Category: Uncategorized

IT WAS one of those chairman-to-chairman type of meetings when Peter Mansell, well known in Perth business, met David Smith, chairman of the emerging uranium miner Bannerman Resources.

Mansell was about to be officially anointed as the new chairman and head of iron ore business for Hanlong mining, the resource arm of the privately held Chinese conglomerate, Sichuan Hanlong.

Mansell recalled that he had been instructed by either Steven Hui Xiao, Hanlong’s managing director, or its vice-president, Calvin Zhu, to meet Smith and discuss Hanlong’s interest in a 100 per cent takeover of Bannerman.

Little did Mansell expect that Hanlong’s manoeuvrings for Bannerman, and the iron ore company Sundance Resources, would see him unwittingly thrust into a forensic investigation by the corporate regulator on alleged insider trading in securities and derivatives by Xiao, Zhu, Hanlong’s trading manager, Fan Zhang, and their wives.

So far, the Australian Securities and Investments Commission says it has identified 16 Australian and offshore trading accounts associated with the three men and their partners, reaping more than $3 million in suspect profits.

The glimpse into the inner workings of Hanlong was contained in documents tendered in the New South Wales Supreme Court this week, as ASIC revealed it would take six months to complete its complex and record-rich investigations.

While Mansell was otherwise engaged in the Bannerman negotiations, he recounted to ASIC that either Xiao, or Zhu, had told him Hanlong was talking to the trustees of the estate of a mining magnate, Ken Talbot, to acquire the Talbot group’s 16 per cent stake in Sundance Resources.

Talbot’s death in a plane crash while inspecting Sundance’s Mbalam iron ore project in Africa in June last year had put his empire into play, and Hanlong, with its ambitions to become one of the top five iron ore producers in the world, saw the Talbot holding as a fit.

It acquired the Talbot stake in March, and made a formal takeover offer for Sundance in July.

The Sundance board has since recommended that its shareholders accept Hanlong’s $1.65 billion takeover. While Hanlong has stood down the executives, uncertainty over the ASIC investigation continues to delay a decision by the Foreign Exchange Review Board about the takeover.

Next week, the regulator returns to court to make out its case for a travel ban on Xiao’s wife, Xike Hu, whom it considers a flight risk. Xiao, a Chinese national, is himself in breach of a court order and has failed to return to Australia after what should have been a brief visit to China.

The 37-year-old told his solicitor that because of high blood pressure was advised not to make the long flight to Australia.

Xiao’s solicitor, John Mitchell, rang ASIC late on November 28, alerting it to the situation. ASICs inquiries the next day to Australian Customs and Border Protection elicited the answer that existing court orders did not specifically stop Xike Hu from ”leaving or attempting to leave” Australia.

Hu had already agreed to court orders to surrender her passport to her lawyer, and is believed to be at the couple’s home in Sydney with her two young children. While ASIC seeks to hold Hu hostage until Xiao’s return, it has also amassed information that it says points to her role in the suspect trading.

And it intends to question her again, and this time impel her to answer questions about her husband’s activities following the High Court decision on November 30, which found there was no common law privilege against spousal incrimination in Australia.

In earlier examinations with investigators, Xiao and Hu both refused to answer 48 questions on spousal privilege grounds. The ASIC specialist in charge of the case, Colin Luxford, said in an affidavit that during an examination of Hu in early October, she said she did not know what a contract for difference was, she had not heard of Bannerman before the ASIC investigation, and she had never worked for Hanlong, though she still received a wage from the company.

But ASIC says that it has identified an IG Markets trading account in Hu’s name, in which Bannerman and Sundance contracts for difference were traded just before Hanlong’s respective takeover bids were announced to the market.

The announcement pushed the shares up 25 per cent, and the trades produced $736,000 profit.

Luxford said IG Markets had phone recordings of 20 calls by a Mandarin-speaking woman who identified herself as Ms Hu, regarding the movement of funds, and the placements of orders between March and July 2011.

ASIC had also identified a foreign exchange account held by Hu, in which $1.127 million was transferred just after the announcements into five bank accounts in China – one held by her husband, Xiao, and the rest by Caixia Xiao, her sister-in-law. Some of those funds transferred were the profits from the suspect trading, Luxford said.

