Searching for an adversary’s hidden assets can be like tracking a shell-game-operator.  In USA v. Khalili for instance, Mr. Dan Farhad Khalili was accused of hiding assets & undeclared revenue from the IRS for 15 years at 5 offshore banks. The offshore banks were located in Switzerland & Israel. Although on 4/27/11 Mr. Khalili applied for the IRS’ Voluntary Disclosure Program, the IRS found him ineligible for it. Mr. Khalili ultimately pleaded guilty to failing to file U.S. Department of Treasury Reports of Foreign Bank & Financial Accounts. On 4/25/17 Mr. Khalili was sentenced to 1 year & 1 day of prison. When you search for assets hidden through sophisticated schemes similar to the one Mr. Khalili was accused of, it may help to keep 3 goals in mind. These goals are to detect the paper trails, look for compartmentalization & seek transparency.

I. Detect The Paper Trails

One way your adversary may hide the paper trail of an offshore bank account is to open an offshore post office box. Your adversary could then have the offshore bank send monthly bank account statements & other documents to the offshore post office box. By maintaining these banking documents offshore, your adversary reduces the risk that you; domestic tax authorities; or anyone else; will detect the secret offshore bank account.

II. Look For Compartmentalization

A former intelligence officer I knew kept 1 cellular phone for incoming calls & another for outgoing calls. By compartmentalizing incoming & outgoing calls, the former intelligence officer was trying to hamper any investigation of his telephone toll records. Your adversary may compartmentalize his/her financial activities in a scheme to hide assets from you. For more information read my post “Compartmentalization & An Asset Search.”

III. Seek Transparency

By eliminating paper trails & compartmentalizing, your adversary can make his/her financial activities nontransparent. Your adversary can also make financial activities nontransparent via: fraudulent asset transfers; bulk-cash smuggling; art assets & cultural heritage property; diamonds or other portable valuable commodities; etc. These common concealment methods are outlined at “Red Flags For An Asset Search.”

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Copyright 2017 Fred L. Abrams

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If someone is hiding assets, you might detect the assets by reviewing: corporate records; patents & trademarks; court papers; U.C.C. filings; real estate documents; or through additional basic research.  “A Low-Cost Asset Search” gives information about how to perform basic research.  Although basic research can lead to a good result, it may not help you identify assets hidden through a complex concealment scheme.

The complex schemes might be facilitated by gatekeepers such as lawyers, accountants, officers, directors, etc.  The following details how a lawyer concealed assets with his organized crime client “Mr. M”, in a money laundering scheme:¹

Complex concealment schemes can among other things, also involve fraudulent asset transfers to third-parties & the placement of assets offshore.  To try to locate assets concealed by such schemes, it may be necessary for you to pursue your legal remedies & retain private investigators.  Legal remedies range from civil proceedings brought to attach bank accounts to employing criminal law tools. “An Asset Search In Geneva” lists these remedies for locating & recovering assets hidden at Swiss banks.  These remedies are not just limited to seeking assets at Swiss banks, as similar remedies are available in many countries around the world.

In addition to the use of legal remedies, private investigators can have an important role in asset search or recovery cases.  An investigator in one asset recovery case is described at the article “Private Investigators: An Asset Search By Pursuing Interviews & Tips.”  It highlights an effort to gather human intelligence about a divorcing husband thought to have hidden marital assets and committed tax fraud.  More articles featuring private investigators are: “An Asset Search In Switzerland”, “Following The Money Trail In Zurich” & “Fighting Financial Fraud At UK Banks.”

¹Case 08012, Courtesy of The Egmont Group

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Copyright 2015 Fred L. Abrams