Asset Search Blog

Asset Search News Roundup: March 14, 2010

Fred Abrams — Sun, 14 Mar 2010 00:00:59 -0500

The March 14, 2010 "Asset Search News Roundup" first highlights ex-Detroit councilwoman Monica Conyers and then mentions Madoff Trustee Irving Picard:

*As The Wall Street Journal described at "House Judiciary Chairman’s Wife Sentenced to Prison" and "Lawmaker's Wife Sentenced to Jail", ex-councilwoman Monica Conyers was sentenced to 37 months of prison for her public corruption scheme. "Public Corruption Charges Against Two Politically Exposed Persons", was the last time I discussed Ms. Conyers.

*Yesterday's post "Mr. Cook Continues His Incarceration For Civil Contempt", recounted that Madoff Trustee Irving Picard had pursued forced collection proceedings in multiple jurisdictions. "U.S. judge backs Madoff trustee's claims method", recently reported on a separate issue involving Trustee Picard-- a controversy stemming from his valuation of investor's claims. Trustee Picard's efforts to recover assets through clawback claims in the Madoff case has also been debated by some.

Mr. Cook Continues His Incarceration For Civil Contempt

Fred Abrams — Sat, 13 Mar 2010 00:00:28 -0500

After I wrote my November 28th, 2009 "Asset Search News Roundup" about Minneapolis money manager Trevor Cook, he was incarcerated on January 25, 2010 for civil contempt of court. As the Court stated in its January 25, 2010 Opinion, the Securities and Exchange Commission and the Commodity Futures Trading Commission previously filed for injunctive relief against Mr. Cook.

They sought injunctive relief because Mr. Cook had allegedly participated in a Ponzi-like securities fraud which might have involved at least $190 million taken from 1000 or more victims. Also according to the January 25th Opinion, Mr. Cook violated a November 23, 2009 asset freeze by dissipating assets. The Court therefore remanded Mr. Cook to jail until "he purges himself of the contempt" by turning over:

$27,061,728.35 in foreign accounts;
$670,000 in cash;
$62,000 transferred to Mr. Cook's brother;
$6,141,470 paid to preferred persons;
$2,005,857.88 in domestic accounts;
$53,000 from the sale of a Maserati & Hummer;
a computer and documents formerly possessed by Mr. Cook's assistant;
a houseboat & a submarine;
his BMW, Lexus 430 & Lexus SUV;
his Bon Jovi tickets purchased in 2009;
and his collections of Faberge eggs and watches;

Furthermore, the Court's minutes reveal that Mr. Cook was still in contempt as recently as last Monday:

On November 23, 2009 the Court had also appointed R.J. Zayed, Esq. as the Receiver over estate assets belonging to Mr. Cook and others in this case. A February 16, 2010 application for fees suggests that Receiver Zayed is trying to interdict Receivership assets in Mr. Cook's case by working with: private investigators from Waypoint Inc., forensic computer examiners, local counsel in Panama, etc.

Pages 6-10 of the Receiver's March 4, 2010 "Second Status Report" additionally indicated that there were Receivership assets in the form of real property located in Panama and Canada. The above-mentioned January 25th Order too showed that $27,061,728.35 in Receivership assets had seemingly been maintained by Mr. Cook in foreign bank accounts. This suspected use of foreign bank accounts and other offshore elements, means that Receiver Zayad could be relegated to forced collection proceedings in multiple jurisdictions.

These are the same kinds of proceedings Madoff Trustee Irving Picard eventually had to pursue. Trustee Picard for example, explained at pp. 27-30 ¶¶ 93-100 of his July 9, 2009 First Interim Report, that Madoff estate assets were parked in: England, Gibraltar, Bermuda, the British Virgin Islands, the Cayman Islands, the Bahamas, Ireland, France, Luxembourg, Switzerland and Spain. Forced collection proceedings are generally available across the globe and can involve the legal remedies outlined by Swiss counsel at "An Asset Search In Geneva".

