So the Judge told Dr. Bulb that until he could find his money, he could sit in jail. Dr. Bulb was handcuffed, strip searched and locked up in the local jail. In the meantime, Luigi called the lawyer in Nevis and reported the situation. The lawyer in Nevis was able to finally get some information about the account and Luigi reported that to the Trustee. Dr. Bulb was released. But that release was short-lived, the Judge then ordered him held until the money was repatriated. Dr. Bulb spent a week in prison this time. Once the money came in, much to Dr. Bulb’s surprise, it was about 20% higher than when he started. The I.R.S. and the state then amended their filed claims for unpaid taxes including fraud penalties. This meant that the taxes were about 80% of the income earned. The Judge granted their amendment and then, proceeded to divvy up the money. At that point everything Dr. Bulb owned was taken except his house which was mortgaged past the hilt. His reputation suffered, his income was lower, he had been incarcerated and suffered every indignity that such an ordeal offered, and now was penniless.

The doctor went to see Luigi. “Okay, doctor you need to fill out these forms stating your assets in detail”. At that point the doctor mentioned the Trusts that were set up in Alaska and in Nevis. “List those as contingent assets in which you get the benefit of them”. He called the Alaska and Nevis banks to get information on those accounts and the banks told him that they no longer had the funds and wouldn’t tell him where they were. So, wrote down on the schedule, “Assets $900,000 more or less in the Bulb Trusts copies of the trust documents attached, and I am a contingent beneficiary”.

At the 341 Hearing, the attorney for the young girl asked about the Trust assets, Bulb told him the scenario about setting up the trusts and that he had no idea where the money was at this point in time. The U.S. Attorney also asked Dr. Bulb about where the income from the Nevis assets was reported. Dr. Bulb said that it wasn’t because he didn’t know if he earned any income on the account. The Trustee then ordered him to produce more information. He called the banks and they refused to provide the information to him. He then sought out a lawyer in Alaska and a lawyer in Nevis to try and find his money. Each charged him $20,000 to start the search. After a few weeks, each lawyer informed Dim in writing that they couldn’t find the assets. He reported that to Luigi who reported that to the Trustee. The Trustee made a motion with the Court to have Dr. Bulb turn over the assets of the Trust to the Trustee and joined the two banks as defendants. The Alaska Bank appeared and said that under Alaska Law it was not required to divulge the information to the Court. The Bankruptcy Court noting that it had national jurisdiction threatened to lock up the Alaska Bank’s President and Directors, unless he received a report from them. They complied and the Judge required that they turn over the assets to the Trustee which they did. The Nevis Bank never responded.

On behalf of Dr. Bulb, the lawyer offered $27,000 (always make the offer divisible by three – Mailey suggested). After months of discovery, the case went to trial, Judge Break Thebank presiding. Every time, Mailey objected, the objection was denied. After closing argument the jurors were in tears for this young girl who was wheeled into the courtroom like a grotesque statue. Mailey prepped his client for the bad news. “I’m afraid this is going to be a huge verdict against you”. He suggested the Doctor look into Chapter 7 bankruptcy before the verdict was read. Dim called Luigi who told him to wait until the verdict came in and then declare bankruptcy. That way, he wouldn’t need to re-try the case again in Bankruptcy. Of course the jury came in with a verdict of $5,000,000 against Dr. Bulb. The Mailey asked the Judge to set aside the verdict as excessive, but the Judge denied the motion. An appeal was promised. At that point Mailey approached the attorney for the other side and said, his client had no insurance and owned nothing in his own name, and that his income was now reduced and he could always declare bankruptcy to clear the debt. Given those facts, $240,000 was all he could offer. The lawyer talked it over with the family of the brain damaged girl and said he couldn’t settle for less than $1 Million.

About six months later, Dim Bulb was in surgery on a little girl with a brain tumor. Dim Bulb did nothing wrong in the surgery, but the results were not good. The little girl did have some residual paralysis which was permanent. Her parents were livid. Despite warnings given prior to surgery that this might occur and consents received, the parents decided to sue Dr. Bulb for malpractice.

Dr. Bulb went to a noted malpractice defense lawyer Glee Mailey, who told Bulb that he had a good case but it would be expensive to try, but would he consider settling. Bulb said, not for much because I don’t have anything and then cursed about money grubbing lawyers. At that point the lawyer informed Bulb what his retainer would be about $100,000. Bulb notified the Nevis Bank that he was being sued as well as the Alaska Bank. The result was that he stopped receiving statements concerning his account holdings with them. He did charge $100,000 on his VISA card with the Nevis Bank for the retainer and the charge was paid. He then received a letter, telling him that after that payment his limit was now $50,000. This troubled Dim, but he figured it was for his own good and the money would be there down the road. It also meant that he had no clue how much income he had earned on the account. His accountant told him that the income was taxable in the United States, but he didn’t have sufficient facts to pay the taxes, so he went ahead and filed the returns without listing the income from these assets, nor filling out the Financial Control Form required by the Treasury Department since he didn’t at this point know where his money actually was.

Dr. Bulb’s financial advisor, Clem Cudchewer, told him about setting up an Asset Protection Trust with some bank, he’d never heard of in Alaska. He received a really nice brochure from the Bank touting its services and his advisor told him that since he wouldn’t control the money (except to direct how it was invested), it was safe from creditors. He called his lawyer, Luigi Linguini. Luigi was concerned about whether a Domestic Trust would provide him all the protection he needed. So, he advised Dim to also set up a Foreign Asset Protection Trust with a bank in Nevis (a place Dim had never heard of before). Luigi and Clem arranged for Dim to sign the paperwork and forward the money to Nevis and Alaska. There were some vague promises about saving taxes as well, but Dim didn’t understand any of this since, he was focused on being a good Doctor and left these other issues up to professionals. He let his malpractice coverage lapse.

After the funds were received in Nevis, Congress passed the Foreign Compliance Tax Account Act of 2009 which required Banks which had any nexus with the United States to report income and expenses on the accounts of any US taxpayers.