| In many investor frauds, stolen money is hidden | | | | agreements with other countries. They had an |
| offshore. Although fraudsters do not think they | | | | open case against him, but did not pursue him for |
| will be caught, they are cautious enough to hide | | | | extradition. |
| their stolen money. In some frauds they invest | | | | Although the investors' funds were traced to the |
| the stolen money in real estate or other | | | | offshore banks, each country's bank secrecy laws |
| investments. Fraudsters have become very adept | | | | prohibited finding out the account information or |
| at this and the recovery has become more | | | | whether the funds had been further disbursed. |
| complicated, although not impossible. | | | | The management company got suspicious and |
| A representative of the investor will try to locate | | | | thought the fraudster may be laundering money, |
| the hidden money. He may be a court appointed | | | | a crime in their country. They notified their local |
| receiver or trustee, law enforcement official, class | | | | constable's office who posted the information on |
| action attorney or an attorney representing one | | | | a worldwide network of law enforcement |
| or more investors. He will hire professionals to | | | | agencies established to identify money laundering. |
| help follow the trail of the money. This is | | | | At that point the parallel investigations of the |
| complicated by the bank secrecy laws of | | | | constable's office, the US law enforcement |
| countries used. | | | | agency and the investors' representative came |
| An example from a real investor fraud was a | | | | together. |
| fraudster who stole over $5 million from US | | | | The fraudster, after finding out his hidden assets |
| investors and transferred it to seven companies. | | | | had been discovered, voluntarily came back to |
| Each company was incorporated in a different | | | | the US, cooperating with the law enforcement |
| country. The companies were owned by a | | | | agency and the investors' representative. All of |
| nominee and were managed by a management | | | | the cash and the three pieces of real estate were |
| company in the Isle of Mann. One of the | | | | recovered. After sale of the real estate, the |
| companies owned a farm in Australia, another a | | | | recovered cash was returned to the investors. |
| compound of houses on Maui and the remaining | | | | The fraudster pled guilty to various violations of |
| five had bank accounts in the country of their | | | | US security fraud, mail fraud and wire fraud laws |
| incorporation. Additionally, a house in Florida was | | | | and is presently serving his sentence in a US |
| purchased for the fraudster's brother to live in, | | | | prison. |
| which was in a trust not associated with the | | | | In this example finding the money and recovering |
| fraudster's name. When the fraudster needed | | | | it were easy because of a responsible |
| funds he simply e-mailed the management | | | | management company in the Isle of Mann. In |
| company to wire the funds to him from the | | | | many investor frauds, the stolen money is never |
| company he chose. | | | | recovered nor are the fraudsters prosecuted. |
| The fraudster disappeared and moved around | | | | Investors often do not realize their investment |
| from country to country having no property, | | | | loss was a fraud or simply are too embarrassed |
| bank accounts, or credit cards in his name. He | | | | to admit it. Investors who have lost all or most of |
| lived at the farm in Australia and the compound in | | | | their investment should report this to their local |
| Maui from time to time. He was married and his | | | | regulatory and law enforcement agencies. These |
| wife accompanied him, but used her maiden name | | | | agencies are trying to rid the investment |
| on all of her identification. Since he did not change | | | | community of fraud and are the first stop in the |
| his identify, a US law enforcement agency found | | | | recovery of investor funds. |
| him through his passport and cooperation | | | | |