Asset Search News Roundup: March 7, 2010

Fred Abrams — Sun, 07 Mar 2010 00:00:14 -0500

This "Asset Search News Roundup" focuses on "politically exposed persons", some of whom would launder corruption monies.

"Stolen Asset Recovery: Politically Exposed Persons, A Policy Paper On Strengthening Preventative Measures" was published in 2009 and it is available at the Stolen Asset Recovery Initiative's website. The 2009 policy paper stated at page 17: "[I]f, as the World bank suggests, $1 trillion of corruption money is moving around the world each year, where is it? ....the money must be moving undetected through the banks and intermediaries and the current systems are failing to detect it".
The Senate's permanent subcommittee on investigations held a hearing on February 4, 2010 about politically exposed persons from abroad hiding corruption monies in the United States. At this hearing, the investigations subcommittee released its 330-page report "Keeping Foreign Corruption Out Of The United States: Four Case Studies". A news release mentioning the hearing explained: "...that politically powerful foreign officials, and those close to them, have found ways to use the U.S. financial system to protect and enhance their ill-gotten gains".

The Former Premier's Nexus To Hip Hop Weekly Magazine

Fred Abrams — Fri, 05 Mar 2010 00:00:14 -0500

At "Target Of Corruption Probe Sues Hip-Hoppers For Supposed Fraud", I first mentioned the nexus between former Turks & Caicos premier Michael Misick and Hip Hop Weekly Magazine. The Forbes article "The Premier And The Hip-Hop Magazine" discussed the same thing and also quoted me.

This article specifically examined the Former Premier's alleged investment in Hip Hop Weekly Magazine through My Way Productions 2. The Forbes article additionally described Sir Robin Auld's public corruption investigation of the Former Premier and asked at page 1:

"How did My Way Productions 2 get its funding? According to the investigation carried out by Sir Robin Auld, Misick supplied a document that showed $300,000 was transferred to My Way Productions 2 in 2007 from a company called Windsor Investment Group. Misick claimed the money was a dividend from that company, which he and his brother partially owned."

The supposed transfer of $300,000 dollars into My Way Productions 2 had been expressly mentioned at page 146 ¶¶4.75 & 4.76 of Sir Robin's "Final Report to the Governor of the Turks and Caicos Islands".* The $300,000 dollars was also apparently discussed at pages 51, 53, & 54 of a transcript from the Former Premier 's January 14, 2009 public corruption hearing. Besides all of the foregoing, assertions made by New Jersey lawyer David J. Finkler might too shed light on the Former Premier's connection to Hip Hop Weekly Magazine.

During the now settled New Jersey lawsuit involving the Former Premier and Hip Hop Weekly Magazine, Mr. Finkler made a special appearance on behalf of Z & M Media LLC. (April 29, 2009 Transcript of Proceedings, available below). At that time, Mr. Finkler characterized Z & M Media as the operating company for Hip Hop Weekly Magazine. (Id. at page 10).

According to page 12 of the April 29, 2009 Transcript of Proceedings, Mr. Finkler had claimed that "Mr. and Mrs. Missek [sic] were putting money in as investors". He also then alleged that My Way Productions 2 had "helped write" an employment agreement reportedly related to Hip Hop Weekly Magazine and its co-founders David Mays and Raymond Scott. (Id. at 13).

(Click On The April 29, 2009 Transcript To Read it)

*Final Report to the Governor of the Turks and Caicos Islands, is reproduced under the terms of Crown Copyright Policy Guidance issued by HMSO

(Edited March 6, 2010)

Asset Search News Roundup: February 28, 2010

Fred Abrams — Sun, 28 Feb 2010 11:56:24 -0500

"A Strategy Of Seizing Sinaloa Drug Cartel Assets" is about the U.S. Department of Justice's use of asset forfeiture against Mexico's drug cartels. U.S. Treasury's Office of Foreign Assets Control ("OFAC") pursues this forfeiture policy alongside the Department of Justice. As explained by my February 11, 2009 "Asset Search News Roundup", the OFAC can list drug traffickers as "Specially Designated Narcotics Traffickers".

