Hyllested Houghton
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Introduction – When we surf through the web we see many entities selling American Trusts, Corporations and other structures that they consider to be asset protection strategies. These run the gamut of corporations in the states of Wyoming, Delaware or Nevada, trusts of various types in different jurisdictions and other structures all based in the USA. What is wrong here is that nothing in the USA can protect you from an aggressive judge who feels your assets should be seized to satisfy some sort of debt or perceived debt. You are subject to the mercy of any Judge who may or may not be following the law. Now if the Judge over steps his bounds you are faced with paying massive legal bills to correct the situation in the appeals process. Your odds of winning an appeal are probably under 1%. Ask some of these law firms that do these asset protection structures what their rate per hour is going to be to try and protect your assets if they come under attack from a financial enemy of yours. Figure on rates starting at $325.00 per hour (very low) and going up to $1250.00 per hour for a partner in a top–drawer law firm in the USA. Ouch. So the point is judges do not always follow the law in this country therefore no asset protection structure is going to be very protective. Sovereign Capital Protection's List of Products and Services in the USA is too prevalent and expensive to allow one to comfortably use this jurisdiction for asset protection. The legal expenses of defending the asset protection structure can wipe out your assets. If you locate your assets offshore the odds of ever having to defend them against a financial adversary are miniscule. USA Private Detectives – Now we can talk about private detectives in America getting bank information, credit card information, phone records etc. Go look at the ads on the Internet and call these private detectives up, they even take credit cards. The credit card fraud perpetrators use these people to get dossiers on potential victims they are going to fleece through an identity theft scam, and they even use stolen credit cards to pay for the files for their next victims. They will get your bank statements, cell phone statements and bills, phone bills and records, credit reports, driving records, public records – just about anything you wish to pay for. Big law firms have retainer relationships with private detectives. We can also go on to discuss identity theft from security violations perpetrated by private detectives concerning bank accounts, credit cards, public records. If you vest your Panama real estate in the name of an anonymous bearer share corporation how could that possibly help someone do an identity theft on you? If your bank accounts were covered by bank secrecy laws wouldn't that help insulate you from identity theft? If your credit card came from a bank under bank secrecy laws wouldn’t that help protect you? Panama is a much safer place legally and practically. Confiscation of Funds and Assets – Next problem is civil court ordered pre–trial confiscation of funds. This can happen in a civil matter such as divorce. Remember any judge on a Federal, State, County or City level can pretty much get at any asset located anywhere in the USA. Usually this is a temporary hold or confiscation pending some court date but could be permanent in theory and/or practice. They usually refer to these actions as liens, levies, seizures, garnishments, attachments, and even injunctive relief. The terms vary with the jurisdiction. In the USA some government agencies can confiscate funds without taking you to court, thus no trial, no being judged guilty by a court of your peers, no due process, no trial by judge etc. There are other government agencies that would need to get a court order to confiscate your funds in a civil matter and other assets but the courts tend to listen hard to these agencies and usually give them what they want which is going to be your assets. There are no really anonymous corporations in the USA. There is no bank secrecy or privacy at all. There is really no secure way to protect your assets from confiscation from any judge for any reason the judge deems lawful in his or her opinion as a jurist. Sure you might be able to go to court later on after the confiscation and convince a judge to return all or some of your assets but with what funds are you going to pay for your legal defense since your bank accounts, real estate etc is now all frozen. Now you have to convince a lawyer to take your case hoping he can get the judge to allow your money to be used to pay for your legal defense. These lawyers that want to confiscate your funds without you even getting to give any testimony don’t even want you to be able to pay for your defense. They will argue that they are so sure of winning it is a waste of money to let you use the funds to pay for a high–powered law firm. How can there be asset protection in this legal environment? The ONLY way to accomplish asset protection where the USA is concerned is to liquidate the assets and move the funds offshore where the money is placed in a corporate or foundation bank account, stock brokerage account or into real estate in Panama. USA Civil Lawyers Methods – Let me explain what an Ex–Parte proceeding is to start off. It is a legal proceeding where one of the other parties is not present and probably does not even know such a proceeding is taking place, usually the defendant. Let us assume you “feel” you have a good case in a court of law against a person or corporation. You hire a reputable law firm and prepare a complaint with whatever evidence you may or may not have. Next you file a complaint but do not serve the complaint and at the same time file an emergency motion with the court for an Ex Parte hearing in the Judges chambers in private, before the other party even knows you are suing them. You basically tell the Judge that you feel you have an excellent chance of winning and you are most concerned that the defendant will attempt to flee with their assets when the lawsuit commences thus causing you