ASIC has also turned its attention to Calvin Zhu, an Australian citizen. Court documents reveal that trading manager Fan Zhang said he went to a Commonwealth Bank at the request of Zhu and opened both a CFD, and trading account, under the name Wingatta.

He ”followed whatever Mr Zhu told him to do”, and passed the account’s internet password to Zhu. The Wingatta account generated profit of $1.2 million.

Zhu and Xiao have told ASIC that many of the transactions were nominee trading for Hanlong. One new offshore account associated with Xiao, Gold Pattern International Trading Account, made a combined profit $1.05 million, and Xiao has claimed Gold Pattern was a nominee of Hanlong Resources Hong Kong.

Peter Mansell told ASIC he had no knowledge of any company nominee strategy, and ASIC notes there was no record of this in any of the Hanlong accounts.

But the nominee claim by Xiao and Zhu has put ASIC on notice that some provisions of the Corporations Act – section 1043(i) and 1043(j), which exempts companies and officers from coming under the insider-trading umbrella in certain circumstances – will indeed have its day in court.

Republished from SMH: http://www.smh.com.au/business/insider-trading-investigation-traps-unwitting-20111208-1ol93.html#ixzz1fzIRDiMj – 9 December 2011

Finding Assets that have been deliberately hidden from you can be a key part to a divorce, litigation, fraud investigation or business dissolution.

What country are you searching in?

The most important factor to finding assets can be the country in which you are searching. If you are searching for assets in a country that has good online property, electoral roll, corporate register and other databases, then these searches can be done relatively quickly and inexpensively.

If you are searching for assets in a country where online searches can’t be conducted, then you may need to engage local experts to obtain this information. In some cases, local lawyers or investigators can enquire in a particular town or village as to property being held in the area. These searches can be time consuming and not always reliable.

Type of Asset

Most of the searches that Rushmore Forensic conduct relate to finding hidden property, businesses and bank accounts both in Australia and overseas.

In many cases, searches for property and businesses can result in success as information relating to these asset types is publicly available. Finding hidden bank accounts is much more difficult and in most cases, a solicitor in the country where the asset is located will need to be engaged.

Like any investigation or litigation, one of the key factors is having good documentation in relation to the assets that you are searching for. If you have a bank statement from an overseas bank then this can be a key part to finding and recovering funds. If you do not know the name of the bank together with account numbers, then the search becomes much more difficult.

Search Time

Online searches to find assets can be undertaken in a matter of hours, however if this is not an option then you may need to resort to more time consuming searches. Hiring a private investigator can be a good option in some asset searches. Most private investigators can be engaged for as little as $100 per hour in capital cities and slightly more in regional areas. The use of this type of investigator can yield surprising results and may be the difference as to whether you are able to find and recover the funds you are looking for.

More Information

If you would like more information about Finding Assets, then please don’t hesitate to contact us on an obligation free basis.

Rushmore Forensic has now migrated to Sentinel Visualizer for all data visualisation and link analysis charts.

SV empowers the needs of intelligence analysts, law enforcement, investigators, and information workers. Sentinel Visualizer has quickly become the next generation data visualization and analysis solution.

Using Sentinel Visualizer, Rushmore Forensic provides its clients with insight into patterns and trends hidden in complex data. Its database driven data visualization platform allows us to quickly see multi-level links among entities and model different relationship types. Advanced drawing and redrawing features generate optimized views to highlight the most important entities.

If you require advanced data analysis and data visualisation, then Rushmore Forensic has the tools and expertise to assist you with your matter.

For more information about how Rushmore Forensic and Sentinel Visualizer can assist you, then please contact us.

A bank worker has allegedly stolen more than $4 million from customer accounts over an eight-month period.

The 35-year-old woman, who was employed as a manager of a banking corporation, allegedly stole the funds from customer bank accounts between December 7, 2009 and August 20, 2010.

She accessed the accounts and transferred funds into her personal bank account before transferring the funds into foreign currency.

In total, police allege she defrauded the bank of $4.1 million.

Police were notified about irregularities by the bank and began an investigation.

