4 ms·

This is confusing as hell. So they are using financial records to claim that they are hiding assets...their evidence for this is...the financial records...that

This is confusing as hell. So they are using financial records to claim that they are hiding assets...their evidence for this is...the financial records...that they have...already. How does that work? And they went to the trouble of briefing against the Sacklers but don't explain what information they don't have already or aren't being given (i.e. why they believe something is being hidden). They just say: we have the records, boy there is a lot of them, we haven't gone through them all...but we know they aren't complete...the bois working hard there. And why is the punishment related to individual wealth at all? Are limited liability companies not really limited when a state govt laywer changes their mind? If someone breaks the law then charge the person who breaks the law (the point here is a headline for a politican...which is unfortunate given that some people at the company were clearly acting improperly). Also, transferring money to a Swiss bank account is not against the law. The lawyer quoted says it was moved offshore to "conceal" the source of money...that isn't how money laundering works. You need to move it to an account that won't report to the US authorities..this doesn't exist in Switzerland or anywhere in the world (a disadvantage of weak libel laws, I am pretty sure this would be actionable in Commonwealth law systems given how obviously erroneous and misleading the statement is). The whole lawyer/politician thing in the US is entertaining as an outsider. It is utterly bizarre when considered using any kind of logic.

adrr 7y ago
Transferring assets to different entities prior to impending bankruptcy is clear cut fraud. The company was charged and convicted of a felony which would pierce the corporate veil.
- hogFeast 7y ago
  It isn't. It is called fraudulent conveyance, and it is well covered by existing law (it is not fraud, it is not a criminal act). And the issue, as the article repeatedly says, is about personal wealth.
- loeg 7y ago
  > Transferring assets to different entities prior to impending bankruptcy is clear cut fraud. No. The transfers were (a) personal wealth and (b) a decade ago.
joe_the_user 7y ago
Also, transferring money to a Swiss bank account is not against the law. The lawyer quoted says it was moved offshore to "conceal" the source of money...that isn't how money laundering works. Money laundering "works" through a chain of actions whose intent is to conceal the original source of said money. Some or all of those actions might be legal in themselves, it is the intent that counts - if you know the state is after your assets and you knowingly transfer those assets to a place the state can't find them (or even, would have trouble finding them, whether or not it could technically find them), then a pattern is fairly evident even if the transfer itself is legal. Generally, playing games to make the state's job harder once it's investigating you is going to be a crime in the US (and many other places I believe). This is because the law has never been "blind" in the sense that it only considers actions - the law has always considered intentions and efforts to get results. Putting poison in a cup by itself isn't illegal, for example. Leaving that cup anywhere someone might drink from it on the other hand winds-up in crime.
- ethbro 7y ago
  E.g. see structuring, and the law related to https://en.m.wikipedia.org/wiki/Structuring https://en.m.wikipedia.org/wiki/Structuring Perfectly legal activities. Illegal as hell when performed with intent to evade reporting.
  - joe_the_user 7y ago
    Note that we don't need particular laws against structuring. Those engaged in structuring are engaging in actions intended to evade the original law and that's enough (though there may be precedent and laws in this regard, they aren't necessary). Also note similar laws in other countries are cited.
  - hogFeast 7y ago
    As implied in my original post: after FATCA you cannot evade reporting at all by transferring money to any Swiss bank (there are some countries that don't comply with FATCA but every large financial institution complies fully). That is why the bank reported it to the AG.
chris11 7y ago
> So they are using financial records to claim that they are hiding assets...their evidence for this is...the financial records...that they have...already. How does that work? Because they didn't get the financial records from the Sacklers. A Court would want a full financial disclosure as part of the settlement. Let's say the IRS audited a small business owner and settled with the owner for back taxes and fines. Well, the owner could have used some creative accounting to hide money, maybe contract out some work to an overseas company he controlled. This might not be illegal alone. But hiding his ownership of the overseas company could decrease the back taxes and fines he owned. So it's going to look bad for him if the IRS discovers his stake in the overseas company from his bank reporting a suspicious transaction.
roland00 7y ago
The point of this is misdirection sometimes known as cooking the books, where you may have financial documents that say money exist, but they documents are separate from another set of books that says money doesn't exist. You provide the cooked books to anyone who is suing you, Uncle Sam for taxes, and so on. Of course you have another set of documents that tells you where your money is, the point of having two set of books is to use one set to lie, misdirect, be non truthful in a court of law. ----- And Limited Liability Corporations have good faith as part of their contract as a requirement. You commit purposeful fraud and the LLC will not shield you. The term for this is known as "Piercing the Veil" / "Piercing the Corporate Veil" and when the veil is pierced your assest away from the corporation can be seized for behavior you did as an agent of the corporation. Now what are the rules of Piercing the Veil depends on your state for each state has different rules for Limited Liability Corporations, that said all 50 states have ways to pierce the veil for it is just a settled part of common law in the US.
- neeleshs 7y ago
  This practice of different books has a nice phrase in Karnataka,India - "Ramana lekka, Krishnana lekka". Literally, "Rama's accounting and Krishna's accounting". Rama is personification of righteousness and Krishna, while a God, is also considered mischievous.

