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

A trailer for the “Better Call Saul” show features the dry cleaner used by TV’s money laundering lawyer Saul Goodman. For me, the trailer highlights the fact that some lawyers hide their clients’ money by washing it via laundering links in a money laundering circuit.  When lawyers wash large sums of money, the laundering links can be trusts; foreign or domestic bank accounts; shell companies; valuable real estate; etc. If a lawyer helps your adversary hide assets from you, there are basic measures for detecting assets which may help. The measures to search for these assets can include using: informants’ tips; forensic accountants; private investigators & pretrial discovery tools like the production request discussed here.

Furthermore, some Courts will order a lawyer concealing assets, to disclose those assets. As suggested at “An Asset Search Of A Lawyer Employed To Conceal Cash,” the Court might issue such an order even if the lawyer is hiding assets for a client who asserts the attorney-client privilege.  The fact pattern at the bottom of this post, (Case Ref: 06078), is from the Egmont Group of Financial Intelligence Units.  It describes how one lawyer/financial gatekeeper, laundered client monies. The following Asset Search Blog posts outline additional cases in which lawyers were thought to have hidden money:




Video: Courtesy of AMC Network Entertainment, LLC.

Case Ref. 06078 Courtesy of The Egmont Group of Financial Intelligence Units

Copyright 2016 Fred L. Abrams

Puzzle Money PhotoTo cheat you out of your fair share, your divorcing spouse, a business partner, an executor handling a decedent’s estate or someone else may hide assets from you.  As a result of an asset search or other investigation you might uncover a money trail for these hidden assets.

If you follow the money trail & locate the assets, how do you then recover them?  One way could be through a settlement with those hiding the assets from you.  You might also be able to recover the assets by pursuing available legal remedies.

These remedies sometimes include proving to the Court that assets were hidden from you through nominees (i.e. intermediaries); fraudulent transfers; &/or trusts.  To recover assets hidden these ways, you may have to demonstrate the following to the Court:

I.  NOMINEE OWNERSHIP —‘A nominee is one who holds bare legal title to property for the benefit of another.’ In re Callahan, 442 B.R. 1, 5 (D. Mass. 2010) (quoting Black’s Law Dictionary 1076 (8th ed. 2004)).  A true beneficial owner can easily hide assets by employing a nominee to make purchases &/or hold assets.  To recover these assets you may have to prove nominee ownership by showing that the owner transferred assets in anticipation of a lawsuit; that the assets were transferred to the nominee although the nominee did not pay for them; etc.  See e.g., 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).

II.  FRAUDULENT TRANSFERS—If there were badges of fraud when an asset was transferred, you might be able to recover the asset on the ground it was fraudulently transferred.  The badges are used to prove fraudulent intent or an intent to hinder creditors.  A fraudulent transfer is marked by the badges when assets are transferred in anticipation of a lawsuit or liability; when assets are transferred even though there is inadequate or no payment for them; etc.  The badges are listed at Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (2d Cir. 1983) and additional cases discussing them are at “Badges Of Fraud In Debt Collection, Divorce & Bankruptcy.

III.  TRUSTS—IRS Talking Points say that trusts can be misused “[t]o depreciate personal assets (such as a home)”; “[t]o deduct personal expenses”; “[t]o split income over multiple entities…”; “[t]o underreport income”; “[t]o avoid filing returns”; “to wire income overseas and fail to report it”; & “[t]o attempt to protect transactions through bank secrecy laws in tax haven countries.”  If a trust is abused in these kinds of ways to hide assets, assets could conceivably be recovered from the trust.

Depending on the circumstances, you may recover trust assets by claiming the trust is only a nominee owner; or by claiming that assets were fraudulently transferred to the trust.  It may also be possible to recover assets by piercing the trust veil on an alter ego theory.  The gravamen of this claim would be that the individual hiding assets at the trust & the trust were inseparable.  See United States v. Evseroff, No. 00-CV-06029 KAM, 2012 WL 1514860, (E.D.N.Y. Apr. 30, 2012) aff’d, 528 F. App’x 75 (2d Cir. 2013) (trust assets subject to collection/can be reached under nominee ownership, fraudulent conveyance and alter ego theories).

Image courtesy of Flickr (Licensed by) Images Money/Images_of_Money

Trust Photo

My post “Four Asset Concealment Tools” says that assets can be hidden by fraudulently transferring them to a trust.  This 15th post in the “Divorce & Hidden Money” series concentrates on the evidence a divorcing spouse might try to collect if marital assets are concealed by a trust.

