Asset Hunting and Anti-Money Laundering: Justice on the Trail of Tears

On March 3, 2009, a group of scorned investors filed suit in the United States District Court for the Southern District of Florida after being burned by a $170 million offshore Ponzi scheme. These investors sued to get their hands on the assets of two Canadian “real estate developers” who used investor funds to finance their lavish lifestyles, purchasing among other things a private plane, a multi-million dollar luxury yacht, and various land holdings around the world. The Defendants, Frederick C. Elliot and his son, Derek, hid the spoils of their criminal exploits throughout Latin America – making the reclaiming of these assets a daunting task for even the most hardened, seasoned asset hunters. Using intricate and creative methods of asset forfeiture – the process of lawfully confiscating assets which are proceeds or instrumentalities of a crime –more than $100 million of illicitly obtained cash and property were subsequently seized, including the Elliots’ 54-foot yacht.

In recent years, the terms “Ponzi Scheme” and “Financial Fraud” have become unfortunate household idioms. Fraudsters such as Bernard Madoff and Allen Stanford have given new meaning to the term “financial fraud,” leaving behind them a trail of tears. This new wave of criminal audacity has prompted both the government and private citizens into action. Victims, many of whom were forced into bankruptcy, have filed suit against either the “plotters” themselves or financial institutions that, neglecting proper fiduciary oversight, have authorized transactions that facilitated these schemes. Asset hunters have teamed up with former FBI, customs, and DEA agents to assist in tracing and recovering assets for these victims. The U.S. government has also instituted significant reforms, including a comprehensive overhaul of its existing asset forfeiture program. The goal – to form a united front against common foes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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