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Law
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Essay
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Topic:
Asset Tracing and Recovery
Essay Instructions:
please use attached lesson notes
Asset Tracing and Recovery
The background
Mr. Allen is the sole proprietor of Triple A Solutions Inc. This is a federally registered information technology company.
In January 2007, Mr. Allen offered shares in Triple A Solutions Inc. to private investors at $1.00 per share. Mr. Allen informed the investors that he was going to take the company public in 2008 and the Initial Public Offering would be from 5 dollars to 8 dollars per share. The maximum number of shares to be issued was one million. He gave potential investors a glossy brochure that included a very optimistic projected statement of revenue from an accounting firm in Nevada. By December 31, 2007, Mr. Allen had sold 750,000 shares to 60 different investors. All investors received e-mail confirmations.
On January 15, 2008, Mr. Allen announced to the investors that the company would not be going public as anticipated since he had been approached regarding a merger with another company. He told investors that should the merger proceed, Triple A shares would double in value. He offered to buy back the shareholders original investment. Some of the investors indicated that they wanted to sell. Mr. Allen issued cheques to the investors – the cheques were returned as non-sufficient funds (NSF). Upset, the investors went to Mr. Allen and received other cheques written on another account, which was also returned NSF. Mr. Allen claimed a bank error but no funds were ever paid to the investors.
Mr. Allen frequently updated his investors with good news of additional companies interested in merging with Triple A Inc. because of its advanced technology. Mr. Allen also advised the investors that he had offshore accounts that were holding their investment.
By July 2, 2008 when no payments had been received, the investors had a meeting to discuss the situation. During the meeting, they discussed legal action against Mr. Allen and his company. Some investors believed that there was a strong likelihood that they were going to profit from their shares and that any police or legal actions would jeopardize their payout. Others said that they knew that Mr. Allen had one house in Oakville, one in Montreal and one in Ottawa and were certain that he had assets to cover the investment.
Triple A Solutions Inc. (651436 Canada Limited) has a commercial business chequing account at CIBC Main Branch Commerce Court 00002-8714312
The account was opened on September 22, 2006, has a business chequing account by Mr. Allen as the sole account holder. Lager cheque deposit were made, with indication that the money in the account was electronically wired to the Barclay Bank account number 5643 629179 in the Cayman Islands.
The balance in the account today is $3,451.38.
Triple A Solutions Inc. (651436 Canada Limited) has a commercial business chequing account at CIBC Main Branch Commerce Court 00002-8689415
The account was opened on January 17, 2006, as a business chequing account by Mr. A as the sole account holder. Large cheque deposit were made, with indication that the money in the account was electronically wired to the Lloyd's Bank account number 6541 3672017 in Costa Rica
The balance in the account today is $245.38
Assets
1.2008 BMW Mini Cooper S
2.On January 21, 2008 Mr. Allen purchased black 2008 BMW Mini Cooper S – John Cooper Works Edition package from Budds BMW at 3467 North Service Road in Oakville. The price of the vehicle was $48,1036 was paid with a bank draft from CIBC Main Branch Commerce Court 00002-8689415
3.A sail boat docked at the Boulevard Club on the Lakeshore in Toronto. On June 5, 2008 Mr. Allen purchased a 2004 35 Catalina sailboat from Leisure Marine –34516 Pleasure Lane in Tampa Florida for $125,900 US. The vessel was sailed from Florida and docked at the Boulevard Club in Toronto.
4.Extensive wardrobe from Harry Rosen (Armani suits). CIBC Visa Gold reveals that Mr. Allen purchased 3 suits from Harry Rosen for a total of $17,965 on November 15, 2008 and a black tuxedo for $6,789.78. Information from employees suggest that the suits and tuxedo are for his upcoming wedding on May 20, 2009
5.Two Rolex Watches. The watches were purchased on April 6, 2007 from the Precious Time Store in the Eaton Center
1.40 mm Submariner in 18 kt yellow gold with ceramic bezel - $125,000
2.40 mm Daytona in 18 kt everose gold - $85,000
The written assignment
In April 2009, you were asked to examine this matter. To demonstrate and apply your understanding of the relevant laws, principles and practices of forensic investigation, outline an investigation plan for this case. Be sure to identify the relevant considerations as you describe your investigative methodology. Divide your response into three parts: the plan outline, a detailed investigative methodology, and list of relevant legal and procedural considerations that underlie your methodology.
Evaluation
-10 marks for creating a clear, complete plan outline.
-7 marks for explaining the investigative methodology persuasively
-7 marks for listing the relevant legal and procedural considerations that relate to the methodology
-6 marks for presentation—clear layout and no mechanical errors.
