Investigation and Security Blog

14 Places Where People Hide Assets

Hiding-Financial-Assets Best places to hide Illegal assets

Hiding assets is a game people play to keep their money out of the hands of creditors. The actual financial hiding places are usually straightforward, as opposed to stuffing money in a mattress or hiding it in a tin can buried under a tree.

Common Hiding Places

  1. Home Mortgage PayDown--A favorite tactic in Texas which has strong homestead protection laws is the paydown to increase the equity position. Likewise, a mechanic's lien (such as new roof, additions, swimming pools, improvements) are subject to being paid off prematurely, thereby increasing equity positions
  2. Universal Life Insurance or Annuity-- A besieged debtor can take advantage of the provision in the policy that allows additional payments by the insured to the policy fund. Annuities allows the purchaser to make lump sum payments, monthly payments or both to secure an income in the future. Hiding cash for the future in this manner has the added appeal of being exempt against creditors in some states.
  3. Purchases of Savings Bonds, Cashier's Checks, and Traveler's Checks--A simple way to hide cash that is also very portable. Savings bonds, traveler's checks, cashier's check can be purchased at the local bank.
  4. Limited Partnerships (LP)--As an investment device, the general partner who raises capital for a business sells limited partnerships to investors. These investors have no legal liability for the debts of the business beyond the amount of their investment. They have no direct active role in running the business and LP are not subject to direct taxation by the IRS. These are great places to hide assets. First, friends or relatives can invest the target's money for him as limited partners. Second, LP's are not usually subject to quick liquidation, hindering rapid collection efforts by creditors.
  5. Dissolved Corporations--Great place to hide assets because most people see that a corporate name is on the dead list at the Secretary of State's office, however the assets acquired during the term are very much alive, i.e., the automobile, the boat, the recreational vehicle or the "condo". They could also continue to acquire assets for years after it legally becomes defunct.
  6. Stockbroker Accounts--Securities held by the firm (i.e., bearer bonds, cash, mutual funds and other investment vehicles) for money laundering.. Keeping the broker secret is key in keeping the assets from the attorney/investigator's view and fleshing out the details without the account reports or financial statements listing securities is impossible.
  7. Intellectual Property (IP)--Assets such as copyrights, patents and trademarks gain royalties as do social media sites through host ads.
  8. Prepaid Cards--Numerous retail stores, telecommunication companies and even financial institutions offer prepaid cards. They are very portable and can be used anywhere in the US. Surveillance of the subject must be engaged directly observe the use of prepaid cards.
  9. Collectibles and Safe Deposit Boxes--Collectibles (antiques, art, books, coins, comic books, dolls, entertainment collectibles, jewelry, sports collectibles, stamps etc.) are hard to hide because most people show their collection or store them in a safety deposit box. The subject's accountant, online eBay, social networking or blog can lead to finding these collectible investments.
  10. Overseas/Offshore/Foreign Accounts--Cash assets are simple to hide in a foreign company for laundering or reinvestment there without paying taxes. In order to successfully hide the funds, the foreign bank must be hidden from both attorneys and investigators during discovery. A subject will also try to keep their trash clean in terms of not throwing away any statements.
  11. Assets in Other Names-- Putting a nephew or cousin's name on an asset may throw investigators off the trail when investigating public records.
  12. Payments to IRS--Overpaying the IRS is another good place to hide cash because the subject can get it back at the end of the year.
  13. Sweetheart Lawsuits--These lawsuits are like bogus liabilities because they escape the notice of many lawyers and investigators. Bogus lawsuits help shield defendants against other creditors. They attempt to defraud a third party. Two parties agree to an action where one claims injury caused by the other. No one was actually injured, but a setup of a solvent third party or insurance company occurs to get a payoff.  Furthermore, one large sweetheart deal can run interference against legitimate claims for years. Example: When an entrepreneur takes on considerable debt in starting a business and the business begins to fail, creditors want their money. The entrepreneur gets a friend to sue the business on some pretext, concocting a secured loan agreement or contract which then goes into default. The defendant in the subsequent lawsuit employs only a token defense resulting in a large judgement by the plaintiff. The company goes into bankruptcy, the assets go to the "creditor" and then the money gets recycled to the debtor after an appropriate handling fee for the phony creditor. 
  14. Shell Corporations (SC)--SC is a variation of using the dead or dissolved corporation affording its legal protection to both the owners and corporation to hide true ownership. With a shell corporation, the entity remains an active business registered with the state and the corporate charter, yet very few assets stay in the corporation's name. Acquired assets end up sold or transferred to other business entities. The operators or owners of the shell often conduct business in that name, renting property or equipment or engaging in lease arrangements, but the corporation may not actually own anything. A lawsuit against the shell may not yield anything in trying to collect the judgment. 
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