If a drug trafficker is placed on the "Specially Designated Narcotics Traffickers" list, than his / her assets subject to U.S. jurisdiction are frozen. A February 25, 2010 press release reveals that the OFAC added seven supposed leaders of the La Familia Michoacana (La Familia) drug cartel, to the Specially Designated Narcotics Traffickers list. These seven suspected La Familia leaders are depicted in an OFAC link chart:

(Click On The Chart To Enlarge It)

Chart Courtesy of U.S. Treasury's OFAC

A Doctor, A Lawyer & Bricks Of Cash In Switzerland

Fred Abrams — Sat, 27 Feb 2010 00:00:25 -0500

"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.

Dr. Siva's tax fraud scheme is alleged to have been facilitated through an attorney working at a law firm located in Zurich, Switzerland. Dr. Silva's criminal information identified the attorney as an "unindicted co-conspirator" who was a member of the New York bar and had earned law degrees from the University of Zurich and New York University.

Court documents and "Case Is Said to Link HSBC to U.S. Tax Evasion Inquiry", mentioned that Dr. Silva had inherited $250,000 in 1997. Dr. Silva hid this money from the IRS by maintaining it in Switzerland in a nominee bank account held by a sham trust. The sham trust was allegedly formed in Liechtenstein by the attorney in Zurich, who also reportedly managed the Swiss bank account.

Said attorney is believed to have disbursed cash from the Swiss account by providing Dr. Silva with a wrapped brick of $100,000 in cash and a separate bundle of $20,000.00 in cash. A Swiss banker may have similarly provided Dr. Silva with monies from the Swiss account via a brick of $100,000 in cash and a bundle with $15,000 in cash.

Dr. Silva smuggled about $210,000 of the above-described cash by mailing it in approximately 25 packages from Switzerland into the U.S. He is also believed to have smuggled about $18, 000 in cash while an airline passenger at Swiss-U.S. border crossings. As Dr. Silva's plea agreement explained, he was convicted of violating 18 U.S.C §371 (Conspiracy) and 18 U.S.C. §1001 (False Statement). His sentencing is scheduled for May 7, 2010 in Virginia before U.S. District Judge Liam O'Grady.

Asset Search News Roundup: February 21, 2010

Fred Abrams — Sun, 21 Feb 2010 20:55:15 -0500

Today's "Asset Search News Roundup" is about the New York case against the ex-president of Guatemala, Alfonso Portillo and it also mentions the sentencing of New York former top cop Bernard Kerik:

The one-count indictment unsealed on January 26, 2010 in the case against ex-president Portillo is available here. Mr. Portillo's indictment alleges that he embezzled monies in a public corruption scheme during his Guatemalan presidency. According to his indictment, Mr. Portillo supposedly laundered illicit proceeds through multiple jurisdictions including: New York, Miami, Paris, Luxembourg and Switzerland. He is specifically accused of violating 18 U.S.C. §1956 and the federal government is seeking asset forfeiture pursuant to 18 U.S.C. §982.
As reported by Bloomberg.com on February 18, 2010, former NYPD Police Commissioner Bernard Kerik was sentenced to four years of prison for tax fraud and some of the other crimes described at "White-Collar Crime & A Former Top Cop". The letter Mr. Kerik sent to the Court just prior to his sentencing is available here:

(To Read Mr. Kerik's Letter Click On The Image Below)

The Grosz Case & Gallery Owner Curt Valentin

Fred Abrams — Fri, 19 Feb 2010 00:00:37 -0500

The plaintiffs' complaint in Grosz v. The Museum of Modern Art had alleged that The Museum of Modern Art (MoMA") was the wrongful transferee of three Holocaust-era paintings. The Court's Order dismissed this contested provenance complaint last month on the ground that the complaint was barred by the statute of limitations.

Since the Grosz complaint was dismissed, attorney Raymond Dowd filed a Notice of Appeal on behalf of the plaintiffs. Mr. Dowd will also be lecturing on March 24, 2010 at Sotheby's Institute of Art where he will present "Egon Schiele's Dead City: Current Issues in Nazi Art Looting and Recovery".

