Reports & analysis by award-winning investigative journalist Lucy Komisar “”

Archive for the Category ‘tax evasion’

Institute for Advanced Studies in Princeton bans Lucy Komisar from Wm Browder speech

Institute for Advanced Studies in Princeton bans Lucy Komisar from Wm Browder speech

Dec 2, 2016 – Today, the Institute for Advanced Studies in Princeton banned me from attending a talk by William Browder, a controversial American-born investor whose undocumented stories about the theft of several of his Russian companies and the death of his accountant have led to a ban in the U.S. (2012) against people he has accused — again without proven evidence — of human rights abuses and the theft of those companies. The result has been to damage relations between Russia and the U.S.

Ban offshore banks with account secrecy from US correspondent accounts: Nobel laureate Joseph Stiglitz

Ban offshore banks with account secrecy from US correspondent accounts: Nobel laureate Joseph Stiglitz

June 3, 2016 – Joseph Stiglitz, Nobel prize-winning former chief economist of the World Bank, says that the way to solve corruption and money-laundering facilitated by offshore banks that run secret accounts is to “shut them down.” And the way to do that is to ban non-transparent banks from US correspondent accounts. He spoke at a Council on Foreign Relations meeting today.
At the breakfast on “Is U.S. Finance Hurting Growth?”, he addressed an aspect of banking that was not on the agenda, asking, “Why do we have offshore banking? You know, is it that finance really does better in the Cayman Islands because of the sunshine? (Laughter.) You know, that makes money grow faster.”

Tax Evasion Nation: Will the US Be Branded a Tax Haven?

Tax Evasion Nation: Will the US Be Branded a Tax Haven?

The American Interest – May 26, 2016

It will indeed, unless something changes, according to a member of a European Union delegation to the United States investigating shell companies.

An international agency could label the United States a tax haven as the result of America’s refusal to require the names of beneficial owners of companies registered in the U.S. So said European MP Eva Joly, a member of the European parliamentary delegation to the U.S. that met last week with government officials and Congressmen on the issue of America’s clandestine shell companies.

Joly, of the French Greens, told The American Interest, “We have international standards for beneficial owners, and what [the U.S. has] is not up to that.” She said the FATF (Financial Action Task Force) audited U.S. practices in January-February and predicted that the standards would be found lacking when the FATF releases its report in October.

Tax Evasion Nation: Ending Tax Haven Abuse (what Obama gets wrong)

Tax Evasion Nation: Ending Tax Haven Abuse (what Obama gets wrong)

The American Interest, May 12, 2016 –

Solving the offshore money-laundering and tax evasion system is easy, but the Obama Administration’s proposal isn’t the way to do it.

Stung by the Panama Papers revelations of worldwide tax evasion by the rich and powerful, President Obama has seized the moment to propose a solution guaranteed to gather headlines—and then fail. But if he wanted to, he could, through the Treasury Department, end the system of offshore tax havens with a stroke of the pen.

First, let’s look at the solution and, then, at what’s wrong with the President’s proposal.

The Obama proposal acknowledges the threat offshoring poses to our national security. Treasury estimates that $300 billion in illicit proceeds are generated annually in the United States due to financial crimes. But it then essentially ignores the powerful weapon it can wield against that threat.

Exclusive: Yanis Varoufakis reveals how European powers’ Troika abolished Greek anti-tax evasion unit

Exclusive: Yanis Varoufakis reveals how European powers’ Troika abolished Greek anti-tax evasion unit

April 26, 2016 – A drumbeat of the Troika that ended Greek sovereignty last year was that the government wasn’t collecting taxes. The Troika was the European Commission (EC), the International Monetary Fund, and the European Central Bank. That charge came from a collection of states that includes some of the world’s worst tax evasion enablers, including the Luxembourg of EC President Jean-Claude Junker, whose country is a world class tax haven. Former Greek Finance Minister Yanis Varoufakis revealed for the first time how days after he resigned, the Troika effectively abolished a unit he had set up to combat tax evasion.

