PathWalker
5th April 2013, 07:45
http://www.moneynews.com/FinanceNews/offshore-tax-haven-ICIJ/2013/04/04/id/497879
Unmasked: The Secret World of Offshore Tax Havens
Although the mega-rich and influential often use complex offshore havens to hide assets, own yachts and art masterpieces and avoid taxes — often with the help of some of the world’s biggest banks — lower-income individuals also use offshore accounts, a new study from the Washington, D.C.-based International Consortium of Investigative Journalists (ICIJ) reveals.
The ICIJ, in conjunction with a group of investigative journalists, cataloged a smorgasbord of shady dealings by the wealthy and others — including government officials — in an exhaustive 15-month investigation.
In all, 86 journalists from 46 nations used high-tech data to sift through millions of leaked documents going back decades.
Caught up in the net of the tax shelters are American doctors and dentists, Wall Street swindlers, Russian executives, international arms dealers and families of despots, among others.
“We already knew how secret and inaccessible the offshore industry is, but we were surprised by now vast and far-reaching it is,” said Gerard Ryle, director of the ICIJ.
"We expected to find only the mega rich using [offshore accounts]," he told CNNMoney. "But in fact we found it was being used by a much broader section of society."
The exhaustive effort “sheds new light on the methods used to deceive fiscal authorities and hide money,” German magazine Spiegel stated.
According to CNNMoney, the hidden accounts included proceeds from Ponzi schemes and money drained from nations’ coffers, with the cross-border proceeds as high as $1.6 trillion annually.
“I’ve never seen anything like this. This secret world has finally been revealed,” Arthur Cockfield, a law professor at Queen’s University, told the Canadian Broadcasting Corporation.
The ICIJ said about 130,000 people were identified in the documents, many from unnamed sources believed to include banking industry informants.
The list included government officials and their families and associates in Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Canada and Mongolia.
Well-known individuals named included composer Denise Rich, whose ex-husband Marc Rich, a hedge fund boss, was pardoned by then-President Bill Clinton after being prosecuted for tax evasion.
The names of at least 450 wealthy Canadians were identified, including that of high-profile class action lawyer Tony Merchant, according to the Financial Post.
Others included the late German society playboy Gunter Sachs, an ex-husband of actress Brigitte Bardot; Russian oligarch Mikhail Fridman; Imee Marcos, a provincial governor in the Philippines and the eldest daughter of former dictator Ferdinand Marcos; the daughters of Azerbaijani President Ilham Aliyev; and Spanish baroness Carmen Thyssen-Baornemisza, according to Spiegel.
ICIJ said it questioned the deputy speaker of Mongolia's parliament, Bayartsogt Sangajav, about records showing he has an offshore company and a secret Swiss bank account in which he had deposited over $1 million. "I shouldn't have opened that account," he told ICIJ reporters, Spiegel reported. "I probably should consider resigning from my position."
The ICIJ identified some of the world’s top’s banks – including UBS, Clariden and Deutsche Bank – as having aggressively worked to provide their customers with secrecy-cloaked companies in offshore hideaways.
The offshore havens cited included the British Virgin Islands, Cyprus, Cook Islands, Switzerland, Panama and Liechtenstein.
International partners in the ICIJ effort included The Washington Post, BBC, The Guardian, La Nacion, Radio Free Europe, Asahi Shimbun and a long list of others.
“Perhaps most surprising is that much of what we will be revealing over the next few months is perfectly legal,” the ICIJ said in a statement.
“The extreme secrecy offered by tax havens also facilitates the use of anonymous entities to commit crimes, evade taxes, hide assets from creditors and avoid regulations. This secrecy can ultimately undermine democracy by granting a certain class of individuals the ability to play by a different set of rules.”
http://www.globalpost.com/dispatch/news/afp/130404/mysterious-mail-triggers-global-tax-haven-probe
Mysterious mail triggers global tax-haven probe
The cascade of WikiLeaks-style revelations shedding light on the often murky world of offshore tax havens began when Gerard Ryle received a mysterious letter in the post.
The experienced investigative journalist had been busy trying to unravel the details of a large financial fraud in his native Australia when the prospect of an even bigger scoop landed on his doormat.
The letter contained part of a hard drive with the details of 2.5 million digital files, a treasure trove that would ultimately yield information on 120,000 offshore companies and nearly 130,000 individuals.
Ryle, who moved to Washington to head the International Consortium of Investigative Journalists (ICIJ) soon after receiving the hard drive, admits he was not entirely sure what he was dealing with at first.
"My instinct told me it was big but you do not know," Ryle told AFP. Technical impediments also frustrated his early attempts to pore over the information he had received.