Perhaps more interesting than the dismissal of the Grosz complaint, are the historical letters discussed by Grosz. The following letters for example, were respectively mentioned during Grosz, at ¶¶39 & 48 of plaintiffs' June 23, 2009 Declaration of Jonathan G. Petropoulos:

(Click On Each Of The Letters To Fully View Them)

The above letters are about the late Curt Valentin who had opened and eventually owned the Bucholz Gallery on 57th Street in N.Y.C. Mr. Valentin had transferred some Holocaust-era art to MoMA, as more fully set forth by "Laundering Holocaust-Era Loot?" and / or "Mr. Curt Valentin's Nazi-Looted Art". "Mr. Curt Valentin's Nazi-Looted Art" too explains that art from Mr. Valentin's Bucholz Gallery had been seized by U.S. authorities in 1944 pursuant to The Trading With The Enemy Act.

Asset Search News Roundup: February 14, 2010

Fred Abrams — Sun, 14 Feb 2010 00:00:34 -0500

This "Asset Search News Roundup" contains a copy of the indictment filed against Minneapolis auto magnate Dennis Hecker. It also discusses the securities fraud complaints pending in New York against Bank of America.

A press release from the U.S. Department of Justice announced that Mr. Hecker was indicted last Wednesday for allegedly hiding his assets. "Has Auto Magnate Dennis Hecker Hidden His Assets?" had described a few of Mr. Hecker's supposed fraudulent financial transfers and explained that Mr. Hecker had reportedly been under criminal investigation.

Mr. Hecker's seven-count indictment accused him of concealing assets through money laundering in violation of 18 U.S.C. §1957. The indictment additionally charged Mr. Hecker with allegedly violating 18 U.S.C. §1343 (wire fraud) and 18 U.S.C. §1349 (conspiracy to commit wire fraud).
As an October 19, 2009 Amended Complaint and a January 12, 2010 Complaint demonstrate, the SEC had filed securities fraud complaints in New York against Bank of America. These complaints were over alleged non-disclosure about Bank of America's merger with Merrill Lynch and / or year-end bonuses paid to Merrill Lynch employees.

The February 12th article "Fork It Over: Rakoff Wants the Scoop on Why Bank of America Fired Its GC " reported that the Court is contemplating a settlement of these SEC complaints. Said article explained that Bank of America was also just sued in connection with its Merrill Lynch merger, by New York Attorney General Andrew Cuomo. The New York Attorney General's securities fraud suit can be viewed here.

The High-Risk Geographical Location Of Delaware

Fred Abrams — Thu, 11 Feb 2010 11:22:53 -0500

"High Risk Locations & An Asset Search" and "Domestic Shell Companies & An Asset Search" explain that Delaware-based shell companies can especially pose a money laundering risk. My other articles related to this same subject are:

Following The Money Trail From Poland To Delaware

Warsaw Prosecutors Eye Possible Money Laundering At 50 Platowcowa Street

Last month MoneyLaundering.com called me and expressed its interest in some of the foregoing. It then wrote "Polish Investigations into Delaware Companies Highlight Vulnerabilities to Laundering",* which I am quoted in:

(Click On The Article Above To Fully Read It)

(Edited February 14, 2010)

Asset Search News Roundup: February 7, 2010

Fred Abrams — Sun, 07 Feb 2010 00:00:06 -0500

The Wall Street Journal's February 4, 2010 article "Switzerland Freezes Freed Duvalier Assets", is about alleged illicit assets blocked in Switzerland. The blocked assets have been maintained in Swiss bank accounts and are believed to originate from Haiti's public coffers. These public coffers were reportedly looted by former politically exposed person Jean-Claude "Baby Doc" Duvalier, who fled Haiti in 1986.

