PANAMA PAPERS - LEAK FROM TAX-HAVENS

12 May 2016 - update:

The Panama Papers data search facility is working.
SEARCH HERE

Are you featured? Is your property registered offshore? (as is the UK tax offices portfolio).
Find old (rich) friends - and make new ones, in exotic locations.

If you happen across my lost offshore bank account holding $100 million - just forward the cash to me ...and I'll pay the tax and pay you a commission.

My first search took me to 3 unexpected routes to tax-havens - the financial district of Ekaterinburg, Russia, stuffed full of the Big 4 and many lesser tax-planners - Istanbul financial district - Consulco International Ltd, focused on Cyprus and Russian tax evaders, a firm similar to Mossack Fonseca - and Ras Al Khaimah in the UAE.

It's a great circle of international tax-free friends we should all join.

The only people who won't use this facility are in Her Majesty's Revenue & Customs HMRC, whose motto is "See no Evil - Forgive the Rich - Crucify the Poor".

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To; Rt Hon Andrew Smith MP, Oxford East, UK

15 April 2016.

Dear Andrew

Tax-Evasion.

Thank you for your continuing activity on this issue and for the copy letter from tax minister, David Gauke.

After many years discussion with experts, I now think that the UK government has a policy to not pursue wealthy persons – individuals and companies – who evade taxes. The tax-law system seems to be riddled with ex-tax-fraud-planners from big law and audit practices, embedded in key government roles. Sadly, I am forming the view that the UK tax system is deeply corrupt.

One of my greatest concerns is the government’s determination to sell the well run and profitable (£1M per annum) Land Registry to any buyer, including private offshore funds:

“UK is again offering to sell the state-owned Land Registry - to Advent International in Luxembourg (Private Eye). This will hide all the owners and dealings of UK properties and enable crooks to claim public common land behind a wall of even greater secrecy than today; or simply to steal our houses by re-registration. How can an ordinary (homeless) person sue a secretive international offshore Hedge Fund?

http://news.sky.com/story/1660183/advent-plots-1bn-land-registry-takeover “

Perhaps David Gauke will comment on selling Land Registry to crooks; and on the pathetic 11 cases brought by HMRC against tax-haven evaders, out of more than 200,000  tax-haven, revealed and identified accounts. The villains have taken over and are asset-stripping austerity-Britain.

Best wishes    -   Noel

UK attacks poor Benefits Cheats with 3,700 investigators; but turns a blind eye to £120B per annum tax-evasion, with just 300 investigators. Only 11 offshore cases have been investigated.

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13 April 2016.

The publication by the German newspaper, Süddeutsche Zeitung of 230,000 or more

files of secret tax-haven companies, leaked from global lawyers Mossack Fonseca, has caused a storm around the world. The leak amounts to 2 Terabytes of data - more than all previous controversial leaks added together. (Watch the video)

The team of journalists in Germany and other countries, have been working for nearly a year to convert the raw data into legible format and interrogate it for famous names. It is these famous names that the media has chosen to publish first; so we learn that President Putin has a musical friend, a cellist, who has suddenly and inexplicably been showered with hundreds of millions of dollars. Is it Putin's cash? And we learn that British PM, David Cameron's father ran a substantial offshore investment fund for 30 years, which has never paid a penny tax to Britain - which is not very politically correct, at a time when all Britons are mired and miserable deep in austerity - and told that the nation is bust. Dozens of trusted leaders have hidden millions and billions of their fellow citizens' money in the tax-havens. We are all deeply shocked, distressed and terribly excited. 

This cornucopia of wealth, obviously not needed by the "beneficial owners" (as opposed to the false owners hired to shield the loot from prying eyes), has been languishing in the world's 74 known and some unknown tax-havens and steadily increasing, since Thatcher and Reagan bestrode the globe - and gave license to all the mediocre parasites on earth to steal as much as they could and become gloriously "filthy rich"; without paying a penny of tax back to the source countries - where the wealth was generated. We - The People - are rightly curious to know how they've shipped the money offshore, past zealous keen eyed auditors and alert bankers - and how we are going to get it all back.

