Inter Press Service (IPS) – Feb 3, 2010
The global bank HSBC may be running offshore accounts for central banks. According to a U.S. Senate investigation, an HSBC subsidiary in London called HSBC Equator Bank had a sister bank in the Bahamas.
According to an internal e-mail, the bank told HSBC USA it had been providing offshore accounts to central banks for 20 years, because the banks wanted to avoid “Mareva” injunctions, legally enforceable orders to freeze funds.
Jan 20, 2010 –
In September 2004, David Beringer, the tax director of the $20-billion Noble Group based in Hong Kong, wrote a memo to company officials expressing concern that if Swiss officials discovered that employees of a Swiss subsidiary were doing work for a company that claimed to be operating out of Bermuda, the subsidiary might have to pay Swiss taxes.
This story has not been reported before.
He said, “In the disclosure to the Swiss tax authorities we have not advised that personnel working in Switzerland conclude NIL’s contracts for fees for products structure and portfolio performance; and NIL’s intermediary agreements.” NIL was a Bermuda shell company called Noble Investments Ltd.
The document was provided by Rudolf Elmer (shown here), a German who worked for Noble Investments SA, Zurich (NISA), a hedge fund consultant, as operations manager from June 2003 to October 1, 2005.
January 20, 2010 | Posted in
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Scoops,
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Inter Press Service (IPS), July 14, 2009 – At a recent conference in Miami organised by Offshore Alert, a specialised media organisation focused on financial crime, IPS sat down with veteran investigator Bob Roach to discuss the hurdles facing regulators trying to crack down on tax havens, which cost the U.S. alone an estimated 100 billion dollars annually.
State aided suspect in huge swindle
Miami Herald, July 5, 2009 –
Years before his banking empire was shut down in a massive fraud case, Allen Stanford swept into Florida with a bold plan: entice Latin Americans to pour millions into his ventures — in secrecy.
From a bayfront office in Miami in 1998, he planned to sell investments to customers and send their money to Antigua.
But to pull it off, he needed unprecedented help from an unlikely ally: The state of Florida would have to grant him the right to move vast amounts of money offshore — without reporting a penny to regulators. He got it.
Inter Press Service (IPS), May 8, 2009
– Jeffrey Owens, the tax “point person” of the Organisation for Economic Cooperation and Development (OECD), was stung by activist critics of the OECD standards under which countries will be put on a tax haven blacklist and targeted for sanctions.
The blacklist was announced last month at the London meeting of the G20, which said in a communiqué that it would “take action against non-cooperative jurisdictions, including tax havens…to deploy sanctions to protect our public finances and financial systems.”
Key civil society criticisms are that the OECD standards require bilateral agreements for information on request, not automatic multilateral tax information exchange; that they call for only 12 such agreements to be signed by each tax haven; and that getting off the blacklist entails only promises, which have not been kept by tax havens in the past.
Inter Press Service (IPS), April 30, 2009 – The U.S. Internal Revenue Service (IRS) is hitting pay dirt with a novel legal tactic designed to catch tax evaders. And it’s going to use it to force international banks to give up the names of tax cheats. It’s called the “John Doe” summons. Using “John Doe” means the IRS doesn’t know the names of the suspected tax evaders. So it sends a summons to a bank or credit card company that says, “Give us the names and account information of all your U.S. clients with secret offshore accounts.” Daniel Reeves, an IRS agent in charge of the tax agency’s offshore compliance initiative, afforded an unusual look into the broad swath of projects that seek tax-cheating “John Doe’s” every place from accounts of the giant Swiss bank UBS to the records of Pay Pal.
Inter Press Service (IPS), March 29, 2009 –
This could be the moment when a fatal blow is delivered to the world’s tax havens. Or it could be another largely cosmetic change that allows offshore financial centres such as Switzerland, the Cayman Islands and Liechtenstein to deflect attacks on the system by sacrificing the few tax miscreants that governments catch in their nets.
Decisions at the G20 government leaders meeting in London Apr. 2 will set the direction.
Offshore centres, worried what may happen in London, are falling all over themselves promising to cooperate with the major powers on the trail of tax cheats. But the holes in the tax havens’ promises are as big as those in Switzerland’s famous cheese.
Many believe that automatic exchange of information is the only really effective way to end pandemic tax evasion. Some very good proposals are made in a leaked French paper which is linked to the full story.
AlterNet, March 26, 2009 –
Congress has deftly avoided the real story of AIG’s collapse, which will make a few million in bonuses seem like peanuts.
