15 ms·

How to Hide $400M

399 points by scarmig 10y ago

eb0la 10y ago
This looks a more readable and entertaining version of this academic journal: http://www.emeraldinsight.com/toc/jmlc/19/1 http://www.emeraldinsight.com/toc/jmlc/19/1 ;-)
sosuke 10y ago
I got stuck part way through. "She packed the laptop and documents, left her suitcase near the front door and went for one last walk on their beach." then a couple of lines later "When she opened her suitcase at the security line, there was no laptop. No paperwork. It was all gone." But then the subject changes, timeline changes and I can't find what ever happened to the laptop.
- rphillips 10y ago
  The article alludes to the fact the caretaker or the older gentleman removed the laptop and documents, or someone else in the employ of the husband.
  - dx034 10y ago
    Was a bit confused by that. The way both of them are described I'd guess that they're not the nicest employers. If your employer is far away, probably doesn't pay you very well, why show such loyalty to prevent that from happening? The husband probably hadn't found out about it otherwise.
- guelo 10y ago
  Search for the paragraph that mentions "Bahamian police". Sounds like someone got bribed.
- jsnell 10y ago
  They return to it later: > That was when — and why — Fisher dispatched Pursglove to the Bahamas: to gather clues about where the money went. When Pursglove returned to the house to confront the caretaker that day, she told me, the caretaker admitted removing the papers from her suitcase. Bahamian police took custody of the papers, but later, and for reasons they never explained, handed them over to Oesterlund. When Fisher tried to subpoena the papers back, Oesterlund’s lawyers said he could not find any such documents; in any case, they wrote, Pursglove had no right to “stolen” materials.
sean_patel 10y ago
> In any given year, trillions of dollars sit safely in the offshore financial world, effectively stateless, protected by legions of well-compensated defenders and a tangle of laws deliberately designed to impede creditors and tax collectors. This. I always worry that if/when I get married -- in California where the Divorce laws are heavily in favor of the woman -- that I will be middle-aged, penniless, and will have to start over in my only known career (software development) that is brutally ageist. So my sincere question (not trolling) to HN peeps. Are there any such banks / off shore options for the 99% not-so-wealthy crowd, whereby I could "squirrel away" just a few 1000 $ (maybe like 40, to 50K) so that in my worst-case-scenario, I don't have to start from 0. I understand there is no incentives for the "well compensated defenders" since the $ amount of such accounts won't be in millions, but surely there must be some countries / banks that offer this? (NOTE: The intention is more to safeguard my individual future from a bad marriage and divorce and not greed. Hope you understand). Thank you!
- johansch 10y ago
  A prenuptial agreement would probably be easier? And cheaper...
  - ChuckMcM 10y ago
    Agree with the prenup. That is the simplest way to establish what will happen when you divorce. If you remain part of the 99% then it will likely be uncontested, if you hit the lottery and become super wealthy there is a chance your soon-to-be-ex-spouse would try to invalidate it.
    - phpnode 10y ago
      when
      - johansch 10y ago
        Nice catch.
- 10y ago
cthulhuology 10y ago
In case you're wondering, most firms in this business won't even talk to you unless you're looking to hide at least $10MM. Below that amount, the costs of setting up the corporate structures and paying all the necessary parties aren't worth it. It is kinda funny there is a practical cut off point for being "super-rich" at which point the rules start working for you.
- toephu2 10y ago
  and you know this how?
  - csomar 10y ago
    Your question is not much helpful. You are not in a position to question the parent poster about his knowledge or practices. His host country does. Many HN contributors are high-profile individuals.
- hkmurakami 10y ago
  If you're looking to hide $10MM+ with one firm, then diversification says that you have a lot more than that in total. So imo the "super-rich" cutoff is around $100M
  - dx034 10y ago
    I'm not sure that you need to diversify for that. It makes sense to have one really good lawyer who knows how to distribute it. The money will end up in different countries, trusts and with a number of partners. But if you don't want to deal with the complexity yourself, you likely need to have one expert who does. That's also why you need so much to start, it's not just about setting up one company, it's about creating a whole net of companies .
JustSomeNobody 10y ago
> Like many women married to very wealthy men, she didn’t know much about the family accounts.z Makes it sound like she married him for the money, but she didn't[0]. While it turns out she really didn't know much about the accounts[1], she help start the businesses that made the money[2]. [0] > Robert Oesterlund wasn’t born rich, either. When Pursglove first met him, on a cruise ship off Helsinki in the ’90s, he ran a struggling flower-import business. [1] This is truly stupid. In a marriage, a couple should share completely all of this information. Otherwise, do not get married. [2] > Living in Florida and New York, they started a series of companies. Oesterlund came up with most of the ideas, Pursglove would later state in court filings, and ran the companies day to day. Pursglove hired the employees, trained them and helped manage the offices.
- chris11 10y ago
  I think that $400 million could be a lot more complicated to handle than most family accounts, especially if the family was aggressively trying to minimize their tax liability, which they were. And the finances really started to get complicated because the husband started to hide the money when Pusgrove found out about the affair. Also, the legality of the business is questionable. It looks like the money was made from adware. So I would not expect Pusgrove would want to take much credit for the management of the company.
