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Financial Forensic Report 12.28.2020

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Table of Contents:

  • “The Fraudulent Flow of Foreign Wealth” Article By Joe Dickerson, CFE
  • Seafood Fondue Recipe
  • “His Name Is John” Article
  • Buy “Diagnostic & Prescriptive Judgment Enforcement” Book By International Best Seller Author, Joe Dickerson, CFE
  • “What Clients Say” About Financial Forensic Services

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THE FRAUDULENT FLOW OF FOREIGN WEALTH – Part 2

By: Joe Dickerson, CFE

Part of the reason our country thrives is because it attracts immense talent and investment from all  over  the  world.  While we naturally want to encourage more of the world’s resources to come to our shores, this effort can go too far. Officials in big shining cities like New York practically beg for foreign investment. In fact, New York offers tax breaks for condominium developments that represent a second or even third residence for ultra-wealthy buyers.
 

As we discussed in Part 1 of this article, the ultra-wealthy tend to use shell companies to purchase and hold ownership in  elite real estate. If you look at the situation closely, you’ll start to see that New York actually courts these types of individuals through favorable tax treatment while turning a blind eye to where the money comes from.
 

It’s true  that  many  wealthy  owners  are  simply  celebrities  or successful professionals like doctors, lawyers, and entrepreneurs, but there are also dozens of ultra-wealthy foreign investors who take full advantage of the lack of oversight in these high-ticket transactions.

One elite building in particular is home to at least 17 billionaires from Forbes’ annual list of the world’s richest people. The tower originally had 26 percent of its sales go to people from other countries, but that number has recently jumped to more than 50 percent. The whole scheme seems designed to help these individuals shield their identities from the public record, to the point where the owners can choose someone else’s name to list for them to get access to their own building. 

Many deeds are now signed by a representative, signed illegibly, or even left blank. The registered phone numbers are under the owners’ lawyers’ names. The tax statements are addressed to their companies rather than to themselves. Even the transaction itself is designed to keep names out f it – because these deals are done in cash, there’s no mortgage statement or other public document to identify the true owner. 

Privacy has become so important in these types of deals that high-end real estate agents and lawyers may actually go through an entire transaction without ever knowing the actual identity of the buyer. This trend toward opacity in high-end real estate deals is already the status quo, with many brokers insisting the commitment to anonymity is the only way to actually get these types of clients. 

Part of the reason for this change is that newer luxury towers are condo developments, rather than cooperative boards where each resident jointly owns the building. In co-op boards, there’s bound to be extreme scrutiny to make sure you don’t let in the wrong person; for condo developments, each resident is wholly responsible for their own unit, so it’s a lot less relevant who your neighbors are. What’s more, the condo board requires residents to chip in and buy a unit if the board rejects a buyer, which creates further incentive for them to let in anyone with the financial capacity to buy.

As much as high-end brokers and city officials love the influx of foreign funds, they may not be so happy to learn where the money comes from in these deals. The New York Times successfully tracked down the elusive owners of some of these shell corporations, and what they found was often pretty horrific.

One owner was accused of using a commercial loan for personal expenditures, and another faced a fraud investigation involving an estimated 30,000 victims whom he profited from. One business magnate based in India moved money into the United States that he earned from industrial activities that harmed more than a hundred indigenous families — not to mention the employees who beat up residents and essentially held them as prisoners.

These stories will continue until something changes. Due to limited transparency and an unquenchable thirst for foreign investment, the United States has cemented its role as a safe haven for ill-earned wealth by shady members of the international ultra-rich community. It’s up to us to decide if we want this to be America’s legacy.

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

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HIS NAME IS JOHN

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.
or email joe@financialforensicservices.comand make an appointment
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Testimonial

“Joe spends the time to understand the problem from the client’s perspective and from the legal perspective. He is intelligent, tenacious, willing to work as hard as it takes, thorough, well-informed, and just awfully good at what he does.”

Thomas E. Root, 
Attorney

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

Thomas E. Root, 
Attorney

“Joe spends the time to understand the problem from the client’s perspective and from the legal perspective. He is intelligent, tenacious, willing to work as hard as it takes, thorough, well-informed, and just awfully good at what he does.”

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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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Jim Thomas
, Prosecuting Attorney

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

Jim Thomas
, Prosecuting Attorney

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Jan Schlichtman
, Attorney at Law

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

Jan Schlichtman
, Attorney at Law

“Joe Dickerson is the industry standard. You can measure the rest by what he does, and I say that without equivocation. Joe has incredible insight into the dark world of fraud. He understands the devious ways in which people perpetrate white-collar crime.”

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Frank Brainerd, Retired
Banker/Attorney

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

Frank Brainerd, Retired
Banker/Attorney

“When I was general counsel for First Interstate Bank, I used Joe Dickerson for locating assets, investigating behavior and asset discovery. He did excellent work and always got the information I needed without compromising the bank in any way. He’s more thorough and kept in better touch with me than other investigators. I’d give him a grade of 96 or 97 out of 100.”

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Andrew Quiat
, Attorney

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

Andrew Quiat
, Attorney

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Businessman

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

Michael Whalen, 
Businessman

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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.”