Most legislators at a House Finance subcommittee hearing last week deftly avoided the real story of AIG’s collapse. Instead, they homed in on the public relations disaster of hundreds of top AIG officials and staff getting $165 million (later revealed as over $218 million) in bonuses.
The key issue ignored by the congressmen and women was the potential catastrophe represented by as much as $2.7 trillion in AIG derivative contracts and how AIG and the U.S. government are dealing with them. To put that number in context, we’ve so far provided the company only about $170 billion.
Feb 11, 2009 –
The U.S. government might finally get a powerful tool against offshore tax evasion by mega-wealthy individuals and corporations. The worst most miscreants face now is negotiated pay-ups years after they are caught.
A bill introduced last week by Senators Patrick Leahy (D-Vermont) and Chuck Grassley (R-Iowa) would make tax evasion using international transfers a criminal money-laundering offense.
The law aims at cases in which money passes through tax havens. It targets not just the evaded taxes, but any money that is part of the scam.
Feb 8, 2009 –
At a time when New York State’s budget is reeling from Wall Street tax losses — Wall Street pays 20 to 30 percent of revenues — you’d think Governor David Paterson would want to recoup all the evaded taxes he could get. That doesn’t seem to be the case when it comes to corporations that launder their profits offshore.
Paterson refused to deal with the issue and instead answered a question I hadn’t asked. I wonder why. Does that mean he won’t go after corporate tax evaders? Here is the exchange from the Council’s transcript of David Patterson meeting.
Inter Press Service (IPS), Feb 5, 2009 –
President Barack Obama said he would crack down on firms that use offshore centres to evade taxes. He could begin with a New York subsidiary of one of the world’s largest private banks, which used a Cayman Islands company to shift its profits.
Why would a New York investment fund manager run operations through an office in the Caymans? “This type of structure is for optimising taxes,” explained Max Obrist, a Cayman Islands official of the global Julius Baer Group (Zurich).
He told IPS that “generating” the income where a company was actually based, “you would pay much more taxes”. Obrist was describing a company shifting claimed earnings to tax havens to evade home taxes. He allegedly helped Julius Baer Investment Management (JBIM) New York do just that.
Inter Press Service (IPS), Jan 19, 2009 –
U.S. senators at Timothy Geithner’s confirmation hearing for Treasury Secretary Wednesday may want to ask him about a failure to act that is costing the U.S. a lot more than the amount he evaded on taxes.
The Federal Reserve Bank of New York, which he has led since 2003, conducts the operations on Wall Street of the Federal Reserve in Washington, the country’s central bank.
The New York Fed under Geithner’s presidency has failed to stop massive naked short selling of U.S. Treasury bonds that threatens the stability of the market and sale of the bonds.
Ironically, the scam, enabled by a lack of regulation at the behest of Wall Street brokerage houses, makes it more expensive for the U.S. to bail out those same financial institutions.
Evening Standard (London), Jan 6, 2009
Gordon Brown and Barack Obama are both promising to crack down on the use of offshore tax havens. But putting those tough words into practice is another matter.
One of the world’s biggest private wealth management groups circulates funds via offices in the Cayman Islands, claiming they take major investment decisions — when the main work is apparently carried out in London.
With offices in London and across the globe, Swiss-based Julius Baer banking group invests over $300 billion (£208 billion) in assets on behalf of institutions and wealthy individuals. Profits in 2007 were more than $1.1 billion.
In London, one of its units was known as Julius Baer Investors or Julius Baer Investment Management (JBIM) until a management buyout in 2007. It was renamed Augustus Asset Managers, is based in Bevis Marks in the City, and is still 10% owned by Julius Baer.
From London, Augustus controls assets of $12 billion but claims its profits are generated elsewhere, offshore at a Cayman Islands Baer subsidiary called Baer Select Management.
Why? Simple, really. “If you would generate all the income in London, you would pay much more taxes,” acknowledged Max Obrist, a Cayman Islands executive of Julius Baer.
Inter Press Service (IPS), Dec 22, 2008
The financial crisis has the U.S. swirling with charges about the immoral greed of some corporate executives who recklessly bet their companies’ futures to line their own pockets. The popular fix for this international calamity stops at the nation’s borders: decouple top-line salaries and bonuses from stock prices and institute more transparency and regulation.