  - hanginghyena 10y ago
    Surprised actually. If she really did run the company "day to day", seems like she would be in a position to give him the boot (grab the accounts) vs. what actually happened.
- hkmurakami 10y ago
  [1] Rarely happens especially in the boomer'ish generation. Many stories of widows who are left with millions after the husband passes away, but has never been involved with managing the money. All too often, she is taken advantage of by "financial advisors" who swindle her through steep fees or worse.
- 10y ago
Terr_ 10y ago
> Xacti, which came to enfold most of their ventures, sold banner ads, video games and various other kinds of software, including “toolbars” that promised to clean viruses off your computer or free up space on your hard drive. Sometimes I can't tell whether I'm an ethical and honest person, or whether that's just an excuse for not being rich. > By his wife’s account, some of Oesterlund’s new friends also began tutoring him in how to minimize his taxes. That reminds me of how cheating in video-games spreads like a disease, socially-transmitted. [0] People enter into sub-groups where the behavior is seen as normal. [0] https://arxiv.org/abs/1112.4915 https://arxiv.org/abs/1112.4915
- theparanoid 10y ago
  Paul Le Roux is a case study of why not - https://magazine.atavist.com/he-always-had-a-dark-side https://magazine.atavist.com/he-always-had-a-dark-side.
  - Terr_ 10y ago
    I've skimmed the link, but I'm still a little unclear: Why not what?
    - deleted 10y ago
      [deleted]
    - deleted 10y ago
      [deleted]
    - deleted 10y ago
      [deleted]
    - NamTaf 10y ago
      I interpreted it as 'why not to lose your ethics and pursue richness in questionable areas'
  - Hydraulix989 10y ago
    Always? Without reading the article, sounds like confirmation bias.
gnicholas 10y ago
Note that the transfer pricing strategy only makes sense for this fellow because he's not a US citizen/resident. If he were, it would be illegal to not report the income of the (wildly-profitable) off-shore entity. And if you have to report the income on both sides, there's no point playing transfer pricing games. But due to his foreign residency and citizenship, he only has to report the US-based income to the IRS, and the transfer pricing shenanigans are "legal" but subject to repricing by the IRS.
- eonw 10y ago
  you can keep the money off shore and pay the taxes later though, no?
  - djrogers 10y ago
    That's not how individual income tax works in the US, only corporations get that special pleasure.
  - gnicholas 10y ago
    Not for individuals — US taxpayers have to pay tax on their worldwide income, though they can get credit for foreign taxes paid to other governments. When the income is received by an entity in a tax haven, there is generally no credit to be had. Speaking generally, if a corporation is owned by fewer than 10 US taxpayers, there is no effective deferral. This is based on the assumption that closely-held companies are being operated at the behest of the owners and will be structured in a way that is tax efficient for the individual owners. Public companies are not subject to these rules, and they can defer paying tax on some types of income.
    - eonw 10y ago
      yea i was more thinking of "earning" it and keeping it in the entity until its needed or wanted. that would allow you to defer taxes, yes? i was under the impression that it is not income until its paid to me as salary or dividends, that could be wrong though.
  - 10y ago
epx 10y ago
I don't really understand why someone would not just stay with $200M without hassles, instead of hiding $400M. The value of money is logarithmic. What can be bought with $400M that cannot be bought with $200M?? If it were a case of wife wanting 99% of his assets, it would be reasonable to fight. If I lived some of these FoaF stories where the husband is wiped out, then I'd rather go to jail (and profit from an MRA blog some years later)
- artur_makly 10y ago
  love can be ... bitter
- h4nkoslo 10y ago
  You don't get to be the kind of person who has $400 million by writing huge checks to make people go away.
  - PhantomGremlin 10y ago
    Sure you can. Here's an example of someone who hand-wrote a $975 million check to make his wife go away: http://www.businessinsider.com/harold-hamm-divorce-settlement-2015-4 http://www.businessinsider.com/harold-hamm-divorce-settlemen...
- Keyframe 10y ago
  What can be bought with $400M that cannot be bought with $200M?? Four movie studios instead of two! https://en.wikipedia.org/wiki/Korda_Studios https://en.wikipedia.org/wiki/Korda_Studios
- ChrisClark 10y ago
  Near the end of the article it said that they were finding out he may not actually have the $400M after all (It was just a claim to get a loan), or that has lost/used it all up over time during this case. Then he will have to prove his real hidden wealth, along with how he did it, otherwise risk paying out the $200M that he may not even have.
- tbrooks 10y ago
PaulAJ 10y ago
This puts me in mind of Bleak House https://en.wikipedia.org/wiki/Bleak_House https://en.wikipedia.org/wiki/Bleak_House. It sounds like the legal manouvering has entirely consumed the value of the estate.
n00b101 10y ago
The more interesting question is what is the source of all this money? Osterlund has a net worth of $400MM. His company, Xacti, geneated revenues of $75MM per year. The article explains that Xacti "sold banner ads, video games and various other kinds of software, including “toolbars” that promised to clean viruses off your computer or free up space on your hard drive." I don't think the article really explains how this malware could generate such huge amounts of wealth. The company's website [1] is nothing short of pathetic. The NYT article does mention that Xacti had legal troubles and was investigated for some deceptive marketing practices (like default opt-in credit card charges for trial software). At best, Osterlund is an Internet con artist. But this still leaves questions in my mind. Can a simplistic malware fraud generate half a billion dollars of wealth? This mystery is compounded with a maze of sophisticated offshore banking structures, which sounds like more than just a way to hide assets from his wife. For example, could these structures have been used for money laundering by organized crime? Was this malware used for criminal activities beyond simply asking customers to enter their credit card numbers and charging them a few dollars? His wife was allegedly involved in his business, and is trying to get a share of his assets in divorce proceedings. If this money had a darker story behind it, that she knew of, she would have an incentive to leave that out of this NYT story. [1] http://www.xacti.com http://www.xacti.com