Russia has leapt to Putin's defense, saying there is nothing new in these scurrilous rumors and anyway he didn't do it. Britain has leapt to Cameron's defense, saying that his family finances are "A private matter" that we impertinent tax-paying peasants have no right to question. And anyway, his father died some years ago. The BBC repeat on the hour every hour, tales of tortured mistreated hunted heroic migrants who HAVE to hide their identities and last few pitiful belongings from wicked dictators and secret police - in, of course, well hidden and protected tax-haven companies in well heeled tropical paradises; whose transactions are, of course, "all completely legal" ...and nothing whatsoever to do with tax evasion, avoidance or minimization. Or about cheating the rest of the poor saps at home who do pay tax.

One of the main investigators is the International Consortium of Investigative Journalists, ICIJ, who are shining bright light into dark corners - they rely on our donations to keep going. Give generously. Another is The Guardian newspaper. More on this later. 

  

This unravelling and analyses of 40 years of villains burying loot on remote treasure islands - will run and run. Watch this page.
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TAX-PLANNERS ALSO GO TO PRISON - Which bunk do you prefer Sir? Upper or lower?:

To John:

Yes - Private Eye has been pointing the finger at the Guardian Group for years. It is breathtaking hypocrisy. But real offshore tax-evasion is still a minority crime – for the bravest and boldest. The Panama Papers is the 3^rd huge leak of names and accounts. Tax investigators will act, I think; even HMRC.

Blairmore Investment Trust (Dave’s dad) would only be illicit if management was in London – not overseas. They seem to have gone to great lengths to make that argument. In a tax court, under cross-examination -  I guess the false Trustees/ Directors /Managers would be quickly unmasked as fakes. But that is unlikely to happen.

This was my special area - back in the days of McVeigh Hodson Blackstone Franks. I still do a few cases. I was asked last week for an article on what happens to rogue tax-planning lawyers and accountants:

Noel

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9 April 2016. Taxing Times For Lawyers.

Here is my first draft. I haven’t investigated the Professional Indemnity Insurance issue as (1) very little is published about claims (2) claims can and do take years (3) each insurance policy will differ (4) I’ve already written 1,800 words.

Please say if this is the type of article you want, Do edit it. And do share it.

Best wishes  - Noel

Noel Hodson - Director

Tax Reconciliations, Oxford UK,

From Tax-Havens to Safe Havens

Tel +44 1865 (0)760994 Mobile 07713 681216

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7 April 2016. Tax-planners’ risks – text for Lawyers and Accountants.

The Panama Papers, 11.4 million pages, copied from about 200,000 client files of international company formation lawyers Mossack Fonseca , detailing their clients’ offshore companies real  beneficial owners, are being published globally.  The data was purchased by German newspaper  Suddeutsche Zeitung for $1.4 million (Bloomberg) . Among the previously anonymous clients are many well known figures from politics, business, sport and entertainment.  The global media (April 2016) are making it front page, headline news.  The UK Guardian newspaper is helping to analyse and is publishing the data.

The data, from 1977 to 2015, amounts to 2.6 terabytes, or 2.6 trillion bytes of digital information (2.6  followed by 11 zeros), which is equivalent to ten new 250GB laptops, completely full. It is an enormous amount of confidential data – far bigger than all previous leaks added together.

The clients will be both alarmed and annoyed.  Their homeland tax-collectors will check the clients’ tax returns against this information. Many are companies formed in Panama, where Mossack Fonseca are based, and registered in tax havens, including The British Virgin Isles, Cayman, Bermuda, Channel  Isles, London and many more of the 82 tax-havens.

The International Consortium of Investigative Journalists, ICIJ, calculate that Mossack Fonseca have formed about a quarter of the world’s tax-haven companies and Trusts. as “tax vehicles”; implying 920,000 globally. This is a low estimate of companies formed since 1977, but many have not traded, set-up for transactions which didn’t happen. One million is a fair guesstimate – between 82 tax-havens, implies only 12,000 active companies each. 

