According to the New York Law Journal, yesterday, a Brooklyn jury convicted former Brooklyn prosecutor, John Headley, of fraud and misconduct over his misuse of New York City Transit Authority funds. Headley’s company, Advance I.M.E. Co., was hired by the transit authority to obtain medical records and expert witnesses for the authority. However, Headley did not reveal that he was the principal in Advance I.M.E. Co. Rather, he used the name James Douglas to get around inevitable conflicts of interest he had in taking on the work–he was dating the transit authority employee responsible for selecting and paying vendors and he also worked as outside counsel to the transit authority on other matters.
So what was Headley’s defense? He claimed that he masked his ownership in the company to hide assets from his wife in their then-imminent divorce proceedings rather than to bilk the transit authority out of money. We haven’t seen this type of defense before—usually people don’t want to admit to hiding assets from their spouse. Given his conviction on six counts, the jury may not have bought it.
If, indeed, Headley was hiding assets from his wife at the time of their divorce, hopefully she was hip enough to his tricks to hire an investigator. We frequently help our married clients uncover hidden assets and it is not uncommon for one spouse to hide money in a secret company as Headley claims he did. Using proprietary databases and other resources, we regularly find secret companies, unknown to one spouse, and position our clients to get all the information they need in discovery.
We also help clients find company affiliation information by using databases and individual secretary of state records, among other means. In this case, it does not appear that “Advance I.M.E. Co.” is registered to do business in New York, however, the indictment indicates that “Advance I.M.E. Co.” may be a fictitious name for Headley’s company. It states that Headley opened a business checking account at Bank of America in the name of “DBA Advance I.M.E., Co.” We often find evidence of fictitious names in our databases and run searches at the county level to determine a company’s true legal name. Had there been some form of vendor verification or approval process, outside of the purview of Headley’s transit authority girlfriend, a few quick searches might have revealed that Headley was the principal of the company.