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Financial Forensic Report 2.16.2021

Financial Transparency in the First State

Transparency has become a buzzword in every sector. But, nowhere is it more persistently pursued than in the financial realm and, today, no state in the Union is in such dire need of a substantial helping of transparency than Delaware. Even the New York Times hailed Delaware as a “Den of Thieves” and for good reason—Delaware is known as a hotbed for tax evasion, underground financing and other felonious acts perpetrated by an abundance of anonymous shell companies. In fact, Delaware, Nevada, and Wyoming, and the US itself, has a growing reputation as a haven for corporations seeking nefarious levels of economic secrecy.

Delaware is currently the incorporation locale for more companies than the state’s living residents. Approximately 64 percent of corporations on the Fortune 500 list and a whopping 50 percent of all United States publicly traded companies trace their incorporation back to the tiny state. It’s a well-thought-out decision for both the institutions themselves and the state, as Delaware has very favorable tax arrangements specifically aimed to draw businesses.

While this has worked wonders for the state’s income (roughly one quarter of which has come from taxes and fees in previous years), the appealing nature of incorporation continues to draw in business of a darker nature. From drug dealers to dictators, anonymous shell companies have taken advantage of Delaware’s friendly legislation to secretly launder illegally obtained funds. Most notoriously in recent memory, former Ukrainian president, Pavel Lazarenko was prosecuted for laundering millions through anonymous companies incorporated in the US, specifically in Delaware and California.

Something obviously needs to change. In response, a coalition of 13 state-based organizations, along with the Americans for Democratic Action, distributed a statement which announced to criminals and corporations alike that Delaware is no longer willing to be a playground for dirty deals. The statement called for the legislature to bolster laws on economic transparency and after it was issued, local lawmakers joined the fight as well, calling on the Delaware Congress to take action.

How the legislature itself will move forward is anybody’s guess. Will the lure of dirty money be too strong a siren call for the state, or will the recent outcry push Delaware to join the growing global movement towards economic transparency? While few things are certain, it looks like the First State’s anonymously corrupt days may be numbered.

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Proposed FinCEN Rule Should Help Track Down Perpetrators of Fraud

Federal Trade Commission staff filed a comment on a Notice of Proposed Rulemaking published by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, in which FinCEN proposed a rule to clarify and strengthen existing customer due diligence requirements for financial institutions under the Bank Secrecy Act. Among other requirements, the proposed Customer Due Diligence Rule would require financial institutions to collect information on the individuals who are the beneficial owners of a legal entity when the entity opens an account.

The comment of the FTC’s Bureau of Consumer Protection and Bureau of Economics notes that the proposed Rule should improve the FTC’s ability to track down those perpetrating fraud against consumers. FTC staff provided examples from FTC enforcement actions in which individuals used legal entities or “shell” companies to disguise their involvement with fraudulent operations and transfer the proceeds of fraud— instances in which information about the individuals behind a legal entity would have helped the FTC’s law enforcement, particularly in its efforts to quickly shut down fraudulent operations.
 The Commission vote to issue the staff comment was 5-0. It was sent to FinCEN Director Jennifer Shasky Calvery. 

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The Future

The story’s told of a clock that spent a great deal of time worrying about it’s future, reasoning that it had to tick twice each second. “How much ticking might that be?” the clock thought. So it began to calculate that it would tick 120 each minute, which is 7,200 times each hour. That meant in a twenty-four hour day it would have to tick 172,800 times, and 63,072,000 times every year. By this time the clock began to get overwhelmed and sweat profusely. Finally, it calculated that in a ten-year period it would have to tick 630,720,000 times – and at that point the clock collapsed with a nervous breakdown. Psychologists reckon that about 95 percent of all we worry about never happens. What about the other 5 percent? Four out of five times things turn out better than we anticipated, including a lot of outright blessings! In the end, only 1 percent of all the bad we think might happen actually does, and of this it’s rarely as bad as we feared. That’s why Jesus said, “Don’t be anxious about tomorrow. God will take of your tomorrow too. Live one day at a time.” The apostle Peter gives us the right perspective to live by in these words: “Casting the whole of your care, all your anxieties, all your worries, all your concerns, once and for all on Him, for He cares for you affectionately and cares about you watchfully.” So the word for you today is – don’t obsess over the future.

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

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Testimonial

“Joe is the most competent investigator I’ve ever found. He has rare ability to find hidden assets. Others claim it, Joe has it. He understands the Rules of Evidence, he knows how to talk to people to develop a fact pattern, and he has a sixth sense for fraud. Joe has unquestioned integrity and delivers value for his services.”

Andrew Quiat
, Attorney

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

Andrew Quiat
, Attorney

“Joe is the most competent investigator I’ve ever found. He has rare ability to find hidden assets. Others claim it, Joe has it. He understands the Rules of Evidence, he knows how to talk to people to develop a fact pattern, and he has a sixth sense for fraud. Joe has unquestioned integrity and delivers value for his services.”

” 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.”

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.”

“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.”

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.”

“They went overboard in providing excellent service. I was very pleased with what they provided for me as their end product. Financial Forensic Services really understands how a case needs to be put together in order to be presented to a jury. Their PowerPoint presentation tied everything together. It was thorough, it was concise, and it got the job done.”

Jim Thomas
, Prosecuting Attorney

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

Jim Thomas
, Prosecuting Attorney

“They went overboard in providing excellent service. I was very pleased with what they provided for me as their end product. Financial Forensic Services really understands how a case needs to be put together in order to be presented to a jury. Their PowerPoint presentation tied everything together. It was thorough, it was concise, and it got the job done.”

“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.”

“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.”

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.”

“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.”

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.”

“Financial Forensic Services did an excellent job in the way they executed my case. They were very straightforward. They stated what they could do for us and they did it. And, from a personal standpoint, they are excellent. Both my wife and I felt very comfortable working with them.”

Michael Whalen, 
Businessman

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

Michael Whalen, 
Businessman

“Financial Forensic Services did an excellent job in the way they executed my case. They were very straightforward. They stated what they could do for us and they did it. And, from a personal standpoint, they are excellent. Both my wife and I felt very comfortable working with them.”