She went to a police station with her lawyer today, and was charged with two counts of obtaining money by deception and three counts of dishonestly obtaining financial advantage by deception.

The woman was granted strict conditional bail to appear in the Downing Centre Local Court on January 17.

Police said her employment with the banking corporation had been terminated.

Source: AAP, 24 November 2011

When it comes to detailing the marital assets and liabilities, many people forget to include small business ventures.

You may have a home business, internet business or other venture that generates income. These businesses need to be valued and included in the joint assets and liabilities. Valuing a business of this type will always involve a degree of judgement and we recommend that a valuation be conducted. It can be surprisingly how often the value of a business can represent a large component of the net marital assets.

If you are currently separated, it’s important to try and obtain copies of as much documentation as you can in relation to these types of businesses. Examples include: bank statements, invoices, BAS Statements, Financial Statements and other correspondence. The documentation will assist in the preparation of a valuation.

If your divorce ends up in Court then the valuation can be used as evidence of the value of the business, or more commonly it will assist you and your ex partner in coming to a negotiated settlement.

If you would like more information about valuing a business as part of a property settlement then please contact us for an obligation free discussion.

A divorce lawyer says Facebook and social media are used in 90 percent of her divorce cases.

“You get a little bit of everything that happens on Facebook” said Carin Constantine.

“Everything from clients coming in with pictures of the opposing party doing a keg stand with high schoolers… to teenagers drinking alcohol served by a parent… to a picture of a husband at a nightclub dancing with a babysitter.”

A recent survey by the American Academy of Matrimonial Lawyers found that Facebook is cited in one in five divorces in the United States. Also, more than 80 percent of divorce lawyers reported a rising number of people are using social media to engage in affairs.

“There are times when my paralegal and I sit in this office and laugh because people are stupid. They put things out there on the internet that can last forever” Constantine said.

Divorce attorneys are becoming internet gurus. Because websites like Yahoo and Google cache images as soon as they’re put online, Constantine says she can find pictures from Facebook accounts that have been deactivated.

She simply goes to Google Images, types in the person’s name and searches through every single page of returns.

“Those pictures are still accessible by us, and we can still print them and we can still use them as evidence in your divorce case” Constantine said. And that printed piece of paper can be attached to a motion within the hour.

The best advice, aside from deactivating your Facebook account, is asking friends and family not to post any pictures of you online, even if they don’t tag you.

“The problem is, if you’ve got 400 friends, I assure you one of those friends [doesn’t] have all the privacy settings correct” she explained.

And she, along with thousands of other lawyers, can find it.

(Source: WTSP News)

About Rushmore Group

Rushmore Group assists people going through divorce value businesses and maximise their property settlement. Rushmore Group operates in the US, UK and Australia.

In Australia, there are three ways that a property settlement can occur:

1. An informal settlement: this is where the two parties agree amongst themselves on how the property should be split. This may or may not involve any paperwork or contractual arrangements.

2. Orders under the Family Law Act (“FLA”): The FLA applies to all people who are legally married and the marriage is recognised in Australia.

3. A Binding Financial Agreement: This is a legal agreement signed by both parties, under which both parties contract out of the FLA and enable a property settlement to take place.

A binding financial agreement is a technique that you can use with your partner to divide the joint marital assets. Before you enter into such an agreement, it’s important to consult a divorce lawyer to advise you on entering into such an agreement. It is a relatively new area of the law and there have been cases where binding financial agreements have been set aside by the Court.

If you are entering into a binding financial agreement or seeking orders in relation to a property settlement, and you or your partner own a business then it’s also important to obtain expert accounting advice to value the business and ensure that the property settlement does not result in paying excessive tax that could otherwise be minimised. A valuation for a business can have a significant impact on the overall assets available for property settlement and it’s therefore critical to obtain expert financial advice. In most cases, a forensic accountant familiar with the family law / divorce process will be able to assist you with these matters. We find that the cost of the advice is outweighed by the additional benefit flowing to the client.

There is no requirement for court approval or registration of a financial agreement, however both parties must have independent legal advice prior to its execution. A certificate of independent legal advice that is required to be annexed to the financial agreement must canvass two matters in relation to the party advised. This includes “the effects of the agreement on the rights of the party” and “the advantages and disadvantages, at the time that the advice was provided”.

