Fraud experts say offshore bank accounts and companies are vital to the operation of complex financial crimes. Allen Stanford, who ran a $7 billion Ponzi scheme, used a bank he controlled in Antigua. Bernard Madoff, who ran the largest Ponzi scheme in U.S. history, used a series of offshore “feeder funds” to fuel the growth of his multibillion-dollar house of cards.
Michael I. Goldberg, a Fort Lauderdale, Fla., attorney who often testifies as an expert on Ponzi schemes, said it is rare to see one that does not make use of the offshore world.
“If you don’t, it’s usually a very parochial, Podunk type of Ponzi,” he said. “But the more sophisticated ones almost always do.”
The offshore world makes it hard for prosecutors pursuing complex financial crimes to follow the money, because many offshore jurisdictions refuse to recognize U.S. subpoenas and account information is hidden under layers of corporate shells.
“People were trying to hide their money from the IRS, or they were trying to hide their money from law enforcement, or they were trying to hide their money from regulators,” said Paul E. Pelletier, the principal deputy chief of the Justice Department’s fraud section who prosecuted Stanford before entering private practice in 2011. “As a prosecutor, it was very difficult pursuing these people.”The Washington Post
Piercing the secrecy of offshore tax havens
Scott Higham, Michael Hudson and Marina Walker Guevara
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