Posts Tagged ‘CTL’

08
April 2013

Piercing the secrecy of offshore tax havens

Washington Post

A New York hedge fund manager allegedly swindles $12 million from a prominent Baltimore family. An Indiana couple is accused of bilking hundreds of customers by charging for free trials of cosmetic products. A financial manager in Texas promises 23-percent returns but absconds with $33.5 million of his investors’ money in a classic Ponzi scheme.

All three cases have one thing in common: money that ended up in offshore accounts and trusts set up in tax havens around the world.

The existence of the trusts surfaced during a joint examination of the offshore world by The Washington Post and the International Consortium of Investigative Journalists, a D.C-based nonprofit news organization. ICIJ obtained 2.5 million records of more than 120,000 companies and trusts created by two offshore companies, Commonwealth Trust Ltd. (CTL) in the British Virgin Islands and Portcullis TrustNet, which operates mostly in Asia and the Cook Islands, a South Pacific nation. The records were obtained by Gerard Ryle, ICIJ’s director, as a result of an investigation he conducted in Australia.

Many people use the offshore world for legitimate purposes, for legal tax shelters or to smooth the way for international trade. Overseas havens vaulted into public consciousness last year with stories about Republican presidential nominee Mitt Romney’s accounts in the Cayman Islands. Recent coverage of the Cyprus banking crisis has thrust the issue back into the spotlight.

U.S. citizens are permitted to move money offshore as long as they report their account information to the Internal Revenue Service. But there have long been concerns that much of the money is not reported and bleeds tax revenue from governments worldwide. Recently, aspects of the offshore world came under assault after whistleblowers alerted the IRS to thousands of unreported U.S. accounts in Swiss banks, resulting in an amnesty offer to violators who paid billions in fines to the U.S. government.

The records reviewed by The Post and ICIJ expose how havens in the South Pacific and Caribbean in some cases have become sanctuaries for individuals seeking to conceal their activities from investigators and investors.

Among the 4,000 U.S. individuals listed in the records, at least 30 are American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct.

They include billionaire hedge fund manager Raj Rajaratnam, who was convicted in 2011 in one of the biggest insider trading scandals in U.S. history, and Paul A. Bilzerian, one of the most famed corporate raiders of the 1980s, who was convicted of securities fraud.

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08
April 2013

The tax haven shell game

CBC

Frederic Zalac has the details about a company run by a Toronto businessman and its role in a multi-million dollar scam that turned in to an international murder mystery.

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05
April 2013

Caribbean go-between provided shelter for far-away frauds

Mail & Guardian

The tangled trail of the Magnitsky Affair, a case that’s strained US-Russian relations and blocked American adoptions of Russian orphans, snakes through an offshore haven in the Caribbean.

The death of Moscow tax attorney Sergei Magnitsky sparked international outrage. It also fueled a push to unravel secret deals that had prompted him to claim that gangsters and government insiders had stolen $230-million from Russia’s treasury.

Magnitsky and other private attorneys investigating the affair on behalf of a major hedge fund followed a path from Russia to bank accounts in Switzerland and luxury properties in Dubai – ending up at a small firm based in the British Virgin Islands that specialises in setting up offshore companies for clients who want to remain in the shadows.

This is the story of behind-the-scenes players in the Magnitsky affair – and the tale of how an offshore go-between provided shelter to fraudsters, money launderers and other shady characters from Russia, Eastern Europe and the United States.

In early 2008 , lawyers working for a London-based hedge fund scrambled to prove that their client had been the victim of a corporate heist.

A gang of mobsters, the lawyers believed, had quietly transferred ownership of three Russian businesses belonging to the hedge fund to a secrecy-cloaked company in the Caribbean.

The offshore company had been established by Commonwealth Trust Limited, a firm in the British Virgin Islands that sets up overseas companies and trusts for clients around the world.

Lawyers for the hedge fund’s owner, Hermitage Capital Management Limited, contacted CTL and demanded answers.

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05
April 2013

Canadian’s firm used in huge Russian tax scandal

CBC News

It’s a tale with the cloak-and-dagger intrigue of a Hollywood thriller: a $230-million heist, corrupt Russian police and government officials, prison beatings, a dead lawyer, Kafkaesque trials and a diplomatic spat between international superpowers.

And now, for the first time, secret files reveal how a Canadian-run offshore company in the Caribbean enabled the transfer of some of that money into a labyrinth of shell corporations around the world in a scandal known as the Magnitsky affair.

The company, Commonwealth Trust Limited or CTL, operated out of the British Virgin Islands, one of the most secretive jurisdictions in the shadowy world of offshore finance. Founded by Toronto millionaire Tom Ward, CTL’s business was registering and administering new BVI corporations for a global clientele.

While there’s no evidence CTL or Ward actively participated in schemes to rob the Russian treasury, documents found amid a massive leak of financial records indicate that the company often failed to check who its real clients were and what they were up to — a practice that allowed the colossal fraud at the heart of the Magnitsky case to unfurl.

“In a sense, CTL became a really good tool in the toolkit of organized criminals,” said Jamison Firestone, a lawyer who represented the company victimized in the Russian heist.

“Organized criminals figure out, ‘Who can we contact to help us move money? Who can we contact to set up offshore companies and help us open bank accounts abroad?’ It’s because firms like CTL exist that this stuff can go on.”

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