Spouses may enter into a “termination agreement” that ends the earlier financial agreement entered into. Both parties must have  independent legal advice prior to the execution of a termination agreement.

About the Author

Andrew Firth is a forensic accountant based in Sydney. He is a Director of Rushmore Group and specialises in financial reconstructions, money tracing, divorce, and other forensic accounting engagements.

To arrange an appointment, contact us today.

If you are searching for the assets of an individual, company or other structure then you have come to the right place. Rushmore Forensic is comprised of specialist forensic accountants and investigators who may be able to assist you.

The exact approach employed when conducting an asset search will vary depending on the circumstances, however below is a ten step checklist which may assist you with your enquiries.

1. What information do you have to begin with? If you have an individual’s name then it will be useful to find any other information about them, such as their address. This can be done by doing a search on the online Whitepages. Alternatively you could use another online database such as an Electoral Roll search or at the other end of the spectrum; you may employ a private detective to follow the individual to a particular address. Always ensure that you use a reputable investigator and stay within the law. This will ensure that any information relating to your asset search can be admissible as evidence at a later date in Court.

2. The address. Once you have the relevant address, you can perform a property search with your state or territory’s Land Titles Office. If you have the physical address, you can perform a search and obtain the Folio Identifier of the property. Once you have the Folio Identifier you can then perform a Title Search on the property and determine the owners of the property.

3. Securities Commission Searches. Personal extract and Company extracts are commonly used when compiling information about an entity for an asset search. These types of searches can be performed online for a small fee and can provide useful investigative information for further enquiries.

4. Email records. Email can be a very valuable source of information. Provided you have accessed the email legally, it can lead directly to the relevant asset you are looking for. If you suspect that the asset is located overseas, then direct your search to emails from these types of email accounts. Scan the list of folders and see if you can identify any other useful information. Folders with the name “Personal” or similar names can often provide valuable investigative information.

5. Google. Often overlooked when conducting an asset search, a search on Google using different strings of key words can often reveal the information you are looking for. If you suspect that an individual has say purchased an overseas tourist property, you could search for “john smith bali resort”. Google regularly caches all the information on the net and it’s surprising what can be found using this free online tool.

6. Travel History. Do you have any other background information about an individual such as where they grew up and where they frequently holiday? This can lead you directly to an overseas city. Depending on how developed the country is and the legal system in that country, you may be able to perform both online searches or use a private investigator to obtain the relevant information.

7. Other Technology. Whilst it may be inappropriate (or illegal) to use in some circumstances, there are limited situations where a GPS locator can be placed on an object, such as a car that you own to monitor its movements. Typically the vehicle can then be tracked remotely on the internet and the whereabouts of the car can be tracked. This can be very useful in an asset search but is generally only used in specific circumstances. As we always advise, seek legal and other professional advice before you decide to employ such techniques.

8. Other Forensic Technology applications. In the modern technological era, there are many electronic devices that retain useful information. A Forensic computer expert can extract data from a variety of devices. This can include a printer, mobile phone, blackberry, other P.D.A device, desktop or laptop computer and memory sticks. Forensic technology professionals are even able to recover deleted files from these types of devices. The information recovered from these devices may lead to the asset you have been searching for.

9. Credit Card Statements. A review of an individual’s credit card statement can be surprisingly effective at locating assets. Once you have obtained the credit card statement it may show information that can be used to conduct other searches. For example the location of a restaurant can be found by typing in the vendors name into Google. This may indirectly assist you in your asset search.

10. Bank Statements. If you have access to bank statements of the individual or company in question may show large round numbered transfers or other suspicious transactions to other entities or to other countries. This information may directly lead to the assets in question.

As can be seen, there are numerous techniques that a forensic accountant can assist you with in relation to an asset search. The exact techniques will be dependent on the client situation and will depend upon your relationship with the individual or company concerned. Asset searches can have mixed results but in particular circumstances, they are well worth the time and cost that’s incurred. If you are concerned about assets being transferred out of your control then our experts at Rushmore Forensic will be happy to discuss your requirements in a confidential manner. Rushmore Forensic have expertise in divorce, commercial litigation and other forensic accounting engagements. Please contact us to arrange an appointment in our North Sydney or Baulkham Hills offices.