NY Review of Books reports this comment, but won’t print it

NY Review of Books reports this comment, but won’t print it

Jan 15, 2015 – Anne Applebaum wrote an article about Putin’s Russia in the Dec. 18, 2014 issue of the New York Review of Books that was filled with distortions. When I saw NYRB editor Robert Silvers at a Dissent magazine party in New York Dec. 5th, I told him my opinion. He said to send him my comments. But then he declined to print those comments and said that he would run this editorial statement:

Lucy Komisar has written to us that she has a statement to make about the article by Anne Applebaum in our December 18, 2014 issue. This statement is available on her website, The Komisar Scoop. — The Editors.

Russian Sanctions Highlight Role of Western Enablers

Russian Sanctions Highlight Role of Western Enablers

The secret deals of “corruption fighter” William Browder, an offshore profit-launderer

100Reporters, May 21, 2014 – As U.S and European governments impose sanctions on bankers, businessmen and officials close to Vladimir Putin to pressure him over Crimea, the asset freezes will lead investigators not to the Kremlin alone, but to the western-built offshore system that has helped the Russian leader and friends loot their country and consolidate power.

A case – details not public before – shows how westerners – lawyers, accountants, bankers, investors—used the offshore system to facilitate and benefit from Russian corruption.

It involves William Browder (opposite), self-described anti-corruption fighter, known in Washington for winning passage of 2012 “Magnitsky Act,” which presaged current law by blocking visas, freezing assets of Russians accused of rights violations and corruption.

Browder and fellow investors stole funds diverted via an Isle of Man shell from a Russian company they controlled.

Shells, Shams and Corporate Scams

Shells, Shams and Corporate Scams

The American Interest, Jan-Feb 2011 (online Dec 9, 2010)

Corporate secrecy, which involves hiding the identities of company owners from tax and other legal authorities, is itself no secret. It is well known that offshore banking centers such as Switzerland, Liechtenstein and the Cayman Islands have for many years enabled fraudsters all over the world to carry out scams, launder illicit profits, stash stolen loot and hide money from tax authorities.

What most people do not know, however, is that there is a vast and growing American offshore. Foreign crooks prize states such as Nevada, Wyoming and especially Delaware for state laws that don’t require them to list owners or even company officials when a new company is formed. Corporate interests and the Obama administration are blocking congressional efforts to change that.

The Wall Street ICEcapade

The Wall Street ICEcapade

The American Interest, July-Aug 2010 (online May 18, 2010) –

As I write this, the U.S. Senate is debating a major financial reform bill in which the credit default swap, a kind of derivative, plays a significant part. An amendment to that bill, proposed by Senators Carl Levin (D-MI) and Jeff Merkley (D-OR), would ban banks from proprietary trading. There are a lot of high-rolling bankers who do not want that amendment to pass, because it will mess up their plans to repatriate foreign profits into the United States, untaxed, by trading in derivatives on their own accounts. The clearinghouse ICE Trust U.S. forms a central part of these plans.

What is ICE Trust U.S., and who owns it? ICE US Holding Co., which was established in 2008 as the parent of ICE Trust U.S., is located in the Cayman Islands. Yet none of the owners of ICE US Holding Co. are based in the Caymans. Among the owners of the Cayman’s company are Citigroup, Goldman Sachs, J.P. Morgan, Merrill Lynch and Morgan Stanley, which are headquartered in New York. Bank of America, which now owns Merrill Lynch, is based in Charlotte, North Carolina.

Q&A: Tax Havens, Bank Secrecy, and Tricks

Q&A: Tax Havens, Bank Secrecy, and Tricks

Inter Press Service (IPS), July 14, 2009 – At a recent conference in Miami organised by Offshore Alert, a specialised media organisation focused on financial crime, IPS sat down with veteran investigator Bob Roach to discuss the hurdles facing regulators trying to crack down on tax havens, which cost the U.S. alone an estimated 100 billion dollars annually.

