Tracking the Global Criminal
by Edmund J. Pankau

Catching today's sophisticated white collar criminal is like peeling an onion, going through layers and layers of business entities, paper trails and false identities, ring by ring, coming ever closer to the core of the crime.

If you have read any of the recent stories about Marty Frankel, a one time stockbroker and current white collar con poster boy, you would see that he fits the perfect profile of this kind of criminal. Marty conducted business in many false identities, and to improve on his chances of disguising his activities, hid behind numerous corporate shell businesses and trusts so that gullible investors like trust and insurance companies would give him millions of their dollars to invest.

Once investors started to question the bounced checks, unpaid dividends and cooked books, Marty fled out of his three million dollar home and his expensive toys and flew to Europe to play the game of hide and seek. On the way, just to have pocket money, he bought ten million dollars in diamonds and a few gold bars to have pocket money, just in case.

Not too many years ago, Marty may have gotten away with his millions, but today's computer technology and on line databases provided instant access to information around the world and pinpointed every move Marty made. The FBI quickly identified Marty's parents, business associates and investors as well as the many girlfriends drawn to his money like bees to honey.

By following up on leads to his European business associates and flight plans filed on his chartered jet, federal agents targeted Marty's activities in Rome and trailed him to Germany where he was arrested and charged with money laundering and fraud.

To have even a hope of getting away, the modern white collar criminal has to make complex plans to "muddy the waters" to attempt to hide his financial trail, through a web of complex maneuvers designed to disguise his true identity, intent and the ultimate destination of his new found wealth.

When conducting an investigation into the activities, business dealings and assets of a person doing business in foreign countries or hiding assets outside the United States, an investigator must gather pertinent information from a variety of sources and seek to piece together the web created by his target.

To conduct a successful foreign asset investigation, the prudent attorney or investigator must document any evidence of the following facts or issues: · Document the foreign travel of the subject to a specific country · Determine the subject's business and financial activities in the foreign country · Discover the location of bank and brokerage accounts and the subject's business relationships to that country · Locate and interview the parties having access to such information

A number of resources are available to help investigators determine if an individual has traveled to or through a foreign country. The most widely known, available to state and federal police agencies, is a database developed and maintained by US Customs Service, now known as TECS (Treasury Enforcement Computer Service. This database, formerly designated as EPIC (El Paso Information Center) records the reentry of each person into the United States from a foreign port using the information that each individual fills out on a US Customs form that documents the reentry point and goods purchased and declared. This database is commonly used to document the frequent foreign travel of parties believed to be involved in drug smuggling, money laundering or other types of crimes investigated by the Customs Service.

The information in TECS is reported to the Financial Crimes Enforcement Network (FinCEN) in Washington, DC. FinCEN then provides the information to law enforcement and regulatory agencies interested in determining the travel history and activity of parties under examination by State and Federal Agencies investigating drug, financial, regulatory or organized crime matters.

On an international level, INTERPOL has the ability to locate and document foreign travel between most countries and will often visit the offices of the International Air Transport Association (IATA) to review their records that document airline travel on the international level.

A thorough investigation can disclose a number of other methods to determine if a person has traveled to a foreign country. Some of these methods most often found to be successful include the following approaches:

When a suspect is arrested for any reason, a thorough physical search should be conducted to determine if the subject of investigation (or their traveling companion) is carrying a passport or documents indicating foreign travel or business activities. If such records are found, an investigator should copy the pages recording foreign passport stamps and visas. The investigator should also look for hotel receipts and amenity packages as well as matchbooks that identify the locations that the suspect stayed at while visiting these countries.

One of the easiest ways to determine the foreign business activities of an individual is to examine his or her business, personal and mobile telephone records to identify countries, cities and parties called. These records will often lead to a bank, attorney, business agent or broker that the subject has contacted to set up a business or financial relationship in a foreign country and may lead to a bank account, safe deposit box or assets that would otherwise never show up in their name or control.

In either a criminal or civil court case, telephone records can be subpoenaed by the prosecutor or plaintiff attorney's to establish and document the telephone toll record of the person being investigated and to establish relationships with other individuals who might not be contacting them in any other way.

An individual's credit card statements are another valuable source of information for determining foreign travel locations and expenditures. These records often reveal a detailed account of airline tickets, hotel accommodations, cash withdrawals and purchases made by the subject in the foreign country. These records may also detail the time line of the target's foreign travel and place them in a location at a time important to your case.