Essay Sample Content Preview:
Asset Tracing and Recovery
Student:
Professor:
Course title:
Date:
Asset Tracing and Recovery
Money laundering refers to the intention to convert or conceal property, believing or knowing that the proceeds or property were derived or obtained indirectly or directly from, or as the result of a designated offense (Woods, 2008). Typically, the main feature of money laundering law is to provide the law enforcement officials and the courts the authority to confiscate from an offender the assets which were obtained as a result of criminal activity. The magnitude and widespread nature of money laundering is a major concern in the world today for both governments and the financial services regulators, and this led to the establishment of global organizations, such as the Financial Action Task Force (FATF) specifically to deal with the crisis (Boucher, 2013). The purpose of this paper is to outline an investigation plan for the case of money laundering involving Mr. Allen of Triple A Solutions Inc. The paper discusses a detailed investigative methodology and appropriate procedural and legal considerations underlying the methodology.
Part 1
Laundering of money typically conceals the source of the money and allows the criminal to enjoy profits of the criminal activity. Proceeds obtained from criminal activities are legitimized. In this case for instance, after selling 750, 000 shares to 60 different investors, Mr. Allen transferred the proceeds to his offshore accounts in Cayman Islands and Cost Rica. He then spent part of that money in purchasing luxurious and expensive products for himself including gold watches, a BMW Mini Cooper car, and tuxedo among other costly items. Money laundering facilitates the continuation of the activity in accumulating more assets (Turner, 2011). The relaxation of border controls and decrease in international trade barriers in the past decade have to a great extent, served to encourage free market enterprise. Conversely, some nations use this international open market philosophy to allow the registration of fictitious businesses that play a major role in money laundering. As funds service businesses, brokerage houses and financial institutions form associations among global entities to offer international services, and efforts to regulate and monitor activities can at times fail to be successful.
Modern technology has facilitated financial services to operate worldwide. Immediate international electronic money transfer makes the laundering of money easier as legitimate companies provide a lawful mechanism to transfer illegally derived funds (Naim, 2006). Such a case involves Triple A Solutions, a federally registered information technology (IT) company whose sole proprietor is Mr. Allen. Investigating this case with the primary aim of tracing and recovering misappropriated financial assets or laundered money will entail the following: (i) Determining where the stolen/laundered money been hidden or how it has been spent, (ii) Taking legal action against Mr. Allen based on the evidence gathered that he indeed has laundered the investors’ money, and (iii) Restraining and seizing/forfeiting the assets in order to recover and protect investors from loss (Truman & Reuter, 2004).
Part 2
Mr. Allen apparently engaged in money laundering when he transferred large sums of money belonging to investors of his company to his offshore accounts. He used some of the money to purchase luxurious items for himself. Typically, the purpose of those who launder money is to place the money obtained from an unlawful activity into the economy in a way that would not rouse suspicion and to reduce the risk of being detected. Using a series of steps executed carefully, illegally derived money cannot be traced or linked back to the criminal activity by which they were generated (Naim, 2006). The following money laundering cycle is evidenced from the money laundering activity that Mr. Allen engaged in: Placements – This is the first stage of the money laundering cycle and involves putting unlawfully derived money into the financial system. Mr. Allen is the only account holder of his company’s account at CIBC Main Branch Commerce Court 00002-8714312. Substantial cheque deposits were made indicating that the funds in the account was wired electronically to the Barclay Bank account in the Cayman Islands with account number 5643 629179, and the current balance is less than $3,500. In addition, Mr. Allen also has a commercial business chequing account at CIBC Main Branch Commerce Court 00002-8689415, and there was a substantial cheque deposit indicating that funds in the account was wired electronically to the Lloyd’s Bank in Costa Rica with account number 6541 3672017. These transactions involving electronic money transfers to foreign bank accounts lucidly show that the illegally obtained funds was put into the financial system by delivering the funds into a different jurisdiction, and entering it into the financial system from there (Naim, 2006).
The second stage in this money laundering activity is layering. This is where the funds move through several financial transactions with the primary aim of distancing the money from the criminal origin. Every transaction provides complexities or another layer of difficulty with regard to tracing the source of those funds. The last stage of money laundering evidenced in this case is integration, and this is where the money attains the appearance of being legitimate. After being integrated into the mainstream economy, it can then be utilized in making investments, purchases, or simply to sustain a desired lifestyle (Baldwin & Munro, 2007). This phase of money laundering comes out clear with regard to Mr. Allen and his activities. In this case, upon integrating the illegally derived funds into the mainstream economy, he used it in making purchases. The notable purchases include the following costly items: a BMW Mini Cooper S bought on January 2008 that cost $48,103.6. It was paid using a bank draft from CIBC Main Branch Commerce Court. Another item is a $125,900 worth Catalina sailboat purchased on June 2008. There was also an extensive Harry Rosen wardrobe. On November 2008, he bought three suits from Harry Rosen whose cost total $17,965, and a $6,789.78 black tuxedo. In addition, he purchased two Rolex gold watches for a total of $210, 000.
In this case civil forfeiture will come into play, which is an in rem action brought against the asset or property itsel...
