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Financial Forensic Report 12.21.2020

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Table of Contents:

  • “The Fraudulent Flow of Foreign Wealth” Article by Joe Dickerson
  • Kahlua Cake Recipe
  • “The Gold Wrapping Paper” Article
  • Buy “Diagnostic & Prescriptive Judgment Enforcement” Book by International Best Seller Author, Joe H. Dickerson, CFE
  • “What Clients Say” About Financial Forensic Services

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THE FRAUDULENT FLOW OF FOREIGN WEALTH

By: Joe Dickerson, CFE

The United States is known as the land of the free, and this is hardly more apparent than in the freedom with which vast sums of money flow into the country. Foreign wealth has found a comfortable home in the elite real estate of America’s biggest financial center: New York City.

That doesn’t sound so bad until you find out that many of the owners of these luxury Manhattan condos are actually shell corporations. Basically, shell corporations are facilitators of transactions that in and of themselves don’t participate in any significant business operations. They’re popular because they can hide the true identities of the property owners.

Their popularity is growing, as is apparent in one real estate complex in which last year, more than 80 percent of owners were shell companies. And who are the true owners? Often, it’s super-rich foreigners looking to discreetly park ill-gotten money. Corruption, ties to organized crime, regulatory violations, and financial fraud are the ties that bind these foreigners who choose to invest in U.S. real estate. The wealth international elite is taking advantage of the fact that the United States doesn’t really require a lot of vetting before allowing untraceable money through shell companies to purchase high-end real estate on U.S. soil.

Actually finding out who really owns a condo is frequently a Herculean task. It involves a search through business and court records, interviews with any cooperation, people who could be connected to the mysterious owner, examinations of property records, and looking into possible associations with lawyers and relatives.

In fact, because purchasers of real estate can register shell companies in the names of relatives, attorneys, accountants, or groups of investors, it can be practically impossible to nail down with certainty who the owners are. What’s more, ownership in shell companies can shift without notice or indication in property records, so even if you do track down an owner, it’s not always apparent if this is the one you were looking for.

Elite attorneys and real estate agents are less than helpful. As long as a buyer has the money, signs the contract, and pays with no contingency, the deal will close. It’s gotten to the point where total privacy is expected, so contacting attorneys associated with mysterious real estate buyers don’t get much cooperation.

Even more worrisome is the fact that officials are addicted to this influx of capital from outside the country. Foreign investors who want to keep their assets anonymous have been flooding the high-end real estate market. Thinking about it from the perspective of city officials, how easy is it to turn away all that money, even if it a lot is illegally obtained? Calls for greater transparency from shell companies have consistently failed.

One New York luxury real estate development isn’t just opaque metaphorically — it’s also opaque in a literal sense. The complex has dark glass that obscures the people living within, and there’s no indication of the residents’ identities inside or out. The condos are referred to as cryptic numbers like 52B, and reportedly, only about a third of the units are occupied at any given time. Many of the wealthy owners don’t live in the U.S. full time and count these condos as a second or third home.

The reason for the secrecy is rarely good. One buyer had ties to organized crime, while another was under investigation for owning a company that was polluting the environment. In all cases, the foreign rich are increasingly keeping their money tucked away snugly in an expensive piece of real estate that’s largely shielded from public scrutiny through shell corporations.

Ironically, the U.S. government has been trying to crack down on foreign countries that serve as destinations for offshore funds to avoid domestic taxes, but until our own laws start requiring greater transparency in shell corporations and high-end real estate transactions, the United States will continue to be a haven for corrupt, illicit, and fraudulent foreign funds.

Keep an eye out for our Part Two article Jan.4.2021 …


Copyright all rights reserved. Financial Forensic Services, LLC 2020 Brief quotation with attribution permitted.

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THE GOLD WRAPPING PAPER

Once upon a time, there was a man who worked very hard just to keep food on the table for his family. This particular year a few days before Christmas, he punished his little five-year-old daughter after learning that she used up the family’s roll of expensive gold wrapping paper.

As money was tight, he became even more upset when on Christmas Eve he saw that the child had used all of the expensive gold paper to decorate one shoe box she had put under the Christmas tree. He also was concerned about where she had gotten the money to buy what was in the shoe box.

Nevertheless, the next morning the little girl, filled with excitement brought the gift box to her father and said, “This is for you, Daddy!”

As he opened the box, the father was embarrassed by his earlier overreaction, now regretting how he had punished her.

But when he opened the shoe box, he found it was empty and again his anger flared. “Don’t you know, young lady,” he said harshly, “ when you give someone a present, there’s supposed to be something inside the package?”

The little girl looked up at him with sad tears rolling from her eyes and whispered: “Daddy, it’s not empty. I blew kisses into it until it was all full.”

The father was crushed. He fell on his knees and put his arms around his precious little girl. He begged her to forgive him for his unnecessary anger.

An accident took the life of the child only a short time after. It is told that the father kept this little gold box by his bed for all the years of his life. Whenever he was discouraged or faced with difficult problems, he would open the box, take out an imaginary kiss and remember the love of this beautiful child who had put it there.

In a very real sense, each of us has been given an invisible golden box filled with un-conditional love and kisses from our children, family, friends and God. There is no more precious possession anyone could hold.

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Diagnostic & Prescriptive Judgment Enforcement
By: Joe H. Dickerson, CFE

$24.95 + FREE S&H

Please place your book orders by calling
303.974.5610
during normal business hours Mon-Fri 9am-5pm MT.
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Testimonial

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Jim Thomas
, Prosecuting Attorney

2014-11-11T18:21:32+00:00

Jim Thomas
, Prosecuting Attorney

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R. Michael Sentel
, Former Section Chief Legal Division, FDIC

2014-11-11T18:13:08+00:00

R. Michael Sentel
, Former Section Chief Legal Division, FDIC

” I was prepared to dismiss a federal case involving millions of dollars against a local individual who claimed to have no substantial assets. After your staff hit the records and delved into the transactions behind the transactions, you discovered the individual to actually be worth a few million dollars. We continued the case to conclusion. We were also very happy with the financial background examinations you conducted of the former directors of two failed national banks. The heart of any civil case is whether there is a pot at the end of the lawsuit. You were our lucky leprechaun in finding such pots.”

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Michael Whalen, 
Businessman

2014-11-11T18:21:13+00:00

Michael Whalen, 
Businessman

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Tim Gabelhouse
, Attorney at Law

2014-11-11T18:20:41+00:00

Tim Gabelhouse
, Attorney at Law

“As an environmental law firm, we use Joe Dickerson to locate prior business owners and do corporate genealogies. He is persistent, that’s the key to a good investigator, and he has a knack for understanding how people move money and do business. That tells him what rocks to look under. Joe is vastly superior to other investigators in two ways: he lets you know what’s going on and he’s honest with you, because he tells you if there’s really anything there worth pursuing. He is unusually thorough and creative finding people. Joe has earned his fee every time.” “If the information is to be found, then I believe that they will find it. Their service enabled me to do a much better job for my client.”

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Thomas E. Root, 
Attorney

2014-11-11T18:20:05+00:00

Thomas E. Root, 
Attorney

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Frank Brainerd, Retired
Banker/Attorney

2014-11-11T18:20:20+00:00

Frank Brainerd, Retired
Banker/Attorney

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, Attorney at Law

2014-11-11T18:20:55+00:00

Jan Schlichtman
, Attorney at Law

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Andrew Quiat
, Attorney

2014-11-11T18:12:51+00:00

Andrew Quiat
, Attorney

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