In one case, investigators traced an economic ministry attaché from Colombia, a man suspected of embezzling $12 million, by tracking his American Express charges from Colombia to the United States and then to Israel and Austria. Working with the credit card security department, credit card investigators were able to document the daily financial business and travel activities of the attaché and track his movement through hotel reservations and restaurant charges made to his American Express account. This information provided a detailed history of the attaché's activities during the period of time crucial to the investigation and helped place the attaché in locations where bank accounts were located.

While checking the record of bank transactions, you or your investigator should also look for information concerning the purchase of traveler's checks, money orders, wire transfers or overnight packages. (Oh, you didn't know that the messenger services can track your delivery history for six months to a year, incoming and outgoing just from the bar code on your packages) With this information the astute investigator can determine where checks, money orders or traveler's checks were cashed, which well may be the same location or bank where the subject opened an account. (you can't cash a check today, unless you already have an account in that bank)

The ultimate destination of wire transfers, telexes or overnight packages may also be the financial institution, attorney or agent with whom the subject set up foreign business activities and accounts, or may even be the mail drop of the offshore enterprise.

If you are unable to locate foreign accounts by following the money, the next step is to locate people who know the subject's personal and business activities, including enemies, friends and former employees. If someone likes you, they may tell three or four people. If they hate you, they will tell EVERYBODY). For instance, an executive's travel plans are usually made through a secretary and travel agent. Both of these sources may be able to contribute reliable information to an investigator who looks for them or an attorney who subpoenas these witnesses and their records. Another possible resource is a traveling companion (a la Marty Franklin) who accompanied our target on a little vacation or trip, particularly when the destination is Bermuda, the Bahamas, the Cayman Islands, Belize or another similar tropical financial paradise that asks no questions and tells no FBI's.

In one case, a secretary informed investigators that her former employer was hiding money overseas by sending it out of the country with his attorney. The secretary gave specific details of the dates and times of the foreign travel, and the information was transmitted to US Customs, who cheerfully saw that the attorney was arrested when he attempted to leave the United States without declaring to customs that he was carrying cash in excess of $10,000, as required by law.

Once the attorney was searched and the money confiscated, he realized he had a choice: he could either state that the money was his own and face income tax evasion charges from unreported income or admit that he was acting as an agent for another party and face the lesser transporting charge. This transportation charge would probably be dismissed if he cooperated in the bigger case against his client (it's the IRS godfather offer, the one you shouldn't refuse). Which do you think that he chose?

Finding the target's former secretary or personal assistant is also crucial to the financial and business aspects of the case, particularly on the issue of the intent of the parties. The secretary is most likely the person who notarized the subject's business documents, filed his papers and contacted his clients. To find this little gem, look at other financial documents executed by the subject (to find her name or initials on letters) and then call the state notary board to determine the current registered address and bonding agent of the secretary or notary who worked for your target.

Since they are usually responsible for filing, recording and notarizing company records, corporate secretaries often know of and feel responsible for improper, immoral and illegal activities conducted by their employers. Sometimes these employees even seek to protect themselves from future litigation by keeping personal diaries or retaining copies of documents they think may compromise their position if their employer's scheme is discovered, and THEY are visited one dark night by Uncle Sam. (Remember that old line, "I'm from the Government and I'm here to HELP you"?).

Since a secretary often signs checks for her or his employer, they can therefore be held liable for the illegal activities perpetrated through the use of those checks, (according to IRS and tax court decisions). Any smart secretary feels either a natural hesitancy to sign such documents or, when forced to do so, keeps their own records of the circumstances surrounding the events to protect themselves in case of future problems.

In the course of conducting an offshore investigation, investigators should question the target's secretary or personal assistant and determine if he or she has the following items or information:

· A personal diary that details the employer's travel and business activities · A personal Rolodex of numbers frequently called for the employer · A notary log that records documents that the secretary notarized · Telephone directories the secretary kept to remember the employer's key contacts · Copies of documents made because of the secretary's personal concerns about the employer's ethics or business activities

TO LOCATE A TARGET'S TRAVEL AGENT, first try his or her Rolodex file if it is available. Business people usually have a favorite travel agent and stay with them for years. (Unfortunately, with new internet sites like, many travel agents have bit the dust) If there is a travel agency in or near the office building of your target, give that agency a call to see if your subject or his or her company had an account with them.

If the target did have such an account, the agency should have at least a three-year history of the subject's travel and can tell you exactly where and how often he or she traveled and where they stayed, if the agency also booked the hotel.