The Wall Street Journal article claims that foreign dictators no longer favor hiding assets at Swiss banks because of "tough" Swiss laws requiring banks to know the source of funds. The Swiss laws the article seems to refer to are commonly called "customer identification" or "know your customer" rules. Rules requiring banks to identify their customers have been adopted across the globe and are in effect in the United States, the United Kingdom, etc.

Swiss banks specifically follow customer identification rules by requiring their customers to execute a "declaration of beneficial ownership" which is also known as a "Form A". Swiss banks also routinely monitor customer accounts, consistent with international anti-money laundering standards. A former Yale Law School visiting scholar discusses the use of "Form A's" and shares some of his views on Swiss banking, at "Customer Identification At UBS AG And Some Other Banks".

New Jersey Lawsuit Involving Former Premier Misick Settles

Fred Abrams — Sat, 06 Feb 2010 00:00:01 -0500

The Court announced yesterday that there had been a settlement in the New Jersey case involving Former Premier Michael Misick of the Turks and Caicos Islands. The settlement is mentioned at the Court's Order of Dismissal and by the current docket report.

According to various court filings, the Former Premier could have been a beneficial owner of Hip Hop Weekly Magazine through his alleged interests in: My Way Productions 2 LTD. ("My Way"), Z & M Media LLC ("Z & M"), and the holding company for Hip Hop Weekly Magazine, Hip Hop Global Media, LLC ("HHG"). (Cf. Defendants' Answer, Counterclaim and Third-Party Complaint at p. 26 ¶ 7) (claim that the Former Premier and his ex-wife LisaRaye McCoy were "real parties in interest").

The Verified Amended Complaint in the New Jersey case meanwhile, indicated at ¶¶7, 57, 75, 78, 80 and Exhibit "H", that My Way or Z & M or HHG, might have been involved in making substantial capital contributions:

$798, 647. 57 capital contribution from My Way into Z & M;
$10,000.00 capital contribution from My Way into HHG;
$833,334.00 capital contribution from My Way into HHG and Z & M;
$260,000.00 capital contribution from Z & M to fund Hip Hop Weekly Magazine.

Given the facts that Mr. Misick was the the focus of a public corruption probe, (and also has an apparent nexus to Hip Hop Weekly Magazine, My Way, Z & M, and HHG), governmental authorities would presumably ask: Were the supposed capital contributions listed above, possibly derived from the alleged proceeds of Mr. Misick's suspected public corruption scheme?

If monies, stock shares or other assets are constituted or derived from a public corruption scheme, then the same could of course be subject to asset forfeiture pursuant to the laws cited at "Could Former Premier Misick Face U.S. Forced Collection Proceedings?".

Asset forfeiture was a component of U.S.A. v. Jefferson, Criminal No. 1:07-cr-00209. In Jefferson, a former U.S. congressman's assets were subject to forfeiture because they were derived from a public corruption / bribery scheme. As explained at the August 11, 2009 "Asset Search News Roundup", the Jefferson jury found that the former congressman's monies in two bank accounts, were subject to forfeiture.

The former congressman's stock shares in a Nigerian company, a Ghanaian company, a Delaware company, and an Indiana company, could too be forfeited, as demonstrated by the jury's Special Verdict Form:

(Click On The Special Verdict Form To Read Its Entire Contents)

(Last edited 2:25 PM)

Customer Identification At UBS AG And Some Other Banks

Fred Abrams — Tue, 02 Feb 2010 10:00:01 -0500

By using customer identification or "know your customer" rules, banks try to prevent money laundering and other financial frauds. This use of customer identification rules by banks is contemplated at the Fifth Recommendation of the Financial Action Task Force. The Fifth Recommendation urges banks to diligently verify a customer's identity and to record the true beneficial ownership of bank accounts.

As reported at "Fighting Financial Fraud At UK Banks", the UK changed its banks' "know your customer" rules on December 15, 2007, by codifying them at Money Laundering Regulations 2007*. U.S. banks too verify customer identities, but do so pursuant to 31 C.F.R Part 103.121. Lawsuits alleging that two U.S. banks had failed to sufficiently identify their bank customers, are respectively described at: "Associated Bank Sued For Supposedly Ignoring Red Flags" and "Lawsuit Claims Wachovia Bank Facilitated Alleged Ponzi Scheme".