- cardine 10y ago
  > Can a simplistic malware fraud generate half a billion dollars of wealth? Absolutely. Traffic Vance was a great example of this. They installed adware on users computers and advertisers could bid on what sites you wanted your popup ad to display on and their adware would display your popup and charge you the money. There are shady individuals who bid $10+ for a single popup on a site like StateFarm.com with a fake "rate comparison" and the infected user would assume that the ad was associated with State Farm despite the tiny disclaimer at the bottom. On a site like CNN a shady weight loss supplement company might have a popup with a fake news story that pushes a misleading negative option subscription that is setup in a way where the infected user assumes it is a CNN story. The adware itself is designed to be as subtle as possible so that the user is unaware that anything suspicious is going on and views these ads as legitimate. Traffic Vance has since been renamed several times due to this type of scrutiny, are well past their glory days, and don't push their adware anymore. Despite all of that they are still making millions[1] from all of the people who have downloaded their adware over the past 10 years that still haven't deleted the adware or gotten a new computer. [1] https://www.propelmedia.com/propel-media-reports-6-1-million-of-adjusted-ebitda-for-the-3rd-quarter-of-2016/ https://www.propelmedia.com/propel-media-reports-6-1-million...
chris_va 10y ago
Interestingly, the couple might not be worth anything near $400M, and they haven't yet cracked the trust. If I had to guess, I'd assume that everything was bought on credit, and the true net worth is somewhere south of $40M.
6stringmerc 10y ago
Will definitely be checking this article out in full. The techniques are of particular interest to me. It might sound exotic to outsiders but I do like the suspension of disbelief that kind of comes along with fantastic wealth. I've used "hide vast sums of money" as the basis for a long, serious screenplay based on the Enron downfall of the early 2000s in the US. Currently in review for edits. If you'd like to read I can make it available by request. https://www.scriptrevolution.com/scripts/do-unto-others https://www.scriptrevolution.com/scripts/do-unto-others
- elemeno 10y ago
  You don't have an e-mail address in your profile, else I would have used that instead. As someone who works in finance, and has a keen interest in how the murky side of that world works, I'd love to read your screenplay.
  - 6stringmerc 10y ago
    Ack yes about that I tend to use Twitter as the fence to connect then will provide email/DropBox link. If that's not a path for you I can say it'll be public early in 2017 I think.
trhway 10y ago
A recently arrested colonel of the Moscow anti-corruption police had $100M+ in cash in his apartment (i wonder - may be he just was working from home much?). Another $300M+ were in his bank accounts because I guess they just couldn't fit into the apartment - Russian city apartments are typically on the smaller side... I mean it is really hard to hide giving that $100M weight ~2000lb in $100 bills.
- kafkaesq 10y ago
  Details?
  - trhway 10y ago
    in English http://rbth.com/politics_and_society/2016/09/13/head-of-russian-anticorruption-unit-caught-with-140-million-in-cash_629607 http://rbth.com/politics_and_society/2016/09/13/head-of-russ... (my mistake actually - it was $140M and "According to the REN TV channel (in Russian), the money weighed about 1.5 tons: ") Most of the related news are in Russian, and especially the humongous body of jokes about it - even for Russia, it is a bit out of everyday experience. I mean it is just a colonel and it makes any Russian FSB or police general who has amassed only bare tens of millions (or even just millions) of dollars to look like a complete professional failure.
    - kafkaesq 10y ago
      Interesting. BTW (if credible) this would seem to be pretty candid revelation for a government-affiliated organ like RBTH to make: According to Gazeta.ru (in Russian), the colonel lost his “protection” after the recent senior reshuffle at the FSB’s economic security department: The influential patrons he used to have there were removed, which allowed the FSB and the Investigative Committee to move in on the colonel.
      - trhway 10y ago
        it isn't exactly revelation. The domestic fight (basically for the control over Russia's economy, especially "grayish" parts of it) between FSB economic security dept (when it was taken over by new rising faction inside) on one side and economy/corruption related structures of police/Interior Ministry/Investigative Committee on the other side has been going pretty much in the open for about 3 years with FSB clearly (an not surprisingly at all) winning. During that time there have been a number of high profile arrests, including for example the head of Internal Affairs of the Investigative Committee together with some other high profiles there several months ago - that brought the Investigative Committee onto the side of and under the control by FSB. The opening salvo of the war, like a comedy setup, was when the 2 opposing teams - FSB and the other side - tried to setup and arrest each other for bribery in a restaurant with the FSB team succeeding http://www.newyorker.com/magazine/2015/07/27/the-double-sting http://www.newyorker.com/magazine/2015/07/27/the-double-stin... which immediately led to the arrest of the head of anti-corruption department of the Interior Ministry - general Sugrobov - and his deputy general Kolesnikov.
