Disclosure of Secret Monies May Lead to Tax Problems

05 April 2013 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

Secret offshore banks accounts and shell companies were disclosed with a data leak of an estimated value of TRILLIONS of dollars. The 2.5 million files were released by the International Consortium of Investigative Journalists (ICIJ) which is “an active global network of 160 reporters in more than 60 countries who collaborate on in-depth investigative stories.” The key findings from ICIJ were as follows:

  • Government officials and their families and associates in Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other countries have embraced the use of covert companies and bank accounts.
  • The mega-rich use complex offshore structures to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people.
  • Many of the world’s top’s banks – including UBS, Clariden and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways.
  • A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct.
  • Ponzi schemers and other large-scale fraudsters routinely use offshore havens to pull off their shell games and move their ill-gotten gains.

The NY Times reported that the data was:

…mainly from the British Virgin Islands, the Cook Islands and Singapore, disclose proprietary information about more than 120,000 offshore companies and trusts and nearly 130,000 individuals and agents, including the wealthiest people in more than 170 countries.

The secrecy of the ownership of these monies is not illegal in those countries, but now that this information has been leaked it is possible that government tax authorities around the world may start investigations for tax fraud. Stay Tuned!
 

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