However, last month, the Vatican, in a groundbreaking statement, linked the financial crisis to a much deeper problem largely ignored in discussions of the crisis here. It underlined the need to consider carefully “the hidden but crucial role of the offshore financial system in light of the emergence of the global financial crisis”.
The Vatican now gets it, but U.S. corporations don’t. The U.S.-based multinationals that signed on to yet another ethics pledge included General Electric, The Hartford, Pepsi, Wal-Mart, Accenture, Dell, and United Airlines. Their ethics, according to their pledge, does not include rejecting the use of the offshore system to evade regulation as well as taxes.
Inter Press Service (IPS) Dec 19, 2008
American International Group (AIG) operated a captive insurance scam that involved fraudulent use of offshore tax havens. Currently, the U.S. government has invested over $40 billion in AIG, with the U.S. getting nearly 80 percent of its stock. 
This puts the U.S. in a unique position to investigate the internal operations of a giant corporation with a reputation for using the offshore system for tax evasion.
U.S. authorities could begin their investigations with a look into a very curious practice that was revealed 15 years ago in a case that was never exposed by the mainstream press and which insurance insiders say is endemic.
AIG would keep a portion of a client’s inflated insurance premium and send the rest to the client’s offshore reinsurance company. AIG would earn a higher commission. The client would write off the entire amount as a business expense and enjoy the extra cash offshore, tax free.
This story tells how notorious fraudster Victor Posner made an AIG deal to stash reinsurance profits in Bermuda.
December 19, 2008 | Posted in
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Oct 6, 2008
From alleged kickbacks to Aristide to a company that’s tanking.
Jim Courter, the former New Jersey Republican Congressman who quit as a McCain national finance co-chair after IDT, the global telecommunications company he heads, was fined $1.3 million by the Federal Communications Commission, now has much bigger problems. IDT announced Friday that Courter will quit the company. IDT’s filing with the SEC the same day shows the company in a free fall. Its stock is tanking, and the New York Stock Exchange has threatened to delist it.
The FCC fine imposed for IDT’s failure to file its contract with Haiti was first reported by the author in July. The contract revealed that IDT was sending Haiti fees to a Turks & Caicos shell company instead of to a Haiti Teleco account. A whistleblower charged kickbacks.
The company said Courter would leave as CEO when his contract expires next October. In the meantime, his 2009 salary will be paid entirely in stock, which he cannot cash in till his departure. That could mean paltry pickings. IDT stock has fallen to 69 cents from more than $24 in 2004 and $1.93 in June.
IDT could be in for some more trouble with the FCC if a new administration decides to enforce its regulations. According to FCC responses to Freedom of Information Act requests, IDT has never filed its contracts with any of the 140 major international carriers to which it claims to supply service. This violation could bring fines of $7,000 a day for each case, but the agency has given the company a pass on obeying its rules.
Inter Press Service (IPS), July 18, 2008
It sounded like the plot of an action thriller. A U.S. Senate subcommittee held hearings Thursday on how UBS/Switzerland, the world’s largest private bank, and LGT (Liechtenstein Global Trust), owned by the royal family of that micro-tax-haven state, organised complex tax evasion schemes for U.S. clients, and used spy-type tactics to avoid being detected.
LGT bankers allegedly used code names and public phones instead of making calls that could be traced. UBS agents carried encrypted laptops and business cards that didn’t mention they were in the “wealth management” division. According to testimony and records, both banks took care to disguise their activities because moving and hiding the money of tax evaders and other criminals is very lucrative, bringing hundreds of millions of dollars in profits.
Condé Nast Portfolio, July 16, 2008
Code names, secretive European royalty, encrypted computers. A spy novel? Nope. Nope. It’s how two European banks helped rich Americans duck the taxman, a Senate probe found.
The Newport regatta has always drawn America’s moneyed class, and the Art Basel show in Miami is hot on the nouveau riche circuit—making both glitzy venues ideal for financial giants to prospect for new clients.
But UBS, one of the world’s largest banks, had another goal in mind when it shelled out money for the UBS Regatta Cup in Newport or the Art Basel Art Fair in Miami, or performances in major U.S. cities by the UBS Vervier Orchestra.
Condé Nast Portfolio, July 15, 2008
Jim Courter, one of Senator John McCain’s top fundraisers, has resigned from the McCain campaign just days after Lucy Komisar reported on portfolio.com that Courter’s company had been fined by regulators.
The Federal Communications Commission last week levied a fine of $1.3 million against IDT, a New Jersey telecommunications company headed by Courter, for failing to disclose its 2003-04 long-distance phone agreements with Haiti.