If you can't find the travel agent, consider a subpoena for the records of the Airline Reporting Corporation (ARC) in Washington, DC, the clearinghouse for airline tickets of all the major air carriers. ARC compiles and collates all domestic air tickets issued by domestic carriers. The sister organization, the International Air Transport Association (IATA), headquartered in Montreal, collates the records of foreign travel for many of the world's airlines. The records of ARC and IATA can help an investigator determine the name and location of the travel agency used by the subject. The agency can then review where and when the subject traveled.

Many offshore investigations begin with information provided by fired secretaries, spurned spouses, or disgruntled employees who harbor a grudge against the wealth or illegal activities of someone they know or have had some type of relationship with. The records they keep often provide the missing link necessary to prove the existence of foreign banking relationships or hidden business interests and relationships.

Consider this case, for example.

Sheila was the faithful secretary and mistress of one of the nation's largest pornography dealers for more than 12 years. As his confidant and bookkeeper, she traveled with him on Caribbean vacations and accompanied him when he set up several Cayman Island bank accounts, where she observed that he deposited $5 million during the course of her employment.

As she grew older, and lost her physical charms, Sheila's employer became obsessed with younger women. He started bringing younger women into the organization, women who ultimately took over Shelia's relationship with her boss as well as her bookkeeping position. Her boss did not consider Shelia a threat and ultimately fired her from her job.

Forced into the job market and unable to find a well-paying job, Sheila became disillusioned and bitter over her loss of status and position. She became a willing witness when she was approached by an IRS agent investigating tax matters in the pornography business.

Sheila provided oral testimony about the trips to the Cayman Islands and the existence of Cayman Island bank accounts in the pornographer's mother's maiden name. She produced copies of deposits and overnight package receipts documenting deposits made to the Cayman Island accounts set up to hide the money made from pornography and drugs by her former employer. With this evidence, the government agent was able to document no only income tax fraud, but also income from drug dealings, which gave the US attorney sufficient grounds to obtain an indictment and conviction against the pornographer and his business.

As a result of the employers poor employment decisions, Mr. Pornography is now a guest at Club Fed, and will probably be there for an extended vacation.

ONCE AN INDIVIDUAL'S FOREIGN TRAVEL HAS been determined, the next step is to find out where the subject stayed in the foreign country and what type of business activities were conducted there.

One of the best sources for this information is the credit card and travelers check activity of the subject. You see, the ease and convenience of credit cards work to the advantage of the investigator and the disadvantage of the target individual. Because of the ease of their usage, most people who travel overseas charge their air fare and hotel bills on credit cards so they don't have to purchase or exchange foreign currency (just try to buy an airline ticket, rent a car or a hotel without one).

The major credit card companies products are quick and convenient to use because they accept all major currencies, but this efficiency creates a paper trail that documents the target's itinerary and activities. By identifying information about the hotel used by the subject, an investigator can locate, document and examine the hotel's telephone records to find out who the subject contacted during his or her stay, and therefore where they conducted their business.

Examining a customers hotel telephone record helped determine the existence of foreign bank accounts and the names of business agents used by an executive alleged to have transferred millions of dollars from a Texas savings and loan. Through the examination of credit card records, investigators determined the executive stayed at a hotel in Berne, Switzerland, and while at the hotel made telephone calls to two banks, an attorney and a foreign private postal service located in that town.

Through a review of the daily photographs of the people entering the Swiss banks called by the subject ( European banks photograph every person who enters their premises because of the much higher incidence of bank robberies in their countries), investigators were able to document that the executive visited a certain bank on a specific date, and that the subject opened accounts with the proceeds transferred from his savings and loan, into that bank, through a series of financial transactions that ultimately led to the Swiss Bank.

The phone calls made during these hotel visits were crucial in establishing a link between the executive and a Swiss attorney with whom the American businessman did business. The attorney made purchases of real property in the United States for the benefit of the executive, who later claimed he was only the caretaker of these properties, and helped establish a link between the two.

By proving the existence of prior conversations between the executive and the attorney, government regulatory were able to establish an ongoing relationship between the two and give the court reasonable grounds to seize the properties purchased for the executive's benefit in the United States, and prove a conspiracy between the parties.

In addition to examining the credit card statement of individuals traveling abroad, attornies and investigators should look into the purchase of cashiers checks, money orders or traveler's checks, negotiable instruments that are also frequently used to launder money.