Vera527 10y ago
The story does not add up. What kind of person decides to go on a "beach walk" after finding documents that says their husband is worth 300M dollars? My reaction would be to get the document, and at least take a picture, and get the fuck out.
- hkmurakami 10y ago
  People respond in different ways in highly stressful, shocking situations. I have a "flight" response in high stress fight or flight situations, and can empathize with her response.
  - theparanoid 10y ago
    Shocking? That's unbelievable, as in I don't believe her.
  - erikb 10y ago
    Good argument. People do irrational things. But still, it's smart to assmue that taking pictures of interesting documents never hurts. I'm not worth $10k and already do it regularly.
- rbcgerard 10y ago
  she was at her own home...
Dowwie 10y ago
A fraudster-millionaire shares a fictionalized account of her side of a soap opera story too wild for television but just right for NY Times magazine
module0000 10y ago
This annoys the hell out of me... someone with the net economic value of a "cruise ship photographer" wants to get half(or more?) of their spouse's assets. Old news...people sleep with you and live in your home, and demand half of what you worked to create.
- chockZ 10y ago
  Did you even bother to read past the first few paragraphs?
  - module0000 10y ago
    I read the entire article. She was so involved...that she had no idea about the companies, bank accounts, or professionals involved. She sounds really integral to the business. I'm not defending the guy(I hate malware and the people that make it as much as the next person), but get yourself through a nasty divorce and you might change your tune. The real failure was the husband trying to "keep going" so to speak - he should have cashed out and disappeared as step #1. If the husband has/had any integrity, he demonstrated it by fighting this in court, instead of handing someone a picture of his wife and $250,000 in cash.
- hluska 10y ago
  Someone with the net economic value of a cruise ship photographer??? Before they got married, Oesterlund ran a struggling flower importer. Is it really so hard to believe that Pursglove was fairly heavily involved in his post-marriage success? Particularly in light of quotes like: "Pursglove hired the employees, trained them and helped manage the offices."
  - module0000 10y ago
    > "Pursglove hired the employees, trained them and helped manage the offices." And yet she had no idea about where the money went, the people paid to manage it, or really anything else. She was scorned, I get that, and she wanted half of what was his...not hers.
jorblumesea 10y ago
So basically, shady fraudster millionaire engages in more shady fraudulent activities, and takes steps to avoid any repercussions from illicit behavior. Not shocking at all.
- erikb 10y ago
  Not completely. It's more like seemingly righteous woman seeks compensation for hard work she did together with her soon-to-be-divorced husband, but no, actually both are fraudsters that now try to fraud each other.
cagataygurturk 10y ago
Walter White, are you there?
NTDF9 10y ago
A very interesting question about divorce asset-splitting: How are assets split if the woman (in the above story) cheated instead of the high net worth man and the man filed for divorce? Who gets what?
- scarmig 10y ago
  Depends on jurisdiction, but I believe with no-fault divorce laws, typically it doesn't play a role.
- epx 10y ago
  Typically, cheating is not a factor.
  - NTDF9 10y ago
    No wonder marriage is a shit deal. If love is the only thing uniting us, in a fall out, love should be the only thing that is lost.
    - sangnoir 10y ago
      Sign a prenup if that's your deal.
arbuge 10y ago
Actually $400m is quite easy to hide, if denominated in $100 bills. It would fit in a small 1-car garage. You could squeeze $1B in if you had a regular 2-car garage. Souce: http://thehustle.co/how-much-is-a-billion-dollars http://thehustle.co/how-much-is-a-billion-dollars
- dx034 10y ago
  Means you lose ~2% per year (inflation) and have a problem if new notes are issued. Also, if anyone finds out your money is gone very quickly (or if the garage burns down). I'd rather buy some precoious metals. Easier to hide, although the weight means you have to be careful where you hide it.
- vinhboy 10y ago
  > You’d need bubble wrap so the money would’t flop around during the exchange. Best thing I read all day.
asdfzxc 10y ago
I didn't quite understand this bit, where she discovers all these papers and laptops full of important documents and then just leaves to take a walk!
jlebrech 10y ago
i'd just pack my stuff and leave the country the second i'd transferred the money offshore. once you're a resident of another country you only have to share your wealth with the country you move into.
spaceflunky 10y ago
Oesterlund's yacht the "Deja Vu" is practically a major character in this whole story. In case you're wondering here are some pictures of the Yacht. Keep an eye out for the gaudy paintings of Oesterlund in the yacht. http://www.boatinternational.com/yachts/the-superyacht-directory/deja-vu--66631 http://www.boatinternational.com/yachts/the-superyacht-direc...
- clort 10y ago
  and by the way, all vessels over a certain size are required (by international maritime law) to have an AIS transponder fitted and enabled.. and there are internet sites which listen and post information, so we can see that Deja Vu is currently marked in Fort Lauderdale http://www.marinetraffic.com/en/ais/details/ships/shipid:386175/mmsi:319642000/imo:1006556/vessel:DEJA_VU though it seems that it has now been renamed as 'Broadwater' https://www.fleetmon.com/vessels/broadwater_1006556_25127/ https://www.fleetmon.com/vessels/broadwater_1006556_25127/ so perhaps has been written out of this story..
Brianspencer19 10y ago
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399 points by scarmig 10y ago

