Patrick Arbor, the former chairman of the Chicago Board of Trade involved in an ugly divorce case, acknowledged in court documents that he dodged paying income taxes for 30 years on assets he has outside the United States and only made amends with the government last year after he was prompted by his wife's attorneys.
In court documents, he called the move by her lawyers "blackmail" but that it "took a great burden off my shoulders . . . (which was) there for many, many years." As part of a federal amnesty program, he will pay back taxes for the past eight years, he says.
Mr. Arbor, 75, hasn't responded to requests to talk about the divorce case involving his former wife, Antoinette Vigilante. Howard Rosenfeld, his lawyer, says he doesn't know where his client is. And loyal friends say they're in constant contact with Mr. Arbor by email, but they won't discuss his location. Mr. Arbor told Reuter's he is now an Italian citizen living in Europe.
Attorneys for Ms. Vigilante, 56, suggested in a story in the Chicago Sun-Times, which first wrote about the divorce case, that Mr. Arbor has left the country to avoid paying Ms. Vigilante the $18 million ordered by the court as part of the divorce settlement.
“Mr. Arbor's position is that he hasn't been treated fairly by the court,” says Mr. Rosenfeld, adding that Mr. Arbor is weighing an appeal.
In a 165-page transcript of one of the court hearings, Ms. Vigilante accuses the Chicago businessman of numerous infidelities during their 16-year marriage, and he says she broke into his email and a private safe.
During the hearing, Mr. Arbor accuses Ms. Vigilante's legal team of blackmail and, asked repeatedly whether he had failed to provide the court with a full report of his assets, answers, “Yes.”
Did he have money outside the United States that he hadn't disclosed for 30 years? “Yes,” he answered. Later, he says, he joined an amnesty program to pay back taxes because of Ms. Vigilante's lawyers' "attempt to blackmail me."
The court documents also give a glimpse at how Mr. Arbor has spread his wealth.
Ms. Vigilante, who didn't respond to requests for comment, filed for divorce in 2011, citing irreconcilable differences. A temporary restraining order was issued to keep Mr. Arbor from moving his money. Once that action was removed last year, the Chicago businessman said he withdrew $250,000 from an account in Northern Trust Co.
"He has a right to do whatever he wants with his money," Mr. Rosenfeld told me today.
In the court papers, Mr. Arbor disclosed that he has $13 million in a structured account that's held in a foundation in Lichtenstein but with assets in the Bank of Frey & Co. in Switzerland. (The two countries border each other.)
He also says, in the document, that a safe he had in his Water Tower Place home had $400,000 in gold, worth about $1,700 a piece, as well as $80,000 in Euros and $90,000 in U.S. dollars. He accuses his ex-wife of taking the contents of the safe.
Mr. Arbor's attorneys say information about their client's wealth was obtained unlawfully by Ms. Vigilante, who used her husband's iPhone password to gather information, including that Mr. Arbor did business with Firtus Holding SpA in Switzerland.
Ms. Vigilante testified that “the marriage was dependent on him giving me access to his e-mails and phones because I suffered from a significant amount of infidelity with him.”
During testimony, Mr. Arbor acknowledges using his grandparents' last name of Mazzoni on his Swiss accounts. Her lawyers questioned him about his intent to buy a home outside of the U.S., and he acknowledged looking at properties all over the world, including Italy, Moldova, Kiev, Switzerland, the Ukraine and Panama. He denied he intended to buy.
Mr. Arbor says when he worked at London Investment Trusts earlier in his career, he put $8.5 million in a London bank.
Asked by his lawyer whether he reported that to the federal or state government for income tax purposes, Mr. Arbor said, “I did not, sir, because, as you know, major corporations in the United States like Apple and Google do not report on monies made offshore.”
Mr. Arbor details having to spend extraordinary amounts of money on jewelry for his ex-wife. “She was obsessed,” he said during testimony.
He didn't reveal to her that he had any offshore accounts until he agreed to pay 17,000 euros ($23,000) for a necklace in 2009. They saw it while at a jewelry store in Capri.
He also used money from the Swiss account to pay $2 million to keep a Lake Geneva, Wis., home of his wife's from going into foreclosure, he says in testimony.
Much of the testimony shows Mr. Arbor had created accounts to benefit his children, an adult son and daughter, from his first marriage. He also has adult daughter from another relationship during that first marriage. That daughter went on to model in Playboy magazine.
He also spoke of supporting a sister who was injured in a car accident. Mr. Arbor says for 16 years he has given her $100 a week in an envelope. “I give 52 envelopes with $100 in each envelope, and I give it to her once a year. In addition, I pay all the medical expenses for her.”
For the two children from his first marriage, Mr. Arbor created an account in Panama and bought a $650,000 property at Playa del Carmen in Mexico, the court documents say. That vacation home is part of a high-end resort about an hour from the airport in Cancun.
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