UBS AG and other Swiss banks also require customer identification at the time a bank account is opened. The customers of Swiss banks execute a declaration of beneficial ownership, commonly referred to as a "Form A". A July 13, 2001 "Form A" was used in the U.S. tax fraud case brought against Florida yacht broker Robert Moran. According to the Plea Agreement in Mr. Moran's case, the July 13th "Form A" helped demonstrate that Mr. Moran had violated 26 U.S.C. § 7206 (1), (perjury on a return / false statements).

A comparison between Mr. Moran's individual tax returns for the years 2001 through 2007 and his "Form A", revealed that Mr. Moran had maintained secret Swiss bank accounts at UBS AG. These Swiss accounts were kept in the name of the Panamanian corporation Winter Drive Investments S.A. (Page 2, Statement of Facts, attached to Plea Agreement).

The legal memo reproduced below discusses the required use of "Form A's" at Swiss banks. It was supplied by Swiss counsel who is a doctor of laws from Zurich University, has practiced in Zurich, New York & Hong Kong and was a visiting scholar at Yale Law School. The legal memo shows how a bank customer falsifying beneficial ownership in a "Form A", could violate Swiss criminal law:

(To Read The Entire Legal Memo, Click On It Above)

Swiss counsel additionally made the following critical comments which relate to the memo and give a glimpse of the current legal climate in Switzerland:

"1) Due in part to the current upheavals concerning the activities of major Swiss banks in the US, the law on financial regulation in Switzerland is somewhat uncertain. Though this is against Swiss legal tradition, the anti-money laundering rules in Switzerland follow what I believe is international practice in deliberately using a degree if vagueness about the exact standards to be applied so as to induce a "chilling effect". This uncertainty is rendered more acute by the difficulty of assessing the interaction between the laws of various nations.

Note also that the rules and regulations have created a web of disclosures and of duties to investigate. It will be a brave person who in search of fiscal relief will navigate through this web without fear of having to make any misleading or materially wrong declaration (thus doing more than mere non-disclosure).

One practical result of the current problems with the US is that banks and Financial Intermediaries in Switzerland (and elsewhere in Europe) have simply stopped dealing with US nationals or US residents (except possibly through US based "on shore subsidiaries" of foreign banks), to the extent of closing long standing business relationships even in the absence of any specific allegation of wrongdoing, fiscal or otherwise. Thus while the law may not have changed, the climate in which the law operates has.

2) In step with this development, the required standard of care expected of a Financial Intermediary (including a bank) is much higher and increasing continuously. Today quite sophisticated profiling and automatic monitoring of all transactions is routine. The effect of this is the same as mentioned above, the law has not fundamentally changed but the loopholes have become very small in practice. Mere "non disclosure" is only effective if nobody asks. Note also that current practice requires on-ongoing checks, not merely checks at the opening of the account bur also during its operation. "

*Money Laundering Regulations 2007, is reproduced under the terms of Crown Copyright Policy Guidance issued by HMSO.

Asset Search News Roundup: January 29, 2010

Fred Abrams — Fri, 29 Jan 2010 00:00:01 -0500

The January 29th "Asset Search News Roundup" talks about HealthSouth's ex-chief Richard Scrushy and includes the most recent remarks of Assistant Secretary For Terrorist Financing David Cohen:

"HealthSouth Founder Scrushy Is Acquitted of Fraud" explained that Mr. Scrushy was acquitted in June of securities fraud and other criminal law violations. Mr. Scrushy was however, sentenced to prison in his separate bribery case. HealthSouth shareholders were also awarded a $2.8 billion dollar judgment against Mr. Scrushy. Some of the litigation by these shareholders / post-judgment creditors, is outlined at: "The Richard Scrushy asset search resumes".
My post "Transnationally Tracking The Assets Of Terrorists", briefly referred to the funding of Al Qaeda terrorists. Assistant Secretary For Terrorist Financing David Cohen just shared his thoughts about Al Qaeda, with the Council on Foreign Relations. To read the Assistant Secretary's remarks, click on the following image:

Remarks Courtesy of U.S. Department of the Treasury.