Condé Nast Portfolio, July 11, 2008
The FCC hits James Courter’s IDT with a $1.3M fine for a cloudy deal in Haiti.
IDT, the New Jersey telecommunications outfit run by one of John McCain’s top fundraisers, Jim Courter, was fined $1.3 million by the Federal Communications Commission for failing to file a contract for telephone service to Haiti in 2004.
Courter, a former New Jersey Republican congressman, is one of 20 McCain national finance co-chairs, and joined the campaign in February 2007. He’s a “Trailblazer” for McCain, meaning he raised at least $100,000. The IDT PAC has contributed $84,850 in 2008.
IDT’s work with Haiti has been put under scrutiny since a former employee, Michael Jewett, then IDT’s manager for the Caribbean, sued the company. His suit claims he was fired when he balked at negotiating a scheme that routed a portion of the company’s long distance revenue from Haiti calls to a shell company, Mount Salem in the Turks & Caicos, which he was told was owned by then-president Jean-Bertrand Aristide.
March 26, 2008 –
Lawrence Summers spoke at the Council on Foreign Relations last week and was a bit uncomfortable about my question regarding Clinton administration anti-money-laundering policy.
I pointed out that Treasury Secretary Robert Rubin (who happens to be one of the Council’s co-chairs) had not acted against money-laundering because he didn’t want to stop the free flow of cash into the US – in effect, into Wall Street. But when Summers succeeded Rubin in the job, he had taken action.
The facts are important because Rubin is poised to move into a Democratic administration — especially if Clinton wins — as a high-level Wall Street influential.
March 10, 2008
It’s not just about buying or selling sex. It’s also about money 
laundering. New York Governor Eliot Spitzer’s downfall began with an investigation by the Internal Revenue Service. That’s because when people move money for illicit purposes, they try to disguise the flows. And US banks are required to report suspicious transfers to the Treasury Department.
The IRS gets involved, because those transfers could be effected to hide income from taxes. So it responded to bank reports of suspicious transfers by Spitzer, who was paying thousands of dollars for call girl services. The money was being sent to QAT consulting, a shell company owned by the Emperor’s Club V.I.P. prostitution ring.
Then the FBI joined the United States Internal Revenue Service-Criminal Investigative Division, looking into what appeared to be at first possible government corruption but then turned out to be payments to an organization running prostitution. And also laundering money in the United States and Europe.
March 10, 2008 | Posted in
Blog,
offshore |
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March 3, 2008
Tony Defries, the rock manager who launched David Bowie and who takes credit for managing, marketing and branding such rock stars as Lou Reed and John Mellencamp as well as being “present at the birth of Madonna [and] the reincarnation of Stevie Wonder,” might be making some headlines of his own soon. (He is shown here in 1972 with Bowie’s wife Angie on his right.)
The ex-impresario, a Brit who now lives in Los Angeles and who for a promoter is unaccountably interview- and camera-shy, was one of the beneficiaries of a fake annuity scheme organized by a Swiss bank and its partner, a pseudo insurance company whose main product seems to be tax evasion. But the “benefit” turned out to be a disaster.
Dec 1, 2007
When there’s a financial crisis tied to lack of transparency, follow the culprits offshore. Evidence comes out now that this is true about the subprime debacle.
Reuters reports that a German bank is implementing “accounting changes including consolidation of an offshore conduit whose soured investments triggered a government-led rescue.” The offshore operation was set up to invest in subprime mortgages.
Pam Martens in Counterpunch points out that, “Citigroup, is discovered to have stashed away over $80 billion of Byzantine securities off its balance sheet in secretive Cayman Islands vehicles with an impenetrable curtain around them.”
Among those securities count subprimes. Citigroup has $55 billion of subprime exposure and in November said it would write down up to $11 billion in subprime losses. Goldman Sachs said that won’t be all, that the bank may have to write off $15 billion.
Oct 23, 2007 – In the continuing saga of the Frigates of Taiwan, involving about $1 billion in bribes and kickbacks paid by the French company Thomson to win a bid on the sale of six war frigates to Taiwan in the early 90s, I asked French Finance Minister Christine Lagarde, at the Council on Foreign Relations yesterday, if she would continue the cover-up on a corruption case that could be the largest (known) in French history.
Madame Lagarde wasn’t “sufficiently aware” of the case that has been exhaustively reported by French print and broadcast media for more than a decade.