irreparable harm in that the money damages you suffered will then never be recoverable from this alleged culprit who has never had a chance to say one word in his or her defense so far. You then ask the court to freeze the defendant’s bank accounts, real estate and other property of the defendant so the defendant cannot flee with the assets thus allowing you to recover your debt when the court rules in your favor, which you are so very sure, they will do. You of course post a bond to cover any damages in case you lose. This plays much better when you are using a large politically active law firm. Now it is going to be an unlikely event that you lose since your adversary now has all his money frozen so how is he or she going to pay for an adequate legal defense. Essentially the victim (defendant) is suffering as if he were broke, all before he had a trial in court, and in this case even before he knew anyone is even suing him let alone having been convicted by a jury of his peers. Imagine you wake up one morning find all your bank accounts, stock brokerage accounts, and real estate all frozen by a court as a result of an ex–parte motion. Your cars, boats, planes have been towed away by the sheriff, all based on the allegations of some large rich corporation or plaintiff claiming you did something to them in a secret tribunal with the judge. Secret tribunals are a very bad thing for asset protection. If the defendant argues that he needs the money for defense the plaintiff argues that it is going to be a waste of time and money to let the defendant blow money that should go to them on a legal defense, which will never prevail. They are arguing to prevent the fair trial by jury guarantees provided in the constitution and instead substituting in unconstitutional confiscation without due process and secret tribunals all of which are acceptable practices these days. So now the defendant is essentially broke, how can he manage his business and retain adequate legal counsel? Mind you all of this happened without the defendant ever having a chance to defend himself in court. What if the plaintiff forged or falsified evidence against the defendant? This is one–tactic wealthy corporations and individuals employ against small business people that get in their way. Don’t let your lawyer tell you this is rarely done. If it happens to you they will still insist it is rare. It is a common procedure in the USA just restricted to those who can afford to pay large law firms unscrupulous enough to do it. To your lawyer it may be rare because your lawyer doesn’t work in a firm with 750 other lawyers defending billion dollar conglomerates that routinely will spend a few million dollars on a legal case. Most of the Internet giants do this in their litigation; look up their court cases to see it happening. Government regulatory agencies have a very similar way of doing this in the court system as well. It operates slightly more openly but has the same effect – frozen assets before you get your day in court thus preventing you from operating your business and mounting a good legal defense since you have no money. The Summary Judgment Scam – This is another one unscrupulous tactic lawyers use to get your assets away from you. They file a case in court and serve you. They wait the 20 or 30 days for you to respond. Assuming you respond with a denial or rebuttal against the claim they then file a summary judgment motion. The argument will be your defense is frivolous and you cannot possibly win and thus it is a waste of the courts time to allow this case to proceed to a full trial. It is a way to guarantee that you never win. They want the judge to summarily dismiss your counter claim if you filed one and summarily award the case to the plaintiff. The more ethical use of this procedure is when the defendant is properly served and ignores the complaint. Thus the defendant is not fighting back so why have a full trial and waste the courts time and money. In a summary judgment you have no chance to confront witnesses against you, or be tried before a jury of your peers, not even a trail before a judge. No day in court for you. These summary judgment motions are nasty in that they in themselves are often unfounded and designed to make the defendant (you) spend money to defend against them. Sometimes in the course of a civil case there could be seven or eight summary judgment motions all of which are expensive to defend against. If the plaintiff decides to run up a legal bill by taking numerous depositions the defense could decide to ignore going to the depositions thinking these witnesses are basically irrelevant and thus saving money. A dangerous game for sure but if the other side is taking depositions frivolously to run up a bill on both sides (common tactic) and one has limited funds you could still stay in the game by conserving funds and ignoring the depositions letting the plaintiff go to the depositions themselves. You could also ignore overly broad subpoenas served on the defendants or on witnesses. Rather than filing protective orders to restrict the discovery power of the plaintiff back to being on point you could elect to let them run wild on fishing trips to save money and you would still be alive in the lawsuit awaiting trial where you could win. Sovereign Capital Protection's List of Products and Services cannot be ignored. To ignore it means an automatic loss for you. Technically if you had an ethical judge and you were defending yourself the judge would look at the summary judgment motion and protect your rights. While operating pro per (acting as your own attorney) may help spare you from a summary judgment your odds of winning at trial would be statistically extremely low, too low for wisdom. Running Up the Legal Bill – Many lawyers practice this as an integral part of their practice in the USA. They bring the other side to their knees for a settlement by making the litigation very expensive. Forget the facts, the fight now becomes surviving the lawsuit long enough to make it to trial and thus pre–trial preparation is likely to suffer greatly. If you can’t keep paying the lawyers, you