How offshore havens let financial schemers hide their gains
of offshore havensProbe of huge data trove shows financial schemers, not just legitimate investors, use tax havens, where they conceal their gains, making it hard for investigators to pierce web of firms and accounts
A New York hedge fund manager allegedly swindles US$12 million from a prominent Baltimore family. A couple in the state of Indiana is accused of cheating hundreds of customers by charging for free trials of cosmetic products. A financial manager in Texas promises 23 per cent returns but absconds with US$33.5 million of investors' money.
The existence of the trusts surfaced during an examination of the offshore world by The Washington Post and the International Consortium of Investigative Journalists, a non-profit news organisation. ICIJ obtained 2.5 million records of more than 120,000 companies and trusts created by two offshore companies, Commonwealth Trust (CTL) in the British Virgin Islands and Portcullis TrustNet, which operates mostly in Asia and the Cook Islands. The records were obtained by Gerard Ryle, ICIJ's director, in an investigation he conducted in Australia.
Many people use the offshore world for legitimate purposes, for legal tax shelters or to smooth the way for international trade.
But the records expose how havens in the South Pacific and Caribbean in some cases have become sanctuaries for individuals seeking to conceal their activities from investigators and investors.
Among the 4,000 American individuals listed in the records, at least 30 have been accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct.
They include billionaire hedge fund manager Raj Rajaratnam, convicted in 2011 in one of the biggest insider trading scandals in American history, and Paul Bilzerian, one of the most famed corporate raiders of the 1980s, who was convicted of securities fraud.