April 8, 2016
“ICE has long recognized the misuse of corporations and limited liability companies (LLCs) formed under State law as a serious threat to the ongoing effort to combat international criminal activities. The lack of corporate transparency has allowed...
By Heather Lowe, May 29, 2015
This was a very exciting week for lawyers who are sports enthusiasts – the Department of Justice indicted fourteen FIFA officials, alleging that they are part of what one could conclude from reading the indictment is a massive, multifaceted, bribery ring. Informal allegations have been made before, and the whispers that FIFA is synonymous with bribery and corruption have been growing louder over the years. But this week the Department of Justice shouted it from the mountain top (or, perhaps more accurately, in front of a lot of the international press corps, which was probably more effective).
There are a number of interesting facets to the case that is now before us. The first is that for a case about bribery, a charge of bribery seems to be conspicuously absent. The Defendants were indicted for a “pattern of racketeering activity,” including charges of violating the Travel Act in aid of racketeering, money laundering, money laundering conspiracy, wire fraud, wire fraud conspiracy, and other charges that do not expressly include bribery. Why is that?
By Koen Roovers, Global Financial Integrity, February 18, 2015
A major leak of incriminating HSBC records last week resulted in print and television news coverage around the globe, trended on Twitter for several days and prompted several governments to start long-anticipated investigations. Through its Swiss entity, the British banking juggernaut helped customers from around the world to hide their money for tax evasion or other nefarious purposes without any questions asked. In fact, in several of the ‘scripts’ which accompany the accounts, banking personnel are seen to be very willing to accommodate dubious requests—from allowing cash withdrawals worth millions of dollars to setting up sham legal entities to obscure the ownership of the funds.
The ‘Lagarde list’, as the files have come to be known, has been around for a couple of years and so many have been asking: ‘Why do we only see government action once a group of reporters put the spotlight on this?’ Another frequent question has been whether the bank has really (as it claims) cleaned up its act.
Relatively few commentators have asked: how do we prevent this in the first place?
By Joshua Simmons, November 10, 2014
After the recent spate of massive money-laundering, sanctions-busting, and tax-evasion scandals involving large international banks, sometimes it seems more difficult to name a single bank that has not been exposed for wrongdoing than list all those that have. One might think that, having worked their way through so many financial institutions, investigators and prosecutors would be at a loss for what to do next. The banks, though, seem more than willing to provide more work, with many either failing to meet their ends of their settlement agreements, continuing to move money for criminals and tax-evaders, or both.
Standard Chartered, which settled charges in mid-2012 related to its widespread activities violating U.S. sanctions on Iran, Burma, Libya, and Sudan, paid an additional fine this summer for failing to uphold its obligations under the settlement. The bank may now be in line for even more punishment, after new information seems to indicate additional transactions with Iranian entities that weren’t disclosed or admitted in the original settlement. It’s not presently clear whether Standard Chartered retained a relationship with Iranian customers after its settlement in 2012, but it certainly continued to take their money after the initial investigation began.
By Max Heywood, Global Financial Integrity, August 12, 2014
The ongoing prosecution of football super star Lionel Messi for alleged tax evasion made global headlines last week. Messi and his father Jorge are accused of evading 4.2 million euros (US$5.6m) in tax on sponsorship earnings in court documents submitted by the prosecutor.
The alleged tax evasion scheme was based on using a web of anonymous shell companies registered in tax havens such as Belize and Uruguay, as highlighted by our colleagues at Global Witness. These shell companies were linked to other anonymous companies in what the prosecutor calls “convenience jurisdictions” such as the UK and Switzerland.
By Clark Gascoigne, July 17, 2014
Are you an ambitious journalist in Africa with an interest in probing illicit finance, money laundering, and tax related abuses? Or, perhaps, you represent an outstanding, independent media organization based in Africa with a desire and reputation for exposing financial crime and corruption?
Either way, the Thomson Reuters Foundation is launching a new three-year program assisting African media on the reporting of illicit finance and tax abuse, and they are hoping that you will apply. According to the TR Foundation:
African economies lose huge sums of money every year through practices such as tax evasion and avoidance, often carried out by large companies. However, this phenomenon receives little attention and is rarely the subject of in-depth investigation.
Thomson Reuters Foundation believes that African media has a vital role to play in bringing this issue to light and exposing tax abuse where it is taking place. We also believe that collaboration between journalists and media organisations across borders is essential when reporting on money flows between countries.
We are seeking outstanding journalists and ambitious, independent media organisations to join us in this new project.
By Michele Fletcher, July 17, 2014
Last week, Pope Francis announced that French investor Jean-Baptiste de Franssu will head the Institute for Religious Works (IOR). Franssu’s appointment, as well as the appointment of an entirely new board, signals a new phase in the Holy See’s project to restore faith in the scandal-ridden bank.
Franssu’s predecessor, German Ernst von Freyburg, is credited with initiating the process of freezing and blocking suspicious accounts at the bank, having blocked 3,000 of the 19,000 total accounts. Cardinal George Pell, the Vatican’s top finance official, hopes to continue this legacy, saying “our ambition is to become something of a model in financial management rather than a cause for occasional scandal.”
This transition, however, has generated substantial losses for the bank. The closed accounts accounted for between 60 and 70 million dollars of assets leaving the bank. An audit by Promontory Financial also added to the price tag.
By Daniel Winton, July 3, 2014
Tomorrow marks the Fourth of July, the day on which we commemorate the adoption of the Declaration of Independence 238 years ago. For most Americans, the Fourth of July is a day filled with barbecues, fireworks, and, most importantly, patriotism.
Recently, some politicians and corporate leaders have begun to push for another kind of holiday—a repatriation tax holiday. This holiday would provide a tax break for American multinational corporations (MNC) to return money to the United States from abroad.
In contrast to the Fourth of July holiday, which showcases Americans’ support for and appreciation of their country, this tax holiday would result in MNCs swindling America out of legitimate tax revenue. While a new tax holiday might produce some short-term benefits, it would almost certainly end up as a net negative for the country.