OffshoreAlert
Daily news, documents and intelligence about Offshore Financial Centers and those who conduct business in them that you will not find anywhere else.

On 2013, an Extraordinary Year for Offshore Tax Enforcement

  There was a time when offshore financial secrecy laws were ironclad and impenetrable. Some used those laws to engage in legitimate financial activities directed at investing, increasing wealth and facilitating international trade, but many others used them to hide the proceeds of illegal activities, disguise the ownership of personal assets and, more often than not, avoid or evade payment of required taxes.   This really wasn’t anything new.  In a letter to U.S. President Franklin D. Roosevelt in May of 1937, then Secretary of the Treasury Henry Morgenthau, Jr. described one of...

On Correspondent Bank Accounts ... the Achilles Heel of Offshore Banking

  If you blinked, you probably missed the news.  On January 29, 2013, a federal judge sitting in New York City authorized the IRS to issue a John Doe summons to UBS AG in Stamford, Connecticut for the correspondent bank records of Wegelin Bank of Switzerland and at least two other Swiss banks that nested their correspondent accounts with Wegelin.  Only a few media outlets thought it newsworthy enough to report the event, apparently seeing it as merely the next step in the Wegelin case … just another bump in the road.  Those that did report the story covered it primarily as further...

On Wegelin Bank Pleading Guilty to Criminal Charges of Tax Evasion and What it Means

There was a time when offshore financial secrecy was an absolute.  It didn’t matter if you were a dictator plundering the wealth of your own nation, an illegal arms dealer, a money launderer, a corrupt politician, a trafficker in human lives or simply a tax evader … what happened in a financial secrecy jurisdiction stayed in the financial secrecy jurisdiction.  Nowhere was that more sacrosanct than in Switzerland, a great nation made up of a great peoples that had embraced hundreds of years of absolute financial secrecy as a rich national tradition … and then there was UBS.  In...

On Whistleblowers and What Really Motivates Them

I interviewed many offshore whistleblowers and potential whistleblowers during my time with the IRS, some high profile and some known only to the IRS and myself.  It’s always surprised me how many people think whistleblowing is only about the money.  In fact, I’ve attended conferences, including the OffshoreAlert conference, where regulators, attorneys and subject matter experts talked exclusively about the money … how much can be received, how much has been paid out to date and even how much could be in it for you.  While money is certainly a big motivator for all of us, when it...

On Bradley Birkenfeld’s $104 Million Whistleblower Award

I first met Bradley Birkenfeld on October 12, 2007.  By law, the only thing I can say about that meeting and what followed is what has been included in the declarations I filed in federal court in support of the IRS petition seeking permission to issue a John Doe summons to UBS AG of Switzerland and the subsequent petition seeking a court order to enforce the summons. Since that day, much has changed in the world of offshore financial secrecy and Swiss bank secrecy in particular.  What was once thought of as an impenetrable wall of financial secrecy has been pierced and is now...

On Blogging for OffshoreAlert

After 35 years of service I decided to retire from the Internal Revenue Service effective June 30. 2012.  During that time, I was fortunate to have worked on many interesting matters, led some of IRS’s highest profile anti-money laundering and offshore tax investigations and worked with and for some of the brightest, most talented and dedicated civil servants in the United States government. In the 1990s, I led the first anti-money laundering investigations into the casino gambling industry under the Bank Secrecy Act, worked closely with the Financial Crimes Enforcement Network...

OPSEC for Offshore

Part and parcel of working with financial professionals in multiple jurisdictions is a modicum of privacy.  Privacy in life choices, privacy in  investment choices, and privacy - no secrecy - when it comes to making strategic investment choices.   Yes I said secrecy - if money center banks and trust company can refuse to produce their internal methods of analysis and risk weighting on investment choices because it is a Trade Secret and a proprietary art, we must take the very same stance to preserve our investment knowledge advantage.  After all the value of a trade secret is that...

Draft BVI Business Companies (Amendment) Bill 2011

In June 2011, the FSC released for consultation a draft Bill (the “BVI Business Companies (Amendment) Bill 2011”) containing a number of mainly “housekeeping” amendments to the BC Act, along with draft Regulations (the “BVI Business Companies Regulations, 2011”). The proposed changes have already gone through a consultation process, and cover matters including the introduction of not-for-profit companies, and a framework for the use of foreign character names and the re-use of former company names. At the current time, there is no indication when a Bill will be introduced, but it...

The BVI's Aircraft Mortgage Registration System

  A recent legislative highlighting the increasing sophistication of the BVI as a financial centre is the Mortgaging of Aircraft and Aircraft Engines Act 2011. This new Act  follows on from the first aircraft registering in the BVI three years ago.    The objective behind this new law is for the BVI to be a leading aircraft registration jurisdiction by enabling the registration of charges over BVI-registered aircraft and aircraft engines owned by BVI incorporated companies. This reform is considered to be a significant development as banks and other financial services prefer lending to...

A Burning Hole In AML

Bankers and other financial institutions, in an effort to comply with worldwide anti-money-laundering efforts, continue their search for the elusive "Politically Exposed Person," aka, the PEP.  What is a Politically Exposed Person?  The answer to that can be a little tricky.  The best working definition I have is -- inadequate.   A PEP is a person, by and or through their employment or elected position, has the ability to influence policy and purchasing choices by that or other government entities.    All PEPs must be identified by financial institutions in order to be in...

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