The assets held in tax-vehicles was estimated, in 2012, by Wall Street, McKinsey economist James Henry as $32 trillion, (80 million jobs for 10 years).  A 2007 OECD report said $21 trillion. Most of these assets, mostly cash, have been transferred tax-free from major OECD and emerging economies, via international banks.  Assets from OECD based companies are transferred by self-invoicing (not arms-length as required by law). Creating self-invoices is usually false-accounting – a criminal offence.

The total  Capital-Flight grows by $1 trillion per annum, which is 1/60^th or 1.6% of the annual global gross domestic product GGDP. Some 98.4% of GGDP, of our world-work-value, remains in the source nations – the $1 trillion cash is the liquidity from GGDP; which explains austerity and quantitative easing to top up liquidity in wealthy regions. ( see Money Wars Slide 11).

Thus tax-evasion is damaging , and of interest to governments, but is a minority activity. Most executives, businesses, lawyers and accountants are not involved in this global crime. Beware of those who are – and Sup with a Long Spoon.  Clients might not tell you the truth.

Many top tax-planners have become so habituated since 1980 to their dark arts that they have lost sight of the criminality. Naive auditors and tax-compliance clerks observe high-flying senior partners advising on the creation of self-invoicing and assume “it is all perfectly legal”. It is not. In McVeigh Hodson Blackstone Franks tax dept (1970-80), the questions we asked were “…has anyone been advised to hide their identity?” and “…does this mean two sets of company books?”  Most tax-haven companies fail these tests; indicating criminal False Accounting, Fraud, Fraudulent Conspiracy, and Wire Fraud, which carry long prison sentences. 

THE TAXMAN COMETH – AVOIDING PRISON - A barrister interviewing a confident offshore, but London resident, client and his clever accountant, cautioned them with “You won’t feel so bullish when you are clutching the bar at the Old Bailey” adding “…which prison bunk do you prefer Sir – upper or lower?”

Advisors should focus on the homeland or source nations’ laws – the tax-haven’s national laws are irrelevant. It is not the tax-havens that are losing capital and tax revenues. The majority of experts who insist that “it is of course completely legal” often recite the laws of Jersey or Liechtenstein or Andorra or Malta or Delaware or Luxembourg etc. It is the laws of your client’s country of residence which apply – that is where the assets and profits are generated and is the region which imposes penalties.

The UK tax-collectors HMRC are usually satisfied to collect the tax, compound interest and penalties (usually being 100% of the hidden assets); the UK only takes criminal proceedings where the client is a persistent, repeat tax-evader. HMRC hardly ever act against advisors – even those who have written false invoices. Famous cases include champion jockey Lester Piggot, comedian Ken Dodd, Disc Jockey Chris Moyles and 450 others, but in the past decade HMRC have only brought 11 (eleven) cases against more than 100,000 UK sourced tax-haven companies, citing lack of resources.  This has given planners a false-sense of immunity; but HMRC can re-open assessments for past years – and issue protective assessments (in essence saying “you prove it is tax-paid”).

The IRS in America is far less polite and more immediate. There is a current case (Apr 2016) against a retired tax-court judge - Kroupa. The IRS publish lists of cases, presumably to discourage others.

I SAY AVOIDANCE - YOU SAY EVASION  In this US case, a firm of Chicago lawyers, Jenkens & Gilchrist, advised 931 clients on a tax-avoidance scheme that the court found to be tax-evasion and criminal. On a conspiracy charge the lawyers got up to 8 years prison and $190 million in fines. Presumably the clients all faced back-duty tax cases which usually take 100% of the “sheltered” money.

DAVID MILLS - ITALY  The Italian courts take decades to process a tax cases and rarely recover any assets. The defendants might die of old age before judgement is made. But, exceptionally in the Berlusconi and Parmalat case the Italians arrested UK lawyer David Mills who was charged with money-laundering and tax fraud and sentenced to jail. He later successfully appealed and remarried his wife, UK Minister Tessa Jowell. But few lawyers are that well connected. In the process Mills confessed to HMRC of evading tax on $600,000 paid by Berlusconi via a web of tax-haven companies. Presumably even HMRC have now taxed the $600K – or have they?

