Other stuff

The story is getting more confusing:

• new revelation of an old technique to launder money,
• US government actions to reduce laundering that look to me like they are just eyewash, and
• small investors in a local real estate project appear to be investors working through the Panamanian system.

5/5 – Star-Telegram – Panama law firm used charities’ names as cloaks for clients – One of the schemes used in hiding money through offshore companies is setting up a foundation under Panamanian law. A private foundation can be set up which requires three directors, two of which must be publicly disclosed. Intended beneficiaries must be identified but could be changed before any funds disbursed.

The way this works is the two named individuals work for the law firm while the third undisclosed person is the person hiding money. The undisclosed person calls the shots with the two staff people from the law firm following instructions. The beneficiaries can be changed at any time.

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Update on Panama Papers – 5/9Read More »

Yes, it is actually possible to organize your offshore company with the ownership documented with bearer stocks. Join me as I dive into the fine details of a WSJ article.

4/6 – Wall Street Journal – Panama Papers: Hiding Cash Has Become Crummy Business – Even Switzerland has joined the crackdown on hiding money. Prosecutors there leaked information on the Malaysian scandal. That’s a whole other story that I won’t go into. The point is Swiss prosecutors are going after money launderers and embezzlers. Swiss prosecutors.  You know, from Switzerland. Land-of-the-numbered-account Switzerland.

More detail from the article:

The offshore “business” has been shrinking for a long time. Article says the firm of Mossack Fonseca & Co saw a two-thirds decline in the number of companies they incorporated between 2005 and 2015, dropping from 13,287 to 4,341 in a decade.

Article says the Panama Papers say the law firm’s clients have incorporated 16,323 companies over the last three years but have closed up 28,777 in the same time. That’s a net shrinkage of over 12,000.

The company represented around 6,000 businesses in 2005 whose ownership was evidenced using bearer shares. Currently they represent 170. That’s a drop of 97% in a decade in the number of clients using bearer shares.

Bearer shares. Did you know that was even a thing? Before I get to that, let me describe bearer bonds.

Bearer bonds

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Oh, the things you can learn from the Panama Papers. Did you know that documenting ownership of a shell company through bearer stocks is even a real thing?Read More »

Previously mentioned the massive leak of data about offshore banking that hit headlines this past Sunday. This is now called either the Panama Papers or Panama leak, take your pick. Here are a few of the initial articles on the follow-up that I found interesting.

There are more and deeper issues than just tax evasion. By the way, the term we should be discussing is tax evasion, not tax avoidance. Avoidance means complying with the tax law in order to lawfully reduce your tax bill. Evasion means breaking the law.

Simple introduction to offshore banking

4/4 – Vox – The Panama Papers leak, explained with an adorable comic about piggy banks – Simple cartoon gives a great illustration of a little boy hiding some quarters from his mommy in a piggy bank stored in his little friend’s closet. Lots of other little boys to the same. Eventually the friend’s mommy finds all the piggy banks and calls all the moms.

Some of the little boys may just have wanted to hide a few extra quarters from mommy because they wanted some privacy. Others may have been stealing lunch money from their schoolmates and don’t want mommy to know. Some may have been stealing from mommy’s purse. Yet others may have been wanting to save up a couple of dollars to buy an actual surprise birthday present for mommy and daddy. Some have gotten tired of their siblings sneaking into their piggy bank.

First casualty

4/5 – The Guardian – Iceland prime minister resigns over Panama Papers revelations – Watch how fast things have developed.

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Initial follow-up to Panama Papers leakRead More »

A massive amount of whistle blower information was announced over the weekend. The files are from a large law firm in Panama that helped companies and individuals set up offshore companies. This is called the Panama Papers.

There are many legitimate reasons to use offshore companies. There are many illegitimate reasons too.

I’ve just started looking at the story. Here are a few introductory tidbits.

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Massive document leak on offshore banking. Intro to the Panama Papers.Read More »