Lawsuit Claims Wachovia Bank Facilitated Alleged Ponzi Scheme

Fred Abrams — Mon, 25 Jan 2010 00:00:07 -0500

The securities fraud complaint in Nesbeth v. USMIO, Docket No: 09−cv−62042−WJZ, alleges that Wachovia Bank caused damage to the supposed victims of a Ponzi scheme. This complaint, (referred to hereinafter as "the Florida Complaint"), also asserts claims against: MasterCard Worldwide, Mr. David Smith of Jamaica, Overseas Locket Corporation formed in Jamaica, Former Premier Michael Misick of the Turks and Caicos Islands, etc.

The Florida Complaint alleges that Mr. David Smith had operated a Ponzi scheme which reportedly involved six thousand victims from the Jamaican community and might have caused $220 million in losses. Florida Complaint at ¶¶31, 37 & 38. The suspected illicit proceeds of the scheme may have been used to invest in businesses and possibly pay for: real property, a lavish cruise, valuable watches (i.e. portable valuable commodities), ornamental furniture and exotic automobiles. Florida Complaint at ¶52.

According to the Florida Complaint at ¶49, proceeds from the scheme had additionally been laundered through bank accounts, including one maintained at Wachovia. Like the Wisconsin Complaint earlier provided at "Associated Bank Sued For Supposedly Ignoring Red Flags", the Florida Complaint essentially claims that a bank's anti-money laundering program / Customer Identification Program pursuant to 31 CFR 103.121 ¶ (b) (2) (i), failed.

The Florida Complaint for example, alleges that Wachovia had "engaged in facilitating David Smith's Ponzi scheme by receiving and forwarding monies using the Federal wire transfer system." Florida Complaint at ¶4. Wachovia had also allegedly failed to: "sufficiently verify the identity of customers...in violation of the Bank Secrecy Act and applicable regulations." Florida Complaint at ¶83.

Given all of the foregoing, the Florida Complaint apparently attempts to plead a cognizable claim of negligence per se against Wachovia Bank. The Florida Complaint also claims elsewhere, that the supposed Ponzi scheme included cross-border elements in: the United States; the British Virgin Islands; the Turks and Caicos Islands; Jamaica; etc. The alleged Secretary of State filing below, is one of many exhibits attached to the Florida Complaint.

Click On The Above Images To Enlarge Them

(Edited January 31, 2010)

Asset Search News Roundup: January 21, 2010

Fred Abrams — Thu, 21 Jan 2010 00:00:01 -0500

Former Turks and Caicos premier Michael Misick is the subject of today's "Asset Search News Roundup". The Former Premier is the ex-husband of U.S. actress and model LisaRaye McCoy and his pending New Jersey litigation is discussed at "Target Of Corruption Probe Sues Hip-Hoppers For Supposed Fraud" & "Could Former Premier Misick Face U.S. Forced Collection Proceedings?".

The Former Premier is also a co-defendant in two civil complaints that are related to each other and have been removed from state court to Florida federal court. Paragraphs 50-60 of the first complaint, accuses the Former Premier of possible involvement in a civil RICO scheme. Paragraph 58 of the second complaint, alleges that the Former Premier might not have "implement[ed] appropriate supervisory methodologies" in connection with a supposed securities fraud / Ponzi scheme. To access the two complaints, click on each of the images below:

Financial Fraud Trends For The Year 2010

Fred Abrams — Mon, 18 Jan 2010 12:33:44 -0500

Governmental authorities sometimes use data mining and money laundering typologies to detect financial fraud trends. An earlier financial fraud trend we will undoubtedly see in 2010, is beneficial owners hiding assets through nominee bank accounts. Another likely continuing trend for 2010, is the use of Delaware-based shell companies to facilitate money laundering in some cases.