OECD Tax Havens Deal Falls Short, Critics Say

OECD Tax Havens Deal Falls Short, Critics Say

Inter Press Service (IPS), May 8, 2009
– Jeffrey Owens, the tax “point person” of the Organisation for Economic Cooperation and Development (OECD), was stung by activist critics of the OECD standards under which countries will be put on a tax haven blacklist and targeted for sanctions.
The blacklist was announced last month at the London meeting of the G20, which said in a communiqué that it would “take action against non-cooperative jurisdictions, including tax havens…to deploy sanctions to protect our public finances and financial systems.”

Key civil society criticisms are that the OECD standards require bilateral agreements for information on request, not automatic multilateral tax information exchange; that they call for only 12 such agreements to be signed by each tax haven; and that getting off the blacklist entails only promises, which have not been kept by tax havens in the past.

IRS on the Track of Tax-Cheating “John Does”

IRS on the Track of Tax-Cheating “John Does”

Inter Press Service (IPS), April 30, 2009 – The U.S. Internal Revenue Service (IRS) is hitting pay dirt with a novel legal tactic designed to catch tax evaders. And it’s going to use it to force international banks to give up the names of tax cheats. It’s called the “John Doe” summons. Using “John Doe” means the IRS doesn’t know the names of the suspected tax evaders. So it sends a summons to a bank or credit card company that says, “Give us the names and account information of all your U.S. clients with secret offshore accounts.” Daniel Reeves, an IRS agent in charge of the tax agency’s offshore compliance initiative, afforded an unusual look into the broad swath of projects that seek tax-cheating “John Doe’s” every place from accounts of the giant Swiss bank UBS to the records of Pay Pal.

Tax Havens in Spotlight at G20 Meet

Tax Havens in Spotlight at G20 Meet

Inter Press Service (IPS), March 29, 2009 –

This could be the moment when a fatal blow is delivered to the world’s tax havens. Or it could be another largely cosmetic change that allows offshore financial centres such as Switzerland, the Cayman Islands and Liechtenstein to deflect attacks on the system by sacrificing the few tax miscreants that governments catch in their nets.

Decisions at the G20 government leaders meeting in London Apr. 2 will set the direction.

Offshore centres, worried what may happen in London, are falling all over themselves promising to cooperate with the major powers on the trail of tax cheats. But the holes in the tax havens’ promises are as big as those in Switzerland’s famous cheese.

Many believe that automatic exchange of information is the only really effective way to end pandemic tax evasion. Some very good proposals are made in a leaked French paper which is linked to the full story.

Offshore tax cheating could become criminal money-laundering offense

Offshore tax cheating could become criminal money-laundering offense

Feb 11, 2009 –

The U.S. government might finally get a powerful tool against offshore tax evasion by mega-wealthy individuals and corporations. The worst most miscreants face now is negotiated pay-ups years after they are caught.

A bill introduced last week by Senators Patrick Leahy (D-Vermont) and Chuck Grassley (R-Iowa) would make tax evasion using international transfers a criminal money-laundering offense.

The law aims at cases in which money passes through tax havens. It targets not just the evaded taxes, but any money that is part of the scam.

Is NY Gov. Paterson protecting corporate tax evaders?

Is NY Gov. Paterson protecting corporate tax evaders?

Feb 8, 2009 –

At a time when New York State’s budget is reeling from Wall Street tax losses — Wall Street pays 20 to 30 percent of revenues — you’d think Governor David Paterson would want to recoup all the evaded taxes he could get. That doesn’t seem to be the case when it comes to corporations that launder their profits offshore.

Paterson refused to deal with the issue and instead answered a question I hadn’t asked. I wonder why. Does that mean he won’t go after corporate tax evaders? Here is the exchange from the Council’s transcript of David Patterson meeting.

Exclusive: How One Fund’s Profits Ended Up in the Caymans

<em>Exclusive</em>: How One Fund’s Profits Ended Up in the Caymans

Inter Press Service (IPS), Feb 5, 2009 –

President Barack Obama said he would crack down on firms that use offshore centres to evade taxes. He could begin with a New York subsidiary of one of the world’s largest private banks, which used a Cayman Islands company to shift its profits.
Julius Baer logo
Why would a New York investment fund manager run operations through an office in the Caymans? “This type of structure is for optimising taxes,” explained Max Obrist, a Cayman Islands official of the global Julius Baer Group (Zurich).