"The files were almost impossible to read, they kept crashing my computer," Ryle said. "I've seen a lot of names from all around the world; they were people that meant nothing to me.
"I just did what any reporter would do -- you just go on the Internet and you Google them."
In his capacity as head of the ICIJ, a non-governmental organization founded in 1997 to help co-ordinate the work of reporters seeking to uncover corruption, Ryle set about mobilizing a worldwide army of journalists to help mine the rich seam of information he had received.
"It's always been on my mind to get some help from reporters all around the world," Ryle said. "The ICIJ was the perfect vehicle."
The ICIJ coordinated a 15-month long probe that involved 86 investigative journalists in 46 countries to compile a series of reports it began releasing around the world this week, using a strategy similar to that used by WikiLeaks when it released hundreds of thousands of diplomatic cables in 2010.
So far, the revelations have made waves in several countries, causing embarrassment to French President Francois Hollande's former campaign treasurer Jean-Jacques Augier, as well as the family of the president of Azerbaijan.
Ryle cautioned, however, that many of the individuals brought to his attention by the hard drive may not have broken any laws.
"What you first realize is that you can't accuse people of doing something wrong because you don't have the full story, you don't know what they've declared in taxes," he noted.
"You kept asking yourself: where's the story here? Is it illegal? Your instinct tells you it's a story but you need to find it, you need to look for patterns, for trends."
Recruiting the services of foreign journalists to decipher the information was necessary because of the vast amounts of detail in the hard drive, estimated as being 160 times larger than the cache released by WikiLeaks, totaling some 260 gigabytes of data.
The ICIJ's efforts were also assisted by an Australian software company that provided free software to help make sense of the information in the files.
"I approached the firm and said 'Don't ask me why I need it but can you give it to me?'" Ryle recalled.
He also acknowledged that the sheer scale of the global investigation went against the instincts of many of those journalists involved.
"I wanted to encourage collaboration among journalists, something that we, investigative journalists, normally don't like to do. We like to work on our own and keep our secrets," Ryle said.
Other revelations are set to be released on April 15, while the ICIJ promises further reports later this year.
"We're pretty confident we have a lot more because it's so vast and it takes a long time to understand," Ryle said, adding that he was not concerned about whether the revelations ultimately lead to criminal prosecutions.
"It's not our duty -- our duty is to report and to let other worry about that," he said. "Our job is to inform the public about something they didn't know and what people or authorities do afterwards is up to them."
The disclosure site here:
http://www.icij.org/offshore
Unmasked: The Secret World of Offshore Tax Havens
Although the mega-rich and influential often use complex offshore havens to hide assets, own yachts and art masterpieces and avoid taxes — often with the help of some of the world’s biggest banks — lower-income individuals also use offshore accounts, a new study from the Washington, D.C.-based International Consortium of Investigative Journalists (ICIJ) reveals.
The ICIJ, in conjunction with a group of investigative journalists, cataloged a smorgasbord of shady dealings by the wealthy and others — including government officials — in an exhaustive 15-month investigation.
In all, 86 journalists from 46 nations used high-tech data to sift through millions of leaked documents going back decades.
Caught up in the net of the tax shelters are American doctors and dentists, Wall Street swindlers, Russian executives, international arms dealers and families of despots, among others.
“We already knew how secret and inaccessible the offshore industry is, but we were surprised by now vast and far-reaching it is,” said Gerard Ryle, director of the ICIJ.
"We expected to find only the mega rich using [offshore accounts]," he told CNNMoney. "But in fact we found it was being used by a much broader section of society."
The exhaustive effort “sheds new light on the methods used to deceive fiscal authorities and hide money,” German magazine Spiegel stated.
According to CNNMoney, the hidden accounts included proceeds from Ponzi schemes and money drained from nations’ coffers, with the cross-border proceeds as high as $1.6 trillion annually.
“I’ve never seen anything like this. This secret world has finally been revealed,” Arthur Cockfield, a law professor at Queen’s University, told the Canadian Broadcasting Corporation.
The ICIJ said about 130,000 people were identified in the documents, many from unnamed sources believed to include banking industry informants.
The list included government officials and their families and associates in Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Canada and Mongolia.
Well-known individuals named included composer Denise Rich, whose ex-husband Marc Rich, a hedge fund boss, was pardoned by then-President Bill Clinton after being prosecuted for tax evasion.
The names of at least 450 wealthy Canadians were identified, including that of high-profile class action lawyer Tony Merchant, according to the Financial Post.
Others included the late German society playboy Gunter Sachs, an ex-husband of actress Brigitte Bardot; Russian oligarch Mikhail Fridman; Imee Marcos, a provincial governor in the Philippines and the eldest daughter of former dictator Ferdinand Marcos; the daughters of Azerbaijani President Ilham Aliyev; and Spanish baroness Carmen Thyssen-Baornemisza, according to Spiegel.