A spouse can use the pretrial discovery phase of a divorce to gather evidence about any marital assets concealed by a trust.  Based on this evidence, the divorcing spouse may be able to credibly argue that assets at the trust are marital property subject to distribution by the Court.  A divorcing spouse might also claim the trust was void if the trust was “self-settled” (i.e. the grantor and beneficiary were found to be one and the same).  Under certain circumstances a divorcing spouse can additionally assert the trust veil should be pierced because the trust wrongly concealed assets &/or facilitated fraudulent transfers.  See Babitt v. Vebeliunas (In re Vebeliunas), 332 F.3d 85, 91 (2d Cir. 2003) (discussing New York cases where right to pierce trust veil was preserved).

Below is a demand for documents, (i.e. a production request) and demand for answers to interrogatories employed by the Chapter 7 trustee in the Seattle, Washington Michael Mastro bankruptcy case.  The Chapter 7 trustee made these demands suspecting Mr. Mastro hid assets at trusts.  Mr. Mastro had formed LCY Trust under Belizean law and it had a Belizean trustee, called “Compass Trust Corporation.”  The Chapter 7 trustee’s demands sought information regarding the location of assets, transfer of assets, banking records, etc.  They give a glimpse of the kind of evidence a divorcing spouse should collect if a trust is thought to conceal marital assets.

(To Access The Discovery Demands Click On Each Image)

Screen Shot 2015-03-23 at 3.28.48 PM

First image courtesy of Flickr (Licensed) by Syed Ikhwan

Copyright 2015 Fred L. Abrams

This is the fourth post in the “Divorce & Hidden Money” series.

Mr. Gaston Glock’s creation of the ubiquitous Glock pistol turned him into a billionaire and he is thought to be one of the twenty wealthiest individuals in all of Austria.  Mr. Glock’s ex-wife Ms. Helga Glock meanwhile, suspected he is concealing marital assets which could be connected to the couple’s 2011 Austrian divorce.

Ms. Glock therefore used civil law tools in an attempt to detect any marital assets / alleged hidden monies Mr. Glock supposedly possessed.  The civil law tools Ms. Glock employed included: 1) her Swiss petition to freeze a UBS bank account reportedly maintained by Mr. Glock in Switzerland; and 2) the March 18, 2013 request for judicial assistance filed at In re application of: H.M.G., U.S. District Court for the Northern District of Georgia, Index No. 13-cv-02598.


Ms. Glock’s March 7, 2013 affidavit filed at her request for judicial assistance, claimed Mr. Glock had earlier started hiding and moving personal and corporate assets in anticipation of the couple’s divorce.  The March 7th affidavit discussed Ms. Glock’s belief that Mr. Glock was trying to transfer assets out of her reach; and that there had allegedly been a steady flow of assets out of Austria.

According to the affidavit, there were financial transfers to the above-mentioned UBS Swiss bank account and to bank accounts in Liechtenstein or Luxembourg.  Also according to the affidavit, Mr. Glock had a Bermuda trust formed so that it could receive $51 million from “Glock”.  The affidavit additionally referred to the “worldwide Glock Group structure” and indicated the structure was thought to be partially depicted by this chart:

Continue Reading Divorce & Hidden Money: Helga Glock Claims Gaston Glock Started Concealing His Assets

Tipsters and protecting assets by going offshore–

Good offshore planning takes your assets out of your control and puts them in a place that the U.S. government cannot reach. The U.S. only has jurisdiction over people or property located within the U.S. borders. When you move your assets to an entity that is offshore, you remove your property from U.S. control.”


Copyright 2012 Fred L. Abrams

Today’s “Asset Search News Roundup” relays the details of a likey abusive trust scheme and an Egmont Group link chart.

  • Seattle’s Ubiquitous Asset Protection Lawyer, Ms. Mary Simon” outlines how an attorney was thought to have employed Belizean trusts as critical components in asset protection plans.  U.S.A. v. Arthur Lee Ong, U.S. District Court for the District of Hawaii, 09-CR-00398 meanwhile, illustrates the probable abuse of domestic trusts in an effort to “protect” assets from the IRS.  As his superseding indictment shows, Mr. Ong was accused of secreting undeclared revenue in nominee bank accounts opened in the names of his two trusts, Magnum Investments Trust and Aloha Ventures.  Mr. Ong had also allegedly hidden rental properties by titling the same in the name of Aloha Ventures.
  • Link Charts In An Asset Search” advises that a visual analysis of data may help one follow a money trail.  This kind of analysis is supplied by the link chart from page 13 of  the 2010-2011 Egmont Group Annual Report.¹  The link chart documents a money laundering circuit established by determined criminals.  As the link chart partly demonstrates, the criminals had transferred their illicit proceeds through multiple jurisdicitions, such as Spain, Greece and the Finnish cities of Helsinki and Tampere:


¹Link Chart & 2010-2011 Egmont Group Annual Report, Courtesy of The Egmont Group.