He told IPS that “generating” the income where a company was actually based, “you would pay much more taxes”. Obrist was describing a company shifting claimed earnings to tax havens to evade home taxes. He allegedly helped Julius Baer Investment Management (JBIM) New York do just that.

Swiss bank’s crafty strategy shows how difficult it is to clamp down on tax havens

Evening Standard (London), Jan 6, 2009

Gordon Brown and Barack Obama are both promising to crack down on the use of offshore tax havens. But putting those tough words into practice is another matter.

One of the world’s biggest private wealth management groups circulates funds via offices in the Cayman Islands, claiming they take major investment decisions — when the main work is apparently carried out in London.

With offices in London and across the globe, Swiss-based Julius Baer banking group invests over $300 billion (£208 billion) in assets on behalf of institutions and wealthy individuals. Profits in 2007 were more than $1.1 billion.

In London, one of its units was known as Julius Baer Investors or Julius Baer Investment Management (JBIM) until a management buyout in 2007. It was renamed Augustus Asset Managers, is based in Bevis Marks in the City, and is still 10% owned by Julius Baer.

From London, Augustus controls assets of $12 billion but claims its profits are generated elsewhere, offshore at a Cayman Islands Baer subsidiary called Baer Select Management.

Why? Simple, really. “If you would generate all the income in London, you would pay much more taxes,” acknowledged Max Obrist, a Cayman Islands executive of Julius Baer.

Corruption: Laundromat Royale

<em>Corruption</em>: Laundromat Royale

Inter Press Service (IPS), July 18, 2008

It sounded like the plot of an action thriller. A U.S. Senate subcommittee held hearings Thursday on how UBS/Switzerland, the world’s largest private bank, and LGT (Liechtenstein Global Trust), owned by the royal family of that micro-tax-haven state, organised complex tax evasion schemes for U.S. clients, and used spy-type tactics to avoid being detected.

LGT bankers allegedly used code names and public phones instead of making calls that could be traced. UBS agents carried encrypted laptops and business cards that didn’t mention they were in the “wealth management” division. According to testimony and records, both banks took care to disguise their activities because moving and hiding the money of tax evaders and other criminals is very lucrative, bringing hundreds of millions of dollars in profits.

Evasive Tactics: UBS trolls for tax cheats

Evasive Tactics: UBS trolls for tax cheats

Condé Nast Portfolio, July 16, 2008

UBS Code names, secretive European royalty, encrypted computers. A spy novel? Nope. Nope. It’s how two European banks helped rich Americans duck the taxman, a Senate probe found.

The Newport regatta has always drawn America’s moneyed class, and the Art Basel show in Miami is hot on the nouveau riche circuit—making both glitzy venues ideal for financial giants to prospect for new clients.

But UBS, one of the world’s largest banks, had another goal in mind when it shelled out money for the UBS Regatta Cup in Newport or the Art Basel Art Fair in Miami, or performances in major U.S. cities by the UBS Vervier Orchestra.

Ex-Rock Impresario Tony Defries lost $22 million in offshore tax evasion scheme

Ex-Rock Impresario Tony Defries lost $22 million in offshore tax evasion scheme

March 3, 2008

Tony Defries, the rock manager who launched David Bowie and who takes credit for managing, marketing and branding such rock stars as Lou Reed and John Mellencamp as well as being “present at the birth of Madonna [and] the reincarnation of Stevie Wonder,” might be making some headlines of his own soon. (He is shown here in 1972 with Bowie’s wife Angie on his right.)Cyrinda Foxe, Angie Bowie & Tony Defries (US Tour 1972)

The ex-impresario, a Brit who now lives in Los Angeles and who for a promoter is unaccountably interview- and camera-shy, was one of the beneficiaries of a fake annuity scheme organized by a Swiss bank and its partner, a pseudo insurance company whose main product seems to be tax evasion. But the “benefit” turned out to be a disaster.