Financial investigators around the world know that beneficial owners may try to hide their assets by using relatives, money managers, etc. as bank signatories on nominee bank accounts. Beneficial owners may even use a "nominee incorporation service" to supply a bank signatory in order to circumvent customer identification rules at banks. At "Fighting Financial Fraud At UK Banks", I mentioned this form of bank account abuse.

Shell companies which lack transparency and are based in Delaware, could also play significant roles in some financial frauds carried out in 2010. As "Domestic Shell Companies & An Asset Search" indicated, Delaware-based shell companies can particularly pose a money laundering risk. My article "Following The Money Trail From Poland To Delaware", provided the details of three different financial fraud investigations which focused on possible shell companies in Delaware.

Asset Search News Roundup: January 15, 2010

Fred Abrams — Fri, 15 Jan 2010 10:00:36 -0500

The Association of Certified Anti-Money Laundering Specialists is a private sector anti-money laundering credentialing organization and Colby Adams is a reporter affiliated with it. Mr. Adams telephoned me this week to discuss my thoughts about abusive offshore tax avoidance schemes and The "John Doe" Summons Case, which was settled with UBS AG.

My comments on The "John Doe" Summons Case have just been published by MoneyLaundering.com / ComplianceAdvantage.com, as part of Mr. Adams' article, "Nearly a Year into Bank Secrecy Crack Down, Little Progress Seen":

(Click On The Image Below, To Read Mr. Adams' Article)*

Transnationally Tracking The Assets Of Terrorists

Fred Abrams — Wed, 13 Jan 2010 00:00:01 -0500

The January 6th article "Three in al Qaeda drug case plead not guilty in NY" discussed suspected terrorist financing by some West African men. According to a December 18, 2009 press release, the criminal case against these men involved the alleged transnational funding of Al Qaeda terrorists through narco-trafficking.

"Terrorist Financing, Money Laundering & Financial Intelligence Units" referred to another case of suspected terrorist funding. It mentioned the Egmont Group's money laundering typology case numbered 06063:

(Above Case# 06063: Courtesy of The Egmont Group)

Typology "06063" gives a glimpse of how financial investigators transnationally tracked assets concealed by two Northern Africans. These Northern Africans had possibly transferred terrorist funds and were suspected of being in "a terrorist organization involved in the attacks of 11 September 2001".

Attorney and former Israeli Army Captain Richard Horowitz, practices in the areas of anti-money laundering, counter-terrorist financing, etc. He too recently discussed the problem of terrorism while attending an October 2009 seminar co-sponsored in Malaga, Spain, by The Council of Europe and other groups. Mr. Horowitz was the only American who attended the seminar and one of the nine seminar panelists. His remarks from the seminar can be read here.

Asset Search News Roundup: January 9, 2010

Fred Abrams — Sat, 09 Jan 2010 15:43:30 -0500

The January 9th "Asset Search News Roundup" provides an update on a couple of matters from Minnesota:

Both "Money Laundering By Minneapolis Managers?" and "Associated Bank Sued For Supposedly Ignoring Red Flags" described pending civil complaints against suspected securities fraudsters Trevor Cook, Patrick Kiley and their companies. Another complaint filed against them was commenced on November 23, 2009, in Minnesota by the U.S. Commodity Futures Trading Commission. Click here, to view the November 23rd complaint.
My October 20, 2009, article "Has Auto Magnate Dennis Hecker Hidden His Assets?" discussed Mr. Hecker's bankruptcy and divorce proceedings in Minnesota. On January 6, 2010 "Judge's patience with Hecker runs out", reported that Mr. Hecker had delayed discovery sought by bankruptcy creditor Chrysler Financial.

The delay was apparently caused by Mr. Hecker's claim that he was somehow entitled to Fifth Amendment protection against self-incrimination, in his civil bankruptcy case. As "Judge to Hecker: Repay or go to jail" stated, Mr. Hecker also reportedly "looted" $125,000 which was the subject of his now finalized Hennepin County divorce proceeding.