Student:
Professor:
Course title:
Date:
Asset Tracing and Recovery
Money laundering refers to the intention to convert or conceal property, believing or knowing that the proceeds or property were derived or obtained indirectly or directly from, or as the result of a designated offense (Woods, 2008). Typically, the main feature of money laundering law is to provide the law enforcement officials and the courts the authority to confiscate from an offender the assets which were obtained as a result of criminal activity. The magnitude and widespread nature of money laundering is a major concern in the world today for both governments and the financial services regulators, and this led to the establishment of global organizations, such as the Financial Action Task Force (FATF) specifically to deal with the crisis (Boucher, 2013). The purpose of this paper is to outline an investigation plan for the case of money laundering involving Mr. Allen of Triple A Solutions Inc. The paper discusses a detailed investigative methodology and appropriate procedural and legal considerations underlying the methodology.
Part 1
Laundering of money typically conceals the source of the money and allows the criminal to enjoy profits of the criminal activity. Proceeds obtained from criminal activities are legitimized. In this case for instance, after selling 750, 000 shares to 60 different investors, Mr. Allen transferred the proceeds to his offshore accounts in Cayman Islands and Cost Rica. He then spent part of that money in purchasing luxurious and expensive products for himself including gold watches, a BMW Mini Cooper car, and tuxedo among other costly items. Money laundering facilitates the continuation of the activity in accumulating more assets (Turner, 2011). The relaxation of border controls and decrease in international trade barriers in the past decade have to a great extent, served to encourage free market enterprise. Conversely, some nations use this international open market philosophy to allow the registration of fictitious businesses that play a major role in money laundering. As funds service businesses, brokerage houses and financial institutions form associations among global entities to offer international services, and efforts to regulate and monitor activities can at times fail to be successful.
Modern technology has facilitated financial services to operate worldwide. Immediate international electronic money transfer makes the laundering of money easier as legitimate companies provide a lawful mechanism to transfer illegally derived funds (Naim, 2006). Such a case involves Triple A Solutions, a federally registered information technology (IT) company whose sole proprietor is Mr. Allen. Investigating this case with the primary aim of tracing and recovering misappropriated financial assets or laundered money will entail the following: (i) Determining where the stolen/laundered money been hidden or how it has been spent, (ii) Taking legal action against Mr. Allen based on the evidence gathered that he indeed has laundered the investors’ money, and (iii) Restraining and seizing/forfeiting the assets in order to recover and protect investors from loss (Truman & Reuter, 2004).
Part 2
Mr. Allen apparently engaged in money laundering when he transferred large sums of money belonging to investors of his company to his offshore accounts. He used some of the money to purchase luxurious items for himself. Typically, the purpose of those who launder money is to place the money obtained from an unlawful activity into the economy in a way that would not rouse suspicion and to reduce the risk of being detected. Using a series of steps executed carefully, illegally derived money cannot be traced or linked back to the criminal activity by which they were generated (Naim, 2006). The following money laundering cycle is evidenced from the money laundering activity that Mr. Allen engaged in: Placements – This is the first stage of the money laundering cycle and involves putting unlawfully derived money into the financial system. Mr. Allen is the only account holder of his company’s account at CIBC Main Branch Commerce Court 00002-8714312. Substantial cheque deposits were made indicating that the funds in the account was wired electronically to the Barclay Bank account in the Cayman Islands with account number 5643 629179, and the current balance is less than $3,500. In addition, Mr. Allen also has a commercial business chequing account at CIBC Main Branch Commerce Court 00002-8689415, and there was a substantial cheque deposit indicating that funds in the account was wired electronically to the Lloyd’s Bank in Costa Rica with account number 6541 3672017. These transactions involving electronic money transfers to foreign bank accounts lucidly show that the illegally obtained funds was put into the financial system by delivering the funds into a different jurisdiction, and entering it into the financial system from there (Naim, 2006).
The second stage in this money laundering activity is layering. This is where the funds move through several financial transactions with the primary aim of distancing the money from the criminal origin. Every transaction provides complexities or another layer of difficulty with regard to tracing the source of those funds. The last stage of money laundering evidenced in this case is integration, and this is where the money attains the appearance of being legitimate. After being integrated into the mainstream economy, it can then be utilized in making investments, purchases, or simply to sustain a desired lifestyle (Baldwin & Munro, 2007). This phase of money laundering comes out clear with regard to Mr. Allen and his activities. In this case, upon integrating the illegally derived funds into the mainstream economy, he used it in making purchases. The notable purchases include the following costly items: a BMW Mini Cooper S bought on January 2008 that cost $48,103.6. It was paid using a bank draft from CIBC Main Branch Commerce Court. Another item is a $125,900 worth Catalina sailboat purchased on June 2008. There was also an extensive Harry Rosen wardrobe. On November 2008, he bought three suits from Harry Rosen whose cost total $17,965, and a $6,789.78 black tuxedo. In addition, he purchased two Rolex gold watches for a total of $210, 000.
In this case civil forfeiture will come into play, which is an in rem action brought against the asset or property itsel...
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