Grant Thornton, UK, the auditors of Parmalat, the alleged source of the laundered money, were sacked and sued by Parmalat investors. The case re-surfaced in June 2014 in the US, again putting the auditors at risk of jail and very large fines.

SPAIN – ROYAL DUES Princess Cristina of Spain has not been charged with embezzlement, but her husband has. The Princess (Infanta) is charged with tax-evasion on her income from the embezzled funds.  She faces an 8 year sentence. The case is proceeding (April 2016).

USA - ENRON and Arthur Andersen  (now Accenture) - The largest corporate collapse to date. The auditors were banned. This case had all the “complex” signals of tax-evasion. At the time, October 2001, Arthur Andersen was the world’s largest auditor and tax-planner.

It is probable that they contrived then audited the maze of on-shore and offshore “vehicles” for tax-evasion purposes, which were also used by the internal accountants and directors to steal  $40 to $60 billon dollars.

“All told, sixteen people pleaded guilty for crimes committed at the company, and five others, including four former Merrill Lynch employees, were found guilty. Eight former Enron executives testified—the main witness being Fastow—against Lay and Skilling, his former bosses.^[127] Another was Kenneth Rice, the former chief of Enron Corp.'s high-speed Internet unit, who cooperated and whose testimony helped convict Skilling and Lay. In June 2007, he received a 27-month sentence.^[145]

Michael W. Krautz, a former Enron accountant, was among the accused who was acquitted^[146] of charges related to the scandal. Represented by Barry Pollack,^[147]Krautz was acquitted of federal criminal fraud charges after a month-long jury trial.”

Exactly one year after Enron began its free fall into bankruptcy, auditor Arthur Andersen LLP received today the maximum sentence of five years probation and a $500,000 fine for altering evidence of its work with the disgraced energy giant.

U.S. District Judge Melinda Harmon sided with prosecutors and the Securities and Exchange Commission, who wanted her to make an example of the firm.

 Germany – Tax Evasion  – “ Attorneys or C.P.A.s may be accused by the C.I.D. (“Steuerfahndung”) of having colluded with the accused taxpayer thereby disqualifying them from further defending their clients“  USA based advice. This implies that advisors will be criminalised alongside clients.

Mr Becker had admitted making a mistake and has paid 3m euros in back taxes and interest. "Putting Becker in jail would be senseless and unfathomable," his defence lawyer Klaus Volk had argued. But the prosecution said Mr Becker had waited too long to make his confession. 

A German court convicted Bayern Munich president Uli Hoeness of tax evasion on Thursday and sentenced the man who turned the football club into one of the world's most successful sports dynasties to 3.5 years in jail.

Some 55,000 tax evaders have turned themselves in over the last four years and paid a total of about 3.5 billion euros in back taxes, according to the taxpayers association. The number of voluntary disclosures rose four-fold in 2013 from 2012.

Aug 2011 German tax dodgers with money hidden in Swiss banks can sleep easy tonight. For the German government this week initialled a beggar-thy-neighbour deal that undermines years of diplomatic work to penetrate Switzerland's globally corrosive banking secrecy. The agreement, which is due to be signed by both governments over the next few weeks, sees Germany accepting a paltry $2.8bn upfront from the Swiss banks said to hold some $276bn of Germans' undeclared wealth.

NO HIDING PLACE - The Panama Papers, of 200,000+ clients, leading to many well known tax-havens where many famous and infamous people and companies are hiding tax-free assets, will oblige even the most reluctant governments to act and introduce tax-justice. Few OECD regions, apart from the USA, jail accountants, lawyers, bankers and tax-planners alongside clients who they have advised, enabled and assisted to evade tax. But, this latest, largest “leak” which again indicates and confirms the vast amount of global hidden and frozen assets, when many OECD governments are imposing austerity, pleading poverty and borrowing heavily from The International Free Markets, will, I think, at last tip the political balance and trigger tens of thousands of tax investigations, under existing laws, reaching back to assets hidden since 1977 and coming forward to 2016.