If you are looking for a divorce kit or online divorce you may be searching for a quick and simple process in which to finalise a divorce. You and your ex-partner may have reached a mutually acceptable property settlement with none or limited custody issues? You may simply need to formalise the agreement?

If you are in this situation, then the cost of divorce can be kept to a minimum and the divorce or separation process can be relatively simple. It’s advisable that any informal agreement is properly formalised with a divorce solicitor, so that it is recognised under the law and your partner can’t reneg on the agreement at a later date and obtain a greater percentage of the property settlement. Remember that the price of houses, shares and other assets in divorce can change very quickly (both increase and decrease) and an informal agreement may come unstuck if it is not formally ratified. Even if you believe that your financial affairs are straight forward, a consultation with a forensic accountant who specialises in divorce and family law valuations can ensure that you have considered all assets (and debts) in the property settlement and that there are no adverse tax consequences arising from the divorce/separation process.

If you or your ex-partner have a business (either as a sole trader, company, or trust) then it’s particularly important to obtain financial and valuation advice. One appointment with an expert forensic accountant in this area can often have a substantial effect on the net wealth of the parties following a divorce. If your ex-partner owns a business they generally have greater access and knowledge about the financial health of the business than you do.

Depending on the situation and the length of the marriage your ex-partner may want to artificially increase or decrease the value of the property. This is relatively easily performed with access to the books and records of the business.

An expert forensic accountant familiar with property settlements will be able to review the books and records of the business and provide a valuation, which can be used to negotiate a property settlement. A forensic accountant will also be able to detect whether there are any adjustments made by your former partner which do not form part of a proper valuation methodology which is acceptable to the Courts.

The use of an expert divorce solicitor and forensic accountant can ensure that your interests are best represented and that you have the best advice throughout the divorce or separation process.

To summarise, if you are looking for a divorce kit or online divorce, we strongly recommend that you take the time to obtain expert legal, and accounting advice. The cost of the advice in most cases is very easily covered with the identification of assets and debts which can change the value of the property settlement and ensuring that the proceeds from a divorce are not unnecessarily spent in increased taxes.

If you would like more information which can help you decide the best course of action following separation, then we would be happy to discuss this with you further on an obligation free basis. Please contact us to arrange a phone or in person appointment.

If you are looking to obtain a divorce then you need to find a solicitor to guide you through the process. Solicitors who specialise in divorce and have obtained specialist accreditation are called Family Law Accredited Specialists. Once you have decided to engage a lawyer you will become their client and your solicitor will deal with the Family Court and your ex-partner’ solicitor.

Your solicitor will ask you to provide various documents. As most solicitors charge by the hour, it makes sense to obtain as much of this information yourself. The types of information you could be asked to obtain include financial information (such as bank statements), and other details about corporate structures, trusts and businesses that you or your ex-partner run. You will also be required to provide details of assets and debts that you or your partner own or owe. Examples of the types of assets and debts that may apply to you include:

Typical Assets In Divorce

• Cash
• Your home
• Investment property
• Superannuation accounts
• Managed Funds
• Shares
• Pensions or other benefits
• Businesses that you either own entirely or a share

Typical Debts In Divorce

• Mortgage on your home
• Mortgages for investment properties
• Personal Loans
• HECS debts
• Credit Card Loans
• Debts to other organisations e.g. tax debts

In many cases, it will be up to you to obtain source documentation and potential evidence about your ex-partners business or other income earning activities. If you can obtain this documentation, it could make a significant difference to the final property settlement.

If you are looking to obtain specific information relevant to your circumstances on how to go about getting a divorce, we recommend that you seek the assistance of a divorce solicitor as soon as possible.

If there are companies, trusts or you or your partner own a business then we also recommend you obtain the advice of a qualified forensic accountant to conduct a valuation. The cost of obtaining a valuation report is in most cases offset by tax and other savings that a forensic accountant can identify.

To arrange a confidential and complimentary meeting in relation to your divorce and property settlement, please don’t hesitate to contact Rushmore Forensic today.