eb0la 10y ago

This looks a more readable and entertaining version of this academic journal: http://www.emeraldinsight.com/toc/jmlc/19/1 http://www.emeraldinsight.com/toc/jmlc/19/1 ;-)

sosuke 10y ago

I got stuck part way through. "She packed the laptop and documents, left her suitcase near the front door and went for one last walk on their beach." then a couple of lines later "When she opened her suitcase at the security line, there was no laptop. No paperwork. It was all gone." But then the subject changes, timeline changes and I can't find what ever happened to the laptop.

rphillips 10y ago
The article alludes to the fact the caretaker or the older gentleman removed the laptop and documents, or someone else in the employ of the husband.
- dx034 10y ago
  Was a bit confused by that. The way both of them are described I'd guess that they're not the nicest employers. If your employer is far away, probably doesn't pay you very well, why show such loyalty to prevent that from happening? The husband probably hadn't found out about it otherwise.
guelo 10y ago
Search for the paragraph that mentions "Bahamian police". Sounds like someone got bribed.
jsnell 10y ago
They return to it later: > That was when — and why — Fisher dispatched Pursglove to the Bahamas: to gather clues about where the money went. When Pursglove returned to the house to confront the caretaker that day, she told me, the caretaker admitted removing the papers from her suitcase. Bahamian police took custody of the papers, but later, and for reasons they never explained, handed them over to Oesterlund. When Fisher tried to subpoena the papers back, Oesterlund’s lawyers said he could not find any such documents; in any case, they wrote, Pursglove had no right to “stolen” materials.

sean_patel 10y ago

> In any given year, trillions of dollars sit safely in the offshore financial world, effectively stateless, protected by legions of well-compensated defenders and a tangle of laws deliberately designed to impede creditors and tax collectors. This. I always worry that if/when I get married -- in California where the Divorce laws are heavily in favor of the woman -- that I will be middle-aged, penniless, and will have to start over in my only known career (software development) that is brutally ageist. So my sincere question (not trolling) to HN peeps. Are there any such banks / off shore options for the 99% not-so-wealthy crowd, whereby I could "squirrel away" just a few 1000 $ (maybe like 40, to 50K) so that in my worst-case-scenario, I don't have to start from 0. I understand there is no incentives for the "well compensated defenders" since the $ amount of such accounts won't be in millions, but surely there must be some countries / banks that offer this? (NOTE: The intention is more to safeguard my individual future from a bad marriage and divorce and not greed. Hope you understand). Thank you!

johansch 10y ago
A prenuptial agreement would probably be easier? And cheaper...
- ChuckMcM 10y ago
  Agree with the prenup. That is the simplest way to establish what will happen when you divorce. If you remain part of the 99% then it will likely be uncontested, if you hit the lottery and become super wealthy there is a chance your soon-to-be-ex-spouse would try to invalidate it.
  - phpnode 10y ago
    when
    - johansch 10y ago
      Nice catch.
10y ago

cthulhuology 10y ago

In case you're wondering, most firms in this business won't even talk to you unless you're looking to hide at least $10MM. Below that amount, the costs of setting up the corporate structures and paying all the necessary parties aren't worth it. It is kinda funny there is a practical cut off point for being "super-rich" at which point the rules start working for you.

toephu2 10y ago
and you know this how?
- csomar 10y ago
  Your question is not much helpful. You are not in a position to question the parent poster about his knowledge or practices. His host country does. Many HN contributors are high-profile individuals.
hkmurakami 10y ago
If you're looking to hide $10MM+ with one firm, then diversification says that you have a lot more than that in total. So imo the "super-rich" cutoff is around $100M
- dx034 10y ago
  I'm not sure that you need to diversify for that. It makes sense to have one really good lawyer who knows how to distribute it. The money will end up in different countries, trusts and with a number of partners. But if you don't want to deal with the complexity yourself, you likely need to have one expert who does. That's also why you need so much to start, it's not just about setting up one company, it's about creating a whole net of companies .

JustSomeNobody 10y ago

> Like many women married to very wealthy men, she didn’t know much about the family accounts.z Makes it sound like she married him for the money, but she didn't[0]. While it turns out she really didn't know much about the accounts[1], she help start the businesses that made the money[2]. [0] > Robert Oesterlund wasn’t born rich, either. When Pursglove first met him, on a cruise ship off Helsinki in the ’90s, he ran a struggling flower-import business. [1] This is truly stupid. In a marriage, a couple should share completely all of this information. Otherwise, do not get married. [2] > Living in Florida and New York, they started a series of companies. Oesterlund came up with most of the ideas, Pursglove would later state in court filings, and ran the companies day to day. Pursglove hired the employees, trained them and helped manage the offices.