ICIJ said it questioned the deputy speaker of Mongolia's parliament, Bayartsogt Sangajav, about records showing he has an offshore company and a secret Swiss bank account in which he had deposited over $1 million. "I shouldn't have opened that account," he told ICIJ reporters, Spiegel reported. "I probably should consider resigning from my position."
The ICIJ identified some of the world’s top’s banks – including UBS, Clariden and Deutsche Bank – as having aggressively worked to provide their customers with secrecy-cloaked companies in offshore hideaways.
The offshore havens cited included the British Virgin Islands, Cyprus, Cook Islands, Switzerland, Panama and Liechtenstein.
International partners in the ICIJ effort included The Washington Post, BBC, The Guardian, La Nacion, Radio Free Europe, Asahi Shimbun and a long list of others.
“Perhaps most surprising is that much of what we will be revealing over the next few months is perfectly legal,” the ICIJ said in a statement.
“The extreme secrecy offered by tax havens also facilitates the use of anonymous entities to commit crimes, evade taxes, hide assets from creditors and avoid regulations. This secrecy can ultimately undermine democracy by granting a certain class of individuals the ability to play by a different set of rules.”
http://www.globalpost.com/dispatch/news/afp/130404/mysterious-mail-triggers-global-tax-haven-probe
Mysterious mail triggers global tax-haven probe
The cascade of WikiLeaks-style revelations shedding light on the often murky world of offshore tax havens began when Gerard Ryle received a mysterious letter in the post.
The experienced investigative journalist had been busy trying to unravel the details of a large financial fraud in his native Australia when the prospect of an even bigger scoop landed on his doormat.
The letter contained part of a hard drive with the details of 2.5 million digital files, a treasure trove that would ultimately yield information on 120,000 offshore companies and nearly 130,000 individuals.
Ryle, who moved to Washington to head the International Consortium of Investigative Journalists (ICIJ) soon after receiving the hard drive, admits he was not entirely sure what he was dealing with at first.
"My instinct told me it was big but you do not know," Ryle told AFP. Technical impediments also frustrated his early attempts to pore over the information he had received.
"The files were almost impossible to read, they kept crashing my computer," Ryle said. "I've seen a lot of names from all around the world; they were people that meant nothing to me.
"I just did what any reporter would do -- you just go on the Internet and you Google them."
In his capacity as head of the ICIJ, a non-governmental organization founded in 1997 to help co-ordinate the work of reporters seeking to uncover corruption, Ryle set about mobilizing a worldwide army of journalists to help mine the rich seam of information he had received.
"It's always been on my mind to get some help from reporters all around the world," Ryle said. "The ICIJ was the perfect vehicle."
The ICIJ coordinated a 15-month long probe that involved 86 investigative journalists in 46 countries to compile a series of reports it began releasing around the world this week, using a strategy similar to that used by WikiLeaks when it released hundreds of thousands of diplomatic cables in 2010.
So far, the revelations have made waves in several countries, causing embarrassment to French President Francois Hollande's former campaign treasurer Jean-Jacques Augier, as well as the family of the president of Azerbaijan.
Ryle cautioned, however, that many of the individuals brought to his attention by the hard drive may not have broken any laws.
"What you first realize is that you can't accuse people of doing something wrong because you don't have the full story, you don't know what they've declared in taxes," he noted.
"You kept asking yourself: where's the story here? Is it illegal? Your instinct tells you it's a story but you need to find it, you need to look for patterns, for trends."
Recruiting the services of foreign journalists to decipher the information was necessary because of the vast amounts of detail in the hard drive, estimated as being 160 times larger than the cache released by WikiLeaks, totaling some 260 gigabytes of data.
The ICIJ's efforts were also assisted by an Australian software company that provided free software to help make sense of the information in the files.
"I approached the firm and said 'Don't ask me why I need it but can you give it to me?'" Ryle recalled.
He also acknowledged that the sheer scale of the global investigation went against the instincts of many of those journalists involved.
"I wanted to encourage collaboration among journalists, something that we, investigative journalists, normally don't like to do. We like to work on our own and keep our secrets," Ryle said.
Other revelations are set to be released on April 15, while the ICIJ promises further reports later this year.
"We're pretty confident we have a lot more because it's so vast and it takes a long time to understand," Ryle said, adding that he was not concerned about whether the revelations ultimately lead to criminal prosecutions.
"It's not our duty -- our duty is to report and to let other worry about that," he said. "Our job is to inform the public about something they didn't know and what people or authorities do afterwards is up to them."
The disclosure site here:
http://www.icij.org/offshore