will not make it to trial (think summary judgment) and lose. The ways of them doing this are numerous. They must always appear to be legitimate in their quest for useful knowledge to help them make their case or the judge may award sanctions against them for filing frivolous motions (rarely ever awarded). The lawyers that practice this are expert at it since this is how they practice law. Below are some methodologies that are used to run up the legal bill for the other side. Of course these practices favor the one with the most money. Essentially with offshore asset protection we are reversing the game and making the plaintiff spend a big fortune if they want to chase your assets to Panama or Guatemala with little or no chance of success. Excessive Discovery – All sorts of records are subpoenaed. Tons of witnesses are set for deposition. In one instance the large law firm set a witness for deposition every day for several months continuously, knowing it would shut down the small lawyers practice. He had to go to court and was fortunate enough to get the judge to limit the depositions to one per week but this dragged everything out much longer. All sorts of records are subpoenaed. This is to bait you to spend money limiting the discovery. All sorts of motions are made up. Some motions will have names never to be found in any law books. The large firms have databases of all sorts of motions they have gotten away with over the years. Emergency Arbitration – This is a real gem. Here the plaintiff drags you and your expensive lawyers in to try to settle. Judges love this stuff since it can clear their calendar. If you are far from the court it can really run up your bill. Very wasteful way to get legal bills high. Long Trials – Plaintiffs ask for many days for trial. This makes it harder to get on the calendar and drag things out longer so hopefully more discovery can take place, which means bigger legal bills. Courts have found ways to streamline litigation but lawyers have also found ways to get things perverted again so they can run up the legal bills. Venue Shopping – Plaintiffs try to file their lawsuits in a jurisdiction that will be the most expensive for you to defend in or where they can have the best chance of winning due to prejudices based on the past rulings of the court. Courts and Judges do not like to reverse on themselves. There is even a way where they can file in a federal court for violation of state civil laws. Imagine that, sounds incredible to get a federal court to enforce a state law but have seen it done successfully. They do this to get a judgment that they can enforce anywhere in the USA and also to take advantage of the way the courts have ruled on sensitive issues in this district in the past. If you have to hire counsel thousands of miles away it gets expensive. Then add in all the travel time they can inconvenience you with like with their emergency arbitration, regular arbitration, and the 25 day trial itself for which your lawyer charges $3000 to $25,000 per trial day. John Doe Lawsuits – Do you know what a John Doe lawsuit is? I will explain this unusual tool of legal chicanery that we know works in the USA. Let us say you are a large billion dollar corporation and you feel you have been harmed in some way but are not able to identify the party or parties responsible for the tortuous act. Say someone has been violating copyright protected material of yours by distributing it for free or for gain. You file a lawsuit in Federal Court against John Does 1–99 stating that you will identify the actual defendants, as their identities are uncovered in the course of discovery. You send a law clerk down to the courthouse and he has the court clerk officially stamp the lawsuit and now this lawsuit is live. OK now you have the subpoena power of the federal court at your disposal and there is no opposing counsel to block your subpoenas and depositions. There is no opposing counsel because the people you are suing have no idea they are going to be sued and you are not yet sure who they are or if you can even sue them yet. So you go about your merry way issuing subpoenas for bank accounts, phone records, stock brokerage accounts, insurance records, internet records (like every website they ever visited, all email sent – yes the big ISP’s there keep copies of all this forever), credit card bills, email accounts, etc. all very lawful USA subpoenas and the judge has no idea you are issuing these subpoenas unless he decides to read the files (not likely with no opposition) and there is no opposing counsel to fight to protect the privacy of the records on behalf of their client. The company receiving the subpoena has no obligation in the USA to let the customer (think phone, bank, credit card, credit bureaus, or internet records) know that a subpoena has been served on them requesting your records. They prefer not to tell you so they do not get caught up in a fight over the records and then they may have to retain their own lawyer and run up a bill. If it is a lawful subpoena they can just submit to it and have no liability unless there is some sort of agreement in place to notify you or protect your privacy, which would be most rare. The lawyer might even take a few witness depositions to get the facts explained in more detail. The judge need not individually approve these subpoenas for them to be valid. Normally subpoena copies are sent to the opposing counsel who can make a motion to block or limit them called a protective order. Here with a John Doe lawsuit there is no opposing counsel to get in the way of the plaintiff who can run amuck using the power of the court to get all sorts of records violating the privacy of countless people without their knowledge. What a great tool if you are an unscrupulous lawyer. By the way this tool could be used against you at any time to get your bank records, phone records, internet records, email copies, credit card bills etc all without your knowledge lawfully. This probably does not make you feel warm and mushy inside about having assets in the USA. So basically you don't even need to sue a real person or corporation