chris11 10y ago
I think that $400 million could be a lot more complicated to handle than most family accounts, especially if the family was aggressively trying to minimize their tax liability, which they were. And the finances really started to get complicated because the husband started to hide the money when Pusgrove found out about the affair. Also, the legality of the business is questionable. It looks like the money was made from adware. So I would not expect Pusgrove would want to take much credit for the management of the company.
- hanginghyena 10y ago
  Surprised actually. If she really did run the company "day to day", seems like she would be in a position to give him the boot (grab the accounts) vs. what actually happened.
hkmurakami 10y ago
[1] Rarely happens especially in the boomer'ish generation. Many stories of widows who are left with millions after the husband passes away, but has never been involved with managing the money. All too often, she is taken advantage of by "financial advisors" who swindle her through steep fees or worse.
10y ago

Terr_ 10y ago

> Xacti, which came to enfold most of their ventures, sold banner ads, video games and various other kinds of software, including “toolbars” that promised to clean viruses off your computer or free up space on your hard drive. Sometimes I can't tell whether I'm an ethical and honest person, or whether that's just an excuse for not being rich. > By his wife’s account, some of Oesterlund’s new friends also began tutoring him in how to minimize his taxes. That reminds me of how cheating in video-games spreads like a disease, socially-transmitted. [0] People enter into sub-groups where the behavior is seen as normal. [0] https://arxiv.org/abs/1112.4915 https://arxiv.org/abs/1112.4915

theparanoid 10y ago
Paul Le Roux is a case study of why not - https://magazine.atavist.com/he-always-had-a-dark-side https://magazine.atavist.com/he-always-had-a-dark-side.
- Terr_ 10y ago
  I've skimmed the link, but I'm still a little unclear: Why not what?
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  - NamTaf 10y ago
    I interpreted it as 'why not to lose your ethics and pursue richness in questionable areas'
- Hydraulix989 10y ago
  Always? Without reading the article, sounds like confirmation bias.

gnicholas 10y ago

Note that the transfer pricing strategy only makes sense for this fellow because he's not a US citizen/resident. If he were, it would be illegal to not report the income of the (wildly-profitable) off-shore entity. And if you have to report the income on both sides, there's no point playing transfer pricing games. But due to his foreign residency and citizenship, he only has to report the US-based income to the IRS, and the transfer pricing shenanigans are "legal" but subject to repricing by the IRS.

eonw 10y ago
you can keep the money off shore and pay the taxes later though, no?
- djrogers 10y ago
  That's not how individual income tax works in the US, only corporations get that special pleasure.
- gnicholas 10y ago
  Not for individuals — US taxpayers have to pay tax on their worldwide income, though they can get credit for foreign taxes paid to other governments. When the income is received by an entity in a tax haven, there is generally no credit to be had. Speaking generally, if a corporation is owned by fewer than 10 US taxpayers, there is no effective deferral. This is based on the assumption that closely-held companies are being operated at the behest of the owners and will be structured in a way that is tax efficient for the individual owners. Public companies are not subject to these rules, and they can defer paying tax on some types of income.
  - eonw 10y ago
    yea i was more thinking of "earning" it and keeping it in the entity until its needed or wanted. that would allow you to defer taxes, yes? i was under the impression that it is not income until its paid to me as salary or dividends, that could be wrong though.
- 10y ago

epx 10y ago

I don't really understand why someone would not just stay with $200M without hassles, instead of hiding $400M. The value of money is logarithmic. What can be bought with $400M that cannot be bought with $200M?? If it were a case of wife wanting 99% of his assets, it would be reasonable to fight. If I lived some of these FoaF stories where the husband is wiped out, then I'd rather go to jail (and profit from an MRA blog some years later)

artur_makly 10y ago
love can be ... bitter
h4nkoslo 10y ago
You don't get to be the kind of person who has $400 million by writing huge checks to make people go away.
- PhantomGremlin 10y ago
  Sure you can. Here's an example of someone who hand-wrote a $975 million check to make his wife go away: http://www.businessinsider.com/harold-hamm-divorce-settlement-2015-4 http://www.businessinsider.com/harold-hamm-divorce-settlemen...
Keyframe 10y ago
What can be bought with $400M that cannot be bought with $200M?? Four movie studios instead of two! https://en.wikipedia.org/wiki/Korda_Studios https://en.wikipedia.org/wiki/Korda_Studios
ChrisClark 10y ago
Near the end of the article it said that they were finding out he may not actually have the $400M after all (It was just a claim to get a loan), or that has lost/used it all up over time during this case. Then he will have to prove his real hidden wealth, along with how he did it, otherwise risk paying out the $200M that he may not even have.
tbrooks 10y ago

PaulAJ 10y ago

This puts me in mind of Bleak House https://en.wikipedia.org/wiki/Bleak_House https://en.wikipedia.org/wiki/Bleak_House. It sounds like the legal manouvering has entirely consumed the value of the estate.

