The Beatles sang in the 1960s of sharing secrets and promising not to tell.  In an age of  prying governments with big eyes and long arms, malicious internet hackers, of snoopers panting to expose, and whistle-blowers coveting gain, what reality remains in these naïve expectations?  The answer growing ever more apparent is not much.  Tax Havens and tax evasion live on the supposition that identities will remain clothed in obscurity.  Adhering to that notion is fast becoming delusional.

The International Consortium of Investigative Journalists is a Washington-based group of reporters from many countries that collaborate on in-depth investigative stories (see www.icij.org ).  The group announced a blockbuster last Thursday: that it had somehow breached the offshore-bank veil of secrecy; and, had obtained identities of thousands of individual and entity account holders.  The records are allegedly from ten tax havens but predominantly from the British Virgin Islands, the Cook Islands and Singapore. The message, however, should be very scary to offshore tax scofflaws: If these records could be obtained, obviously, records in other locations may be equally vulnerable.  The leaked files disclose information about more than 120,000 offshore companies and trusts and almost 130,000 individuals and agents.

 Among those exposed to uncomfortable light are some very prominent and wealthy persons including:

  •  A Spanish heiress
  • The daughter of former Philippine dictator Ferdinand Marcos
  • Denise Rich, former wife of scandalized, then pardoned trader Mark Rich.
  • The wife of Russia’s deputy Prime Minister
  • Spain’s richest art collector
  • The President of Azerbaijan.

 Not disclosed is how the investigative group acquired the information or its source. The ICIJ website states the leaked files show the workings, facts and figures of:

  • Cash transfers
  • Incorporation dates
  • Relationships between companies and individuals, and,
  • Ghost companies that are populated with directors who are mere fronts for those who want to hide behind a company name.

This is not the first leak of its kind:

  • A leaked offshore connection forced the resignation of the budget minister of France.
  • An HSBC official leaked the identities of over 8,000 customers with accounts based in the JerseyIslands.
  • Germany offered to buy other stolen identities from another HSBC employee.
  • Swiss financial advisor Beda Singenberger was indicted after he’d inadvertently mailed a list of clients he’d helped hide $184 million in offshore accounts. The letter went astray and wound up in FBI hands. Clients named on the list number 60, all of whom are now swimming in thick hot soup.

What should those with undisclosed offshore accounts tax away from these developments?  Don’t count on not being discovered.  Seek professional tax assistance in deciding how to come in from the cold with the least painful result.  The window of opportunity to avert criminal charges and/or draconian civil penalties shrinks with each passing day of procrastination and illusion.

© 2013 by Robert S. Steinberg, Esquire
All rights reserved

This entry was posted in 2012 OVDP, COMPLIANCE, FBARS, TAX, TAX CRIMES, UNFILED RETURNS, VOLUNTARY DISCLOSURE and tagged , , , , , , , , . Bookmark the permalink.

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