to get to use the subpoena power of the mighty US Federal Courts. This works best in the Federal Courts by the way but could be applied to some state and local courts. Remember the entity being served with the subpoena like the bank or stock broker has no obligation to tell you the owner of the bank account that a subpoena was served on them for your records and they could even be ordered to keep their mouth shut so as to prevent flight with the assets. Another fine example of the sheer lack of privacy and asset protection laws in the USA whereby a stranger can examine your bank records based on a lawsuit with nobody. If you haven't thought of it consider what happens to your bank records after the opposing law firm has lawfully obtained them. Can they enter them as evidence into the lawsuit and thus make them public record? Sure. They enter them as evidence and file the copies of the bank records, phone bills, internet records like all your emails, every website the logs show you visited, credit card bills, stockbroker records all in the courthouse into the file. This file is a lawsuit against no one but still they got it into the public records where it could be picked up and put on the Internet, in newspapers etc. Once the information gets into the public domain anyone can use it lawfully, yes even law enforcement agencies for criminal prosecutions. Can they share this information with others? Good question to ask yourself now, not after something like this happens to you. Defendants Fight Back – To illustrate the absurdity of their civil court system gone amuck we will site some unethical tactics that defendants use against the big law firms and Judges who favor the big firms. Recusing Sovereign Capital Protection's List of Products and Services – A recusal is a court action where you motion the judge to remove themselves for some reason usually pertaining to his bias or lack of objectivity (prejudicial) in the case. The motion must be presented to the judge at first. A judge will rarely recuse himself or herself. If they know one of the parties in their private life they would probably recuse themselves. Appellate courts are slow to reverse a judge who refuses to recuse himself unless there is overwhelming evidence. An example would be he was once married to one of the parties in the case. So if the big slick law firm got a judge for a reason then you can recuse the judge if you have grounds, which is rare. What is done is the defendant files a lawsuit against the judge, which now gives objective grounds for a recusal and then asks the judge to recuse himself. The judge may get mad and try to get a summary judgment dismissing the case but then again you and the judge were still adversaries in a lawsuit and recusal is proper and if the judge refused the appellate court would probably grant the recusal. Suing the Opposing Counsel – In this scenario one side starts personal lawsuits against the opposing counsel. This lets them take depositions and is mostly to harass the lawyers. Sometimes they even sue the wife and relatives of the lawyers. A dangerous and expensive game reserved for wealthy people but it does go on. This illustrates the actual absurdity of the court systems in that country. Locking the Other Side Out From Decent Counsel – If you live in a small town this can work. Lets say it is a divorce case. Before filing for divorce go visit all the competent divorce lawyers in the city. Have a paid consultation with them to discuss the case. Explain some non–essential particulars to them and make sure you take notes at the meeting. Then when the other party to the divorce finds out they are being divorced they go out and look for a good lawyer and find out you have created a conflict of interest with all the experienced lawyers in the area. This drives them to go out of town. The out of town lawyer will generally as a rule do worse in court than a local lawyer who knows the judges and how they like to run their courtroom. Again another manifestation of a judicial system run out of control by aggressive lawyers. USA Trusts and USA Corporations – I know one can argue that their USA trust or corporation is not responsible for personal debts and there are court cases to back this up. Then inquire as to how much money it is going to cost you to defend the asset protection strategy against aggressive collection lawyers who know just how to make it real expensive for you to defend against them so as to bring about a painfully expensive settlement. Unless you have many millions it will not be cost effective to fight. It is a legal jungle in the USA and we cannot see any daylight in trying to protect assets in the USA using any USA based vehicle including trusts, corporations, foundations etc. USA Real Estate Asset Protection – We get calls constantly from people who want to change the title of real estate from their own name into the name of a Panama Corporation or Foundation to shelter the asset from litigation. This can be done but is probably not going to accomplish too much in terms of asset protection unless the other side is sloppy, careless and does not have much money to spend. The lawyers pursuing you will be curious that you no longer own a house you live in that you used to own. They will find out about it from credit reports, public record checks, having private detectives talk to neighbors, and other means. Then they will ask you if you sold the house? If so where are the sale proceeds, where was the escrow etc. They will smell a rat and eventually will ask you questions in deposition and then go to the judge and ask the judge to set the transfer aside as a fraudulent transfer in that the property was not really sold it was just a straw man transaction to avoid creditors attaching the asset and also stick you with the additional legal expense they incurred setting the transaction aside. The judge may want to hear from the Panama Corporation before he sets the transfer aside but that isn’t going to do much good unless there is an actual escrow and real money changed hands and then they are going to ask you where the money you got from the sale is now. |