n00b101 10y ago

The more interesting question is what is the source of all this money? Osterlund has a net worth of $400MM. His company, Xacti, geneated revenues of $75MM per year. The article explains that Xacti "sold banner ads, video games and various other kinds of software, including “toolbars” that promised to clean viruses off your computer or free up space on your hard drive." I don't think the article really explains how this malware could generate such huge amounts of wealth. The company's website [1] is nothing short of pathetic. The NYT article does mention that Xacti had legal troubles and was investigated for some deceptive marketing practices (like default opt-in credit card charges for trial software). At best, Osterlund is an Internet con artist. But this still leaves questions in my mind. Can a simplistic malware fraud generate half a billion dollars of wealth? This mystery is compounded with a maze of sophisticated offshore banking structures, which sounds like more than just a way to hide assets from his wife. For example, could these structures have been used for money laundering by organized crime? Was this malware used for criminal activities beyond simply asking customers to enter their credit card numbers and charging them a few dollars? His wife was allegedly involved in his business, and is trying to get a share of his assets in divorce proceedings. If this money had a darker story behind it, that she knew of, she would have an incentive to leave that out of this NYT story. [1] http://www.xacti.com http://www.xacti.com

cardine 10y ago
> Can a simplistic malware fraud generate half a billion dollars of wealth? Absolutely. Traffic Vance was a great example of this. They installed adware on users computers and advertisers could bid on what sites you wanted your popup ad to display on and their adware would display your popup and charge you the money. There are shady individuals who bid $10+ for a single popup on a site like StateFarm.com with a fake "rate comparison" and the infected user would assume that the ad was associated with State Farm despite the tiny disclaimer at the bottom. On a site like CNN a shady weight loss supplement company might have a popup with a fake news story that pushes a misleading negative option subscription that is setup in a way where the infected user assumes it is a CNN story. The adware itself is designed to be as subtle as possible so that the user is unaware that anything suspicious is going on and views these ads as legitimate. Traffic Vance has since been renamed several times due to this type of scrutiny, are well past their glory days, and don't push their adware anymore. Despite all of that they are still making millions[1] from all of the people who have downloaded their adware over the past 10 years that still haven't deleted the adware or gotten a new computer. [1] https://www.propelmedia.com/propel-media-reports-6-1-million-of-adjusted-ebitda-for-the-3rd-quarter-of-2016/ https://www.propelmedia.com/propel-media-reports-6-1-million...

chris_va 10y ago

Interestingly, the couple might not be worth anything near $400M, and they haven't yet cracked the trust. If I had to guess, I'd assume that everything was bought on credit, and the true net worth is somewhere south of $40M.

6stringmerc 10y ago

Will definitely be checking this article out in full. The techniques are of particular interest to me. It might sound exotic to outsiders but I do like the suspension of disbelief that kind of comes along with fantastic wealth. I've used "hide vast sums of money" as the basis for a long, serious screenplay based on the Enron downfall of the early 2000s in the US. Currently in review for edits. If you'd like to read I can make it available by request. https://www.scriptrevolution.com/scripts/do-unto-others https://www.scriptrevolution.com/scripts/do-unto-others

elemeno 10y ago
You don't have an e-mail address in your profile, else I would have used that instead. As someone who works in finance, and has a keen interest in how the murky side of that world works, I'd love to read your screenplay.
- 6stringmerc 10y ago
  Ack yes about that I tend to use Twitter as the fence to connect then will provide email/DropBox link. If that's not a path for you I can say it'll be public early in 2017 I think.

trhway 10y ago

A recently arrested colonel of the Moscow anti-corruption police had $100M+ in cash in his apartment (i wonder - may be he just was working from home much?). Another $300M+ were in his bank accounts because I guess they just couldn't fit into the apartment - Russian city apartments are typically on the smaller side... I mean it is really hard to hide giving that $100M weight ~2000lb in $100 bills.

kafkaesq 10y ago
Details?
- trhway 10y ago
  in English http://rbth.com/politics_and_society/2016/09/13/head-of-russian-anticorruption-unit-caught-with-140-million-in-cash_629607 http://rbth.com/politics_and_society/2016/09/13/head-of-russ... (my mistake actually - it was $140M and "According to the REN TV channel (in Russian), the money weighed about 1.5 tons: ") Most of the related news are in Russian, and especially the humongous body of jokes about it - even for Russia, it is a bit out of everyday experience. I mean it is just a colonel and it makes any Russian FSB or police general who has amassed only bare tens of millions (or even just millions) of dollars to look like a complete professional failure.
  - kafkaesq 10y ago
    Interesting. BTW (if credible) this would seem to be pretty candid revelation for a government-affiliated organ like RBTH to make: According to Gazeta.ru (in Russian), the colonel lost his “protection” after the recent senior reshuffle at the FSB’s economic security department: The influential patrons he used to have there were removed, which allowed the FSB and the Investigative Committee to move in on the colonel.
    - trhway 10y ago
      it isn't exactly revelation. The domestic fight (basically for the control over Russia's economy, especially "grayish" parts of it) between FSB economic security dept (when it was taken over by new rising faction inside) on one side and economy/corruption related structures of police/Interior Ministry/Investigative Committee on the other side has been going pretty much in the open for about 3 years with FSB clearly (an not surprisingly at all) winning. During that time there have been a number of high profile arrests, including for example the head of Internal Affairs of the Investigative Committee together with some other high profiles there several months ago - that brought the Investigative Committee onto the side of and under the control by FSB. The opening salvo of the war, like a comedy setup, was when the 2 opposing teams - FSB and the other side - tried to setup and arrest each other for bribery in a restaurant with the FSB team succeeding http://www.newyorker.com/magazine/2015/07/27/the-double-sting http://www.newyorker.com/magazine/2015/07/27/the-double-stin... which immediately led to the arrest of the head of anti-corruption department of the Interior Ministry - general Sugrobov - and his deputy general Kolesnikov.