Examining such financial instruments may also indicate the location of new bank accounts, the leasing of safety deposit boxes, and the purchase of extravagant gifts. In several cases, investigators have even traced purchases of expensive foreign automobiles through the purchase of traveler's checks bought by the subject in the United States and cashed in Europe at the headquarter of Mercedes Benz.

An important step in an investigation of this type is to determine if the target individuals have traveled overseas personally or if he or she has sent another party, (such as an accountant, attorney, friend, or family member), out of the country with the assets they are attempting to hide.

An accountant representing a number of doctors in a suburban metropolitan area conceived of a scheme to take the unreported income made by his clients to the Cayman Islands where it was deposited in numbered accounts in the doctors' names. For years, the accountant made a trip every month to the Cayman Islands, complete with diving gear and scuba tanks.

In six years, the accountant illegally carried millions of dollars (in scuba tanks) past US Customs and Cayman Islands Immigration each month.

This crime went unreported for years until the accountant's wife filed for divorce and turned her husband in for the reward on an income tax evasion scheme.

The IRS alerted US Customs, which then monitored the flight plans of aircraft traveling to the Cayman Islands during the accountant's normal travel times. On his next flight, the accountant was detained and the scuba tanks inspected. When customs' agents found more than $100,000 inside envelopes inside the tanks, the accountant was charged with carrying more than $10,000 outside the United States without a customs declaration and a criminal charge was made by the IRS relating to unreported income of the monies found.

Facing the two charges, the accountant elected to plead guilty to the lesser charge of transporting money and gate the IRS an affidavit and testimony revealing the identity of the parties who had given him money to deposit in the Cayman Islands.

SOMETIMES THE BEST EVIDENCE IN THE investigation of offshore matters, come from getting down and dirty, that is, bagging the trash. Like everyone else in the world, crooks generate garbage and often there lie pearls within the garbage can. Some of the best evidence is often a hand written note or some personal scribbles made late at night and thrown away in the trash.

This evidence could include such pearls as; envelopes that list a return address from parties having knowledge of the suspect, the addresses of foreign banks, confirmations from overnight packages sent overseas, or bank statements and checks that show the routing numbers and account codes where checks were cashed or funds were transferred through a target's bank to an offshore entity.

Most people throw away notes scribbled in haste while picking up messages from their telephone recorder. By conducting trash pulls on the subject's garbage, particularly at the end of the month, an investigator may find documents that inadvertently lead to key offshore business activities.

Certain days of the year, particularly holidays, are magic moments to any astute investigator. On such days, individuals often call home to family and loved ones or send cards or notes showing their love and affection for their families. These magic moment holidays are as follows:

· VALENTINE'S DAY - Bag someone's trash after Valentine's Day and you may find return address from envelopes received from their mother, lover or special friend. This is also a day to check for receipts for flowers, perfume or candy on the charge card.
· MOTHER'S DAY - Even the most hardened criminals may call their mothers to let them know they are still alive. This is a good day to check the mother's phone bill and find a son or daughter hiding from the law.
· FATHER'S DAY - Not as criminals call home to dad, but it is stall a smart day to check the trash and phone bills when looking for errant sons or daughters that can't be found any other way.
· HALLOWEEN - this is the one night of the year people show their true colors. On Halloween, crazies strut their stuff, acting out their favorite fantasy and letting it all hang out.
· THANKSGIVING - As a time of family gatherings, an investigator should keep a subject's family under surveillance to see if he or she comes home for dinner.
· CHRISTMAS - This is the time to check credit card receipts for purchases. Christmas is also the time when cards and envelopes are found from people who only make contact once a year.

In addition to addresses listed on the mailings, we can often find other treasures on the paperwork, such as fingerprints or DNA samples if they licked the envelopes, all of which helps establish the identity of the parties in the case.

NO ONE SINGLE PATH or MIRACLE method can make every offshore investigation successful. Cases of this type are solved by hitting all of the bases, chasing down every possible lead and finding where the suspect stumbled and left an opening into his or her financial affairs.

The resources discussed here, if diligently pursued, will lead to the discovery of evidence (if it exists) in many of the most complex cases and help show the true intent of the actions of the participating parties.

Each and every investigation teaches investigators new methods used by targets to hide money, avoid and evade the law and the court system. An investigator's job is to catch those mistakes made in haste and put together the puzzle that the subjects so carefully built and then destroyed hoping no one could find and put all the little pieces back together again.