(Edited 5/19/12)

Copyright 2012 Fred L. Abrams

The U.S. Senate Permanent Subcommittee on Investigations August 1, 2006 report on offshore tax haven abuses explains that assets can be hidden with the assistance of  “lawyers, brokers, bankers, offshore service providers, and others” offering offshore asset protection.  Seattle lawyer Mary Simon appears to have especially provided offshore asset protection services that featured Belizean trusts.

As revealed by “Red Flags In One of Washington State’s Largest Bankruptcies”, Ms. Simon may have aided bankruptcy debtor Michael Mastro’s effort to protect assets by way of a Belizean trust.  Mr. Mastro had seemingly hidden assets in said Belizean trust and the Court ultimately deemed the Belizean trust assets, (and his assets at two other trusts), to be bankruptcy estate property.

This meant Mr. Mastro’s trust assets were subject to liquidation for the benefit of his unsecured creditors, as discussed by Mr. Mastro’s Bankruptcy Estate & His Self-Settled Trusts.  Besides surfacing at Mr. Mastro’s bankruptcy, Ms. Simon’s name popped up during U.S.A. v. Berg, the largest Ponzi scheme / fraud prosecution in Washington state history.  A November 30, 2010 sworn declaration filed in Berg, averred that Mr. Berg had conferred with Ms. Simon on the subject of an asset protection plan.

Although an August 3, 2010 letter purportedly signed by Ms. Simon, suggests the plan was never fully realized, Ms. Simon might have participated in the plans initial phase by allegedly starting the process for forming the “DB517” Belizean trust and the “DB517” Delaware company.  Documents reportedly linked to this Belizean trust and the Delaware company, were seized by FBI agents executing a search warrant on August 30, 2010 at Mr. Berg’s Seattle business office.  These documents can be viewed by clicking on the following image:


Copyright 2012 Fred L. Abrams

The February 6th “Asset Search News Roundup” concentrates on the possible abuse of attorney trust accounts:

  • Three UBS Clients Accused of Hiding Offshore Money From IRS” outlines the suspected tax fraud case against ex-San Diego tax attorney Christopher M. Rusch and Phoenix-area businessmen Stephen M. Kerr and Michael Quiel.  The three are accused of secreting assets via business entities and foreign bank accounts in multiple jurisdictions, including: Switzerland, Panama, St. Kitts and Nevis.  Their December 8, 2011 indictment asserts at paragraph “26”, that Mr. Rusch caused falsified Form A’s to be submitted to Swiss banks.  As “Customer Identification At UBS AG And Some Other Banks” indicates, Swiss banks detect the true beneficial owners of bank accounts by requiring bank customers to execute Form A’s.  Paragraphs 30, 31, 68, 72 & 74  of the indictment meanwhile, indicate that Mr. Rusch could have used his attorney trust account to transfer funds to and from secret Swiss bank accounts.
  • The following typology from the Egmont Group of Financial Intelligence Units also mentions an attorney trust account.  It fundamentally demonstrates the utilization of an attorney trust account as a laundering link, to wash monies placed in a money laundering circuit:

 Typology / Case# 06078, Courtesy of The Egmont Group

Copyright 2012 Fred L. Abrams

This “Asset Search News Roundup” scrutinizes offshore tax havens:

  1. A November 3rd press release describes “The Stop Outsourcing and Create Americans Jobs Act of 2011”, (HR 3338), introduced by Rep. Jerry McNerney (CA-11).  The press release explains “the bill would increase penalties for corporations guilty of a variety of illegal transactions related to an offshore tax haven, such as fraud or false claims.”  The press release additionally declares that the bill targets “tax loopholes that encourage corporations to ship jobs abroad ….
  2. The “Using A Trust to Protect Assets” webpage says one can shield assets with an integrated estate planning trust that has a foreign trustee.  The webpage argues “[s]ince the offshore trustee is not subject to U.S. court orders, the assets in the trust are protected from any attachments or seizures from U.S. judgments.”  It also proposes that the Cook Islands and Belize tax havens are best for establishing integrated estate planning trusts.

Copyright 2011 Fred L. Abrams