How To Hide A Billion Dollars: Three Techniques The Ultrarich Use To Dodge Ex-Spouses, The Taxman And Disgruntled Business Partners

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How to hide a billion dollars: 3 techniques the ultra-rich use to dodge ex-spouses, the taxman and disgruntled business partners

At 81, high-frequency trading pioneer Ed Bosarge is in court battling ex-business partners, the founder of a stem cell clinic of which he took control and the wife he dumped. She says he’s got billions stashed in a constantly changing array of offshore and South Dakota trusts.

“This is a women’s rights issue,” says Cynthia Cole, a protester who is also a local official with the American Federation of State, County and Municipal Employees. “He’s getting older, he’s got a new pony,” she says, “and he doesn’t want to appreciate who got him here.” In a deposition taken late last year Bosarge disclosed he is the beneficiary of South Dakota trusts holding $800 million in appraised assets and $280 million in cash. And he likely has even more socked away in trusts in the Bahamas, the British Virgin Islands and Malta, Marie and her lawyers believe.

Marie contends that the compounding value of Ed’s hard work—accrued for years inside African Tudor—was really community property. That’s crucial, because all the subsequent trusts were apparently seeded by African Tudor assets. According to court documents, in 2001, with cash flows from Quantlab ramping up, all the assets of African Tudor were apparently transferred, by Rattay, into two new trusts she settled, the North Boulevard Trust and the MAS Trust .

While trusts paid the expense of his businesses and an increasingly lavish personal lifestyle, Bosarge showed comparatively modest income on his personal tax returns—or at least a purported copy of the couple’s 2014 joint tax return shows $1.67 million in gross income. When he did need cash, Ed explained in a deposition, he would get “replenished” via a distribution from one of the trusts. Ed said he instructed trust employees to keep $200,000 in cash in safes at his various properties.

Such lack of transparency is key to the effectiveness of asset protection trusts. “It’s proprietary. You’re not allowed to know,” Marie’s attorney Bucky Allshouse complained in a hearing this past February. “We don’t know what assets went in there and whether they’re contributing community assets or separate assets or whether they were there from the very beginning,” he said. “It’s their burden to prove it’s separate property. They haven’t done it.

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