Offshore accounts data reveal financial crimes: report

A trove of data obtained by a US-based journalists' group that details thousands of offshore accounts reveals several instances of swindles and other financial crimes, The Washington Post newspaper reported Sunday.

  • Published: 7/04/2013 at 02:49 PM
  • Newspaper section: topstories

A trove of data obtained by a US-based journalists' group that details thousands of offshore accounts reveals several instances of swindles and other financial crimes,

Among the 4,000 US individuals listed in the records, at least 30 were American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct, the report said.

They include billionaire hedge fund manager Raj Rajaratnam, who was convicted in 2011 in one of the biggest insider trading scandals in US history, and Paul Bilzerian, who was convicted of securities fraud, the paper noted.

The report was the latest by prominent newspapers around the world which were given copies of the data for scrutiny by the Washington-based International Consortium of Investigative Journalists.

The head of the ICIJ, Gerard Ryle, obtained the data -- involving 2.5 million records of more than 120,000 companies and trusts set up by two offshore companies operating in the British Virgin Islands and in Asia and the South Pacific -- on a hard drive after investigating a fraud and offshore haven case in Australia.

Several newspapers, including France's Le Monde and Britain's Guardian, have been publishing revelations based on the data.

The Washington Post's report said the records contained information on at least 23 companies linked to an alleged $230 million tax fraud in Russia that was investigated by a Moscow-based lawyer named Sergei Magnitsky.

After Magnitsky informed Russian authorities of his findings, he was accused of fraud himself and thrown in prison, where he died in 2009 under suspicious circumstances.

One of the companies mentioned in the records was used to set up Swiss bank accounts, into which the husband of a Russian tax official deposited millions in cash, the paper said.

In 2006, fugitive former prime minister Thaksin Shinawatra was charged with tax evasion. The charges involved the transfer of Shin Corp shares to Thaksin's children from Ample Rich Investments, a shell company registered in the British Virgin Islands.

Investigators found that Win Mark, which shares the same address in the British Virgin Islands as Ample Rich, was holding shares of SC Asset on behalf of the deposed premier.

Today, there are between 50 and 60 offshore financial centres around the world holding billions of dollars at a time of historic US deficits and budget cuts, the Washington Post said.

Groups that monitor tax issues estimate that between $8 trillion and $32 trillion in private global wealth is parked offshore, according to the paper.

According to fraud experts, offshore bank accounts and companies are vital to those wishing to conceal complex financial crimes.

For example, Allen Stanford, who ran a $7 billion Ponzi scheme, used a bank he controlled in Antigua, The Post noted.

And Bernard Madoff, who ran the largest Ponzi scheme in US history, used a series of offshore "feeder funds" to fuel the growth of his scam.

The Washington Post quoted a top official in the US Justice Department's fraud section, Paul Pelletier, as saying US owners of offshore accounts were sometimes trying to hide money from US tax authorities, law enforcement or regulators.

"As a prosecutor, it was very difficult pursuing these people," he said.

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