Justice has been served in the USA. – Two Canadian private investigators who had a booming, but fraudulent business tracing hidden assets have been convicted of money laundering in the US. They are also facing fraud charges in Canada.
They are in now doing 5 + years apiece in Federal prison in the US. – Fantastic!
Court documents described how the pair was paid to do “sweeps and searches of the world financial system’s wire transfer clearinghouses.” In Canada they have been charged with bilking vulnerable spouses involved in divorce proceedings out of millions of dollars.
Their clients paid a fee that often started fairly low, sometimes only $2000.00 but then the fees quickly escalated into higher and higher payments, in some cases fees of $250,000.00 were paid as “reports” of hidden wealth came in. Victims were told that millions of dollars had been hidden by their spouses in offshore accounts in exotic jurisdictions.
Unfortunately, of course, as the funds were located in a hidden account in one jurisdiction, it was always just after the money had been moved to another jurisdiction, naturally, necessitating more fees to go on to the next tax haven, then the next and the next. From Toronto to the Bahamas, to the Channel Islands, to Hong Kong, to Macao, to Dubai to Switzerland and on and on until the victims ran out of money.
Victims were told that the very next step, (more money please), would uncover the funds, but, like the proverbial “will-o-the-wisp” always just out of reach as the victims were led farther and farther astray.
It was a classic case of “I want to believe.” Divorcing spouses jumped at the chance to “buy into” these reports of vast wealth hidden offshore.
Why did people, especially professionals like lawyers and accountants believe that the pair had such fantastic inside knowledge?
Well, Johnson and White did have “good backgrounds,” White formerly worked for one of the big accounting firms in downtown Toronto. Johnson was an ex-police Detective Sergeant, a former aide to the chief of police no less. They were also licensed Private Investigators and the Private investigation industry is well regulated in Ontario.
Note: eventually the over-worked and understaffed licensing people in Ontario pulled their Private Investigator and their company licenses in Ontario, but by that time White and Johnson had set up a business in Panama doing the same thing and out of Ontario’s jurisdiction. They simply changed the office address on their website to offshore and it was business as usual.
Their clients were fed a variety of “explanations”, that the two PI’s had special access to bank clearing houses, secret banking sources and an informant in FINTRAC.
The pair was first introduced to IBIS by a retired very senior RCMP officer. The retired officer suggested that IBIS use the pair for IBIS bank investigations abroad and raved about their capabilities and access to sources. He should have known better!
Now, IBIS actually does real domestic and international asset searches. We do legal asset searches, meticulous tracing that can be documented, backed up with genuine paperwork, funds that can be located with Anton Piller orders and frozen with Mareva Injunctions and other asset freezing actions.
These searches are expensive and time consuming and there are no in advance guarantees. We are good, but we are not omniscient.
Also, many IBIS people actually worked for government intelligence agencies in former lives. We know how difficult it can be, for even a huge government organization with immense resources, thousands of employees and all the money in the world, to trace the assets of high profile dictators, much less those of some husband with a couple of million stashed somewhere anonymously.
We took one look at the wild claims of secret bank clearing house access, sources in FINTRAC, (never mind that FINTRAC procedures don’t work that way), and other secret world banking sources and took a pass. Like a lot of things that IBIS receives on a daily basis, the whole thing just didn’t pass the sniff test. It sounded goofy. We said: “Thanks, but no thanks” and forgot about them.
Fast forward to 2008.
Some lawyers and some accountants were suspicious of these claims, not just the lawyers that were acting for the defendants, that is, the people that Johnson and White were accusing of having hidden assets, but lawyers who were working for the Plaintiffs, those spouses who hired Johnson and White in the first place.
IBIS was approached by law firms and law firms acting for law firms. These clients were suspicious of the claims of international bank accounts, always just beyond grasp. This was particularly in view of the fact that many of the spouses alleged to have secret hordes, had never had that much money in total in their entire working lives, nor any way such as inheritances, bribes or lotto wins to come by it. They certainly did not appear to have any access to huge amounts of excess cash to hide on Caribbean islands.
IBIS was asked for a second opinion. We were provided with copies of bank statements, bank account numbers, Swift transfers and other wire transfer documents that Johnson and White produced and used to convince the victims and their lawyers. Where required, the accused persons provided authorizations for IBIS to investigate their accounts.
In every single case we checked, the claims were entirely fictitious, made up from the start. The alleged bank accounts didn’t exist. The account numbers were random; some didn’t even match the numbering systems of the banks concerned.
The wire transfers never happened, the bank statements and transaction records were all fakes.
We have been Private Investigators, and licensed in various jurisdictions in Canada and the US since 1976. IBIS believes that Private Investigators should be held to a higher standard than average citizens. Clients come to us for help. We are licensed to do the work. We are in a position of trust and we frequently see people at their most vulnerable and are supposed to look after our clients and tell them the truth, not lie to them and defraud them. Private Investigators like Johnson and White bring the entire profession into disrepute.
IBIS applauds those courageous lawyers and accountants who were conscientious enough to stand up and say: “Just a minute!” when faced with “too good to be true” claims, even though in many cases their own clients were aggressively desperate to believe the fairy tales.
Some called IBIS – some called the cops.
The pair eventually fled to the Caribbean.
Johnson and White hurt a lot of people.
They are now doing time in the USA.
It looks good on them.
Other stories on this topic can be found in the Toronto Star.