Joseph Stiglitz calls for abolition of offshore bank secrecy

Joseph Stiglitz calls for abolition of offshore bank secrecy

Joseph Stiglitz
Oct 15, 2007

Click above to see a 6-minute video of Prof. Stiglitz, Nobel Laureate, former Chief Economist of the World Bank, former head of the Council of Economic Advisors to President Clinton. He explains what is wrong with tax havens.

The video was made by Lucy Komisar.

Offshore shell games threaten global financial system

Offshore shell games threaten global financial system

Sept 17, 2007

There’s an astonishing article in the Washington Post’s Business Section (“Risk. Now They See It. Now You Don’t. Sept 16, 2007)

The Post, which has never, ever, railed against tax havens, is now suggesting that their use to cheat tax authorities and investors threatens the entire global financial system. Of course, it doesn’t put it so starkly, but that’s the gist.

The Post says, “Over the past few years, major banks figured out how to use “conduits” and “structured investment vehicles” to earn big fees while playing cute little games of tax and regulatory arbitrage and keeping it all pretty much hidden from investors.”

Where does The Post think those off-balance-sheet investment vehicles are? Most of Enron’s were in Grand Cayman. The Post should connect the dots. Tax and regulatory arbitrage plus hidden plus off-balance-sheet investment vehicles = offshore.

Why did regulators tolerate the use of offshore? Because global tax evasion and avoidance of regulation is something corporations want. That’s what offshore secrecy is for. Now, will Congress act, in spite of corporate power, when there is a threat to the entire global financial system?

Tax dodging helps Murdoch buy the Journal

Tax dodging helps Murdoch buy the Journal

Aug 1, 2007

Where did Rupert Murdoch get $5 billion to buy up the Wall St. Journal? Beyond normal profits, his coffers were stuffed by dodging taxes in the U.S. and elsewhere. Some of that is your money!

The Economist, in 1999, investigated Murdoch’s corporate tax affairs and discovered that a collection of 800 offshore companies help him cut corporate taxes to 6%!

Closing Down the Tax Haven Racket

Closing Down the Tax Haven Racket

Speech to conference on “Taming the Giant Corporation,” organized by Ralph Nader and The Center for Study of Responsive Law, Washington DC, June 8, 2007

The tax haven racket is the biggest scam in the world. It’s run by the international banks with the cooperation of the world’s financial powers for the benefit of corporations and the mega-rich. This talk is about strategy, but first you have to know the target, and most Americans, including progressive activist Americans, don’t know what I’m going to tell you. And that’s part of the problem.

Between 1996 and 2000, of U.S. and multi-national corporations operating in the United States, with assets of at least $250 million or sales of at least $50 million, nearly two-thirds paid no U.S. income tax. Over 90 percent reported owing taxes of under 5 percent. One year, six in ten paid less than a million.

This is the dirty little secret of globalization: the end of controls on capital flows and the expansion of the tax haven system from 25 years ago to where it has more than doubled to about 70 tax havens.

The system is a major reason for the growing inequality in the U.S. and between the West and the developing worlds.

The system has given the big banks and corporations and the super-rich mountains of hidden cash they use to control our political systems.

Bono the tax dodger wants others’ taxes spent on Africa

Bono the tax dodger wants others’ taxes spent on Africa

May 16, 2007

Paul Hewson, known as Bono, the rock star, is complaining that the seven wealthy nations in the G-7 which had promised to double aid to the developing world by 2010, are more than half behind target. The countries are the United States, Britain, Canada, France, Germany, Italy, and Japan. Bono

Bono’s protest might be taken more seriously if he and his U2 band were not participating in the system that deprives developing countries of far more than western aid – much of which has to be repaid.

Bono is a tax dodger. As a result of a change in Irish law that limits the tax exemption for artists and musicians to a “punitive” $625,450, Bono’s U2 has moved its music publishing company registration to the Netherlands, where the tax on its multi-million dollar income will be about 5 percent. To dodge taxes on non-royalty income, Bono’s company has used offshore nominees.