divorce in the United States, letters rogatory can usually help you collect evidence of offshore assets your spouse hid from you. You might use letters rogatory to search for assets which can include: bank accounts; real estate; valuable art; business entities; etc. My February 25, 2015 post mentioned the use of letters rogatory in relation to divorce/child support cases in New York.

The February 25, 2015 post discussed one ex-husband who for 30 years failed to pay spousal maintenance &/or child support to his ex-wife in New York. Since the ex-husband lived in places like Mexico, the Dominican Republic & Barbados, legal proceedings in New York did not get the ex-husband to pay his ex-wife. Had the ex-wife been able to afford it, she might have hired lawyers to seek the issuance of letters rogatory to search for the ex-husband’s offshore assets. You may similarly employ letters rogatory if you are in a divorce outside of the United States & your divorcing spouse hid assets from you in the United States.

These kinds of cases are highlighted at Part 1 & Part 2 of “Asset Searches In The U.S. For Divorces Brought Outside The U.S.”  Below is a translated copy of a letter rogatory arising out of a divorce in the Republic of Colombia at The 8th Family Court, in Barranquilla.¹ In connection with The Family Court’s distribution of community property from a marriage, the letter rogatory requests bank account/bank customer information at Bank of America in the United States.

Letter Rogatory Colomibia

¹The letter rogatory has been partly sanitized for privacy reasons.

Offshore Image With Cash: esfera/Shutterstock.com

Copyright 2016 Fred L. Abrams