I consider it highly likely that the spy agencies of OECD countries have already obtained all past and present data from all tax-haven accounts and transactions. 

For repatriation purposes, as in America, and Italy, other regions will probably also arrest the most persistent tax-evasion advisors.

GUILTY UNTIL PROVEN INNOCENT - The most efficient way to proceed, as happened with the Cyprus tax-bank accounts in 2013, is for governments to confiscate the tax-haven assets of their resident citizens (USA taxes its citizens wherever they reside) and oblige beneficial owners to demonstrate the offshore assets are tax-paid. Nations that are slow to act will find some or all of the tax-haven assets which ought to be repatriated to their country, taken by faster acting and more determined legislations.

Noel Hodson, Tax Reconciliations, Oxford. 7 Apr 2016.

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THE UK MEDIA REPORT THAT ONLY RUSSIA & CHINA USE TAX HAVENS. 
WHAT BULLSHIT.
5 Apr 2016.

Lee,

THE UK MEDIA COVER-UP OF THE PANAMA PAPERS.

Well said (below). Spot on. But I think the ICIJ are a genuine force for good.

As you say, China and Russia are bit players in offshore skulduggery. Most of our VIPs have illicit offshore accounts, “Which,” as the BBC parrots 20 times a day, “is of course all completely legal”  unless you live in the UK/USA/OECD and pretend the offshore assets are controlled by offshore false-directors /trustees  who generate false invoices (self-invoicing) to reduce your UK income – in which case you are guilty of fraudulent conspiracy /wire fraud – which jailed Al Capone and others for a long time. Where is the UK's bold champion of the people, Jeremy Corbyn, when you need him?

As an aging tax-advisor, I wrote to a few surviving lawyer colleagues:

“4 April 2016 - The International Consortium of Investigative Journalists ICIJ spilt the beans. Who copied all Mossack Fonseca’s 230,000 client files is a mystery. They will name someone, a hapless soul in Panama, but my guess is that all such data is being mined by GCHQ, MI5 CIA Homeland Security etc – who might be spying on their computers – to get the grounds to recover about $16 trillion for the US Treasury (and $3T for us). That’s a lorra lorra loot – even for America. $16,000,000,000,000 (12 noughts) – it would pay off all their government deficits.

Interesting Times  - Noel”

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…And …..Subject: Interesting taxing times - Sup with a long spoon.

Hi - with your lawyer's hat on:

The most cited total of offshore tax-haven assets is $32 trillion, calculated by McKinsey Wall St. economist James Henry http://cogentbenger.com/canadiantaxdodge/interviews/james-henry/

.

My estimate of how much of the $32T is from the UK economy is $3 trillion (about 8 million jobs for 10 years). From accountancy and auditing experience I guess that 99% of it has been transferred from OECD economies using (illicit) self-invoicing, however "complex" and tortuous the route. The devil is as ever in the detail and it is in these transactions, claiming tax-deductibility in the source nations, that fraudulent conspiracy has occurred (in America also "wire fraud"). The offshore total is calculated by OECD Paris to be growing by $1 trillion a year - which is approx the entire annual surplus liquidity from all mankind's work - the global GDP. http://www.noelhodson.com/Money-Wars-2012-V5SHORT.pdf

I have long thought that the hidden amounts are so large and are mostly criminal acts that major governments would set out to recover the assets.

People at most risk of jail are officers and advisors who have signed Balance Sheets and Tax Return Declarations in the OECD nations, or who have paid dummy officers to sign for them ("a director by whatever name called"), and the corporate treasurers who have authorised or personally effected the transborder transfers of assets - without full disclosure.

The Mossack Fonseca stolen or leaked records date from 1977. From which date the Beneficial Owners' income on the assets will not have been declared. Far too late now to put up a credible "I didn't know" or "the dog ate my homework, Patent Box and tax-returns" defence. It is said that the 11.3M pages are 2/3rds of Mossack's records - so there is more (3.5M papers) to come - and the ICIJ say that Mossack is the 4th largest of such offshore enablers - so the other 3 big-firms amount to another 45M documents - across all 72 tax-havens.