adrr 7y ago

Transferring assets to different entities prior to impending bankruptcy is clear cut fraud. The company was charged and convicted of a felony which would pierce the corporate veil.

hogFeast 7y ago
It isn't. It is called fraudulent conveyance, and it is well covered by existing law (it is not fraud, it is not a criminal act). And the issue, as the article repeatedly says, is about personal wealth.
loeg 7y ago
> Transferring assets to different entities prior to impending bankruptcy is clear cut fraud. No. The transfers were (a) personal wealth and (b) a decade ago.

joe_the_user 7y ago

Also, transferring money to a Swiss bank account is not against the law. The lawyer quoted says it was moved offshore to "conceal" the source of money...that isn't how money laundering works. Money laundering "works" through a chain of actions whose intent is to conceal the original source of said money. Some or all of those actions might be legal in themselves, it is the intent that counts - if you know the state is after your assets and you knowingly transfer those assets to a place the state can't find them (or even, would have trouble finding them, whether or not it could technically find them), then a pattern is fairly evident even if the transfer itself is legal. Generally, playing games to make the state's job harder once it's investigating you is going to be a crime in the US (and many other places I believe). This is because the law has never been "blind" in the sense that it only considers actions - the law has always considered intentions and efforts to get results. Putting poison in a cup by itself isn't illegal, for example. Leaving that cup anywhere someone might drink from it on the other hand winds-up in crime.

ethbro 7y ago
E.g. see structuring, and the law related to https://en.m.wikipedia.org/wiki/Structuring https://en.m.wikipedia.org/wiki/Structuring Perfectly legal activities. Illegal as hell when performed with intent to evade reporting.
- joe_the_user 7y ago
  Note that we don't need particular laws against structuring. Those engaged in structuring are engaging in actions intended to evade the original law and that's enough (though there may be precedent and laws in this regard, they aren't necessary). Also note similar laws in other countries are cited.
- hogFeast 7y ago
  As implied in my original post: after FATCA you cannot evade reporting at all by transferring money to any Swiss bank (there are some countries that don't comply with FATCA but every large financial institution complies fully). That is why the bank reported it to the AG.

chris11 7y ago

> So they are using financial records to claim that they are hiding assets...their evidence for this is...the financial records...that they have...already. How does that work? Because they didn't get the financial records from the Sacklers. A Court would want a full financial disclosure as part of the settlement. Let's say the IRS audited a small business owner and settled with the owner for back taxes and fines. Well, the owner could have used some creative accounting to hide money, maybe contract out some work to an overseas company he controlled. This might not be illegal alone. But hiding his ownership of the overseas company could decrease the back taxes and fines he owned. So it's going to look bad for him if the IRS discovers his stake in the overseas company from his bank reporting a suspicious transaction.

roland00 7y ago

The point of this is misdirection sometimes known as cooking the books, where you may have financial documents that say money exist, but they documents are separate from another set of books that says money doesn't exist. You provide the cooked books to anyone who is suing you, Uncle Sam for taxes, and so on. Of course you have another set of documents that tells you where your money is, the point of having two set of books is to use one set to lie, misdirect, be non truthful in a court of law. ----- And Limited Liability Corporations have good faith as part of their contract as a requirement. You commit purposeful fraud and the LLC will not shield you. The term for this is known as "Piercing the Veil" / "Piercing the Corporate Veil" and when the veil is pierced your assest away from the corporation can be seized for behavior you did as an agent of the corporation. Now what are the rules of Piercing the Veil depends on your state for each state has different rules for Limited Liability Corporations, that said all 50 states have ways to pierce the veil for it is just a settled part of common law in the US.

neeleshs 7y ago
This practice of different books has a nice phrase in Karnataka,India - "Ramana lekka, Krishnana lekka". Literally, "Rama's accounting and Krishna's accounting". Rama is personification of righteousness and Krishna, while a God, is also considered mischievous.