Vera527 10y ago

The story does not add up. What kind of person decides to go on a "beach walk" after finding documents that says their husband is worth 300M dollars? My reaction would be to get the document, and at least take a picture, and get the fuck out.

hkmurakami 10y ago
People respond in different ways in highly stressful, shocking situations. I have a "flight" response in high stress fight or flight situations, and can empathize with her response.
- theparanoid 10y ago
  Shocking? That's unbelievable, as in I don't believe her.
- erikb 10y ago
  Good argument. People do irrational things. But still, it's smart to assmue that taking pictures of interesting documents never hurts. I'm not worth $10k and already do it regularly.
rbcgerard 10y ago
she was at her own home...

Dowwie 10y ago

A fraudster-millionaire shares a fictionalized account of her side of a soap opera story too wild for television but just right for NY Times magazine

module0000 10y ago

This annoys the hell out of me... someone with the net economic value of a "cruise ship photographer" wants to get half(or more?) of their spouse's assets. Old news...people sleep with you and live in your home, and demand half of what you worked to create.

chockZ 10y ago
Did you even bother to read past the first few paragraphs?
- module0000 10y ago
  I read the entire article. She was so involved...that she had no idea about the companies, bank accounts, or professionals involved. She sounds really integral to the business. I'm not defending the guy(I hate malware and the people that make it as much as the next person), but get yourself through a nasty divorce and you might change your tune. The real failure was the husband trying to "keep going" so to speak - he should have cashed out and disappeared as step #1. If the husband has/had any integrity, he demonstrated it by fighting this in court, instead of handing someone a picture of his wife and $250,000 in cash.
hluska 10y ago
Someone with the net economic value of a cruise ship photographer??? Before they got married, Oesterlund ran a struggling flower importer. Is it really so hard to believe that Pursglove was fairly heavily involved in his post-marriage success? Particularly in light of quotes like: "Pursglove hired the employees, trained them and helped manage the offices."
- module0000 10y ago
  > "Pursglove hired the employees, trained them and helped manage the offices." And yet she had no idea about where the money went, the people paid to manage it, or really anything else. She was scorned, I get that, and she wanted half of what was his...not hers.

jorblumesea 10y ago

So basically, shady fraudster millionaire engages in more shady fraudulent activities, and takes steps to avoid any repercussions from illicit behavior. Not shocking at all.

erikb 10y ago
Not completely. It's more like seemingly righteous woman seeks compensation for hard work she did together with her soon-to-be-divorced husband, but no, actually both are fraudsters that now try to fraud each other.

cagataygurturk 10y ago

Walter White, are you there?

NTDF9 10y ago

A very interesting question about divorce asset-splitting: How are assets split if the woman (in the above story) cheated instead of the high net worth man and the man filed for divorce? Who gets what?

scarmig 10y ago
Depends on jurisdiction, but I believe with no-fault divorce laws, typically it doesn't play a role.
epx 10y ago
Typically, cheating is not a factor.
- NTDF9 10y ago
  No wonder marriage is a shit deal. If love is the only thing uniting us, in a fall out, love should be the only thing that is lost.
  - sangnoir 10y ago
    Sign a prenup if that's your deal.

arbuge 10y ago

Actually $400m is quite easy to hide, if denominated in $100 bills. It would fit in a small 1-car garage. You could squeeze $1B in if you had a regular 2-car garage. Souce: http://thehustle.co/how-much-is-a-billion-dollars http://thehustle.co/how-much-is-a-billion-dollars

dx034 10y ago
Means you lose ~2% per year (inflation) and have a problem if new notes are issued. Also, if anyone finds out your money is gone very quickly (or if the garage burns down). I'd rather buy some precoious metals. Easier to hide, although the weight means you have to be careful where you hide it.
vinhboy 10y ago
> You’d need bubble wrap so the money would’t flop around during the exchange. Best thing I read all day.

asdfzxc 10y ago

I didn't quite understand this bit, where she discovers all these papers and laptops full of important documents and then just leaves to take a walk!

jlebrech 10y ago

i'd just pack my stuff and leave the country the second i'd transferred the money offshore. once you're a resident of another country you only have to share your wealth with the country you move into.

spaceflunky 10y ago

Oesterlund's yacht the "Deja Vu" is practically a major character in this whole story. In case you're wondering here are some pictures of the Yacht. Keep an eye out for the gaudy paintings of Oesterlund in the yacht. http://www.boatinternational.com/yachts/the-superyacht-directory/deja-vu--66631 http://www.boatinternational.com/yachts/the-superyacht-direc...

clort 10y ago
and by the way, all vessels over a certain size are required (by international maritime law) to have an AIS transponder fitted and enabled.. and there are internet sites which listen and post information, so we can see that Deja Vu is currently marked in Fort Lauderdale http://www.marinetraffic.com/en/ais/details/ships/shipid:386175/mmsi:319642000/imo:1006556/vessel:DEJA_VU though it seems that it has now been renamed as 'Broadwater' https://www.fleetmon.com/vessels/broadwater_1006556_25127/ https://www.fleetmon.com/vessels/broadwater_1006556_25127/ so perhaps has been written out of this story..

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