Advising "how to move back on-shore" with a clean bill of health, I caution clients to assume that the ICIJ and other investigators (and thus local tax-collectors) also hold leaked records from the Big-4 accountants (e.g. PWC LuxLeaks) - and from banks (e.g. HSBC Zurich etc). The past 10 years' leaks attest to this supposition. Early tax settlement is vital to minimise costs.

A crumb of comfort for clients who paid for "the best of" advice "which is of course all completely legal" (bullshit), in writing, from the Big4 or major law firms, is that the clients might be successful in suing the advisors for faulty tax-panning; in turn the tax-planners will recover the costs from Lloyds of London under their PI policies. Self-invoicing has never been legal in OECD tax-law, however cunningly disguised.

Interesting times.

Noel

Noel Hodson - Director

Tax Reconciliations, Oxford UK,

From Tax-Havens to Safe Havens

Tel +44 1865 (0)760994 Mobile 07713 681216

From: Lee Chadwick [mailto:leechadwick99@btinternet.com] 

Sent: 4 April, 2016 11:18 PM

Subject: Whoever leaked the Mossack Fonseca papers

Corporate Media Gatekeepers Protect Western 1% From Panama Leak  - By Craig Murray 410  

3 Apr, 2016  in Uncategorized by craig

Whoever leaked the Mossack Fonseca papers appears motivated by a genuine desire to expose the system that enables the ultra wealthy to hide their massive stashes, often corruptly obtained and all involved in tax avoidance. These Panamanian lawyers hide the wealth of a significant proportion of the 1%, and the massive leak of their documents ought to be a wonderful thing.

Unfortunately the leaker has made the dreadful mistake of turning to the western corporate media to publicise the results. In consequence the first major story, published today by the Guardian, is all about Vladimir Putin and a cellist on the fiddle. As it happens I believe the story and have no doubt Putin is bent.

But why focus on Russia? Russian wealth is only a tiny minority of the money hidden away with the aid of Mossack Fonseca. In fact, it soon becomes obvious that the selective reporting is going to stink.

The Suddeutsche Zeitung, which received the leak, gives a detailed explanation of the methodology the corporate media used to search the files. The main search they have done is for names associated with breaking UN sanctions regimes. The Guardian reports this too and helpfully lists those countries as Zimbabwe, North Korea, Russia and Syria. The filtering of this Mossack Fonseca information by the corporate media follows a direct western governmental agenda. There is no mention at all of use of Mossack Fonseca by massive western corporations or western billionaires – the main customers. And the Guardian is quick to reassure that “much of the leaked material will remain private.”

What do you expect? The leak is being managed by the grandly but laughably named “International Consortium of Investigative Journalists”, which is funded and organised entirely by the USA’s Center for Public Integrity. Their funders include

Ford Foundation

Carnegie Endowment

Rockefeller Family Fund

W K Kellogg Foundation

Open Society Foundation (Soros)

among many others. Do not expect a genuine expose of western capitalism. The dirty secrets of western corporations will remain unpublished.

Expect hits at Russia, Iran and Syria and some tiny “balancing” western country like Iceland. A superannuated UK peer or two will be sacrificed – someone already with dementia.

The corporate media – the Guardian and BBC in the UK – have exclusive access to the database which you and I cannot see. They are protecting themselves from even seeing western corporations’ sensitive information by only looking at those documents which are brought up by specific searches such as UN sanctions busters. Never forget the Guardian smashed its copies of the Snowden files on the instruction of MI6.

What if they did Mossack Fonseca database searches on the owners of all the corporate media and their companies, and all the editors and senior corporate media journalists? What if they did Mossack Fonseca searches on all the most senior people at the BBC? What if they did Mossack Fonseca searches on every donor to the Center for Public Integrity and their companies?

What if they did Mossack Fonseca searches on every listed company in the western stock exchanges, and on every western millionaire they could trace?

That would be much more interesting. I know Russia and China are corrupt, you don’t have to tell me that. What if you look at things that we might, here in the west, be able to rise up and do something about?

And what if you corporate lapdogs let the people see the actual data?

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