I usually ignore right wing blogs, at least when commenting here, for one good reason; they seem so irrelevant given their somewhat loose grasp of reality . Sometimes though something really grab my attention, usually because it is so offensive. This blog from the Sovereign Society is a case in point. When describing how to protect assets from any claim from creditors they describe a case that in their opinion went wrong, as follows:

To force "deadbeats" to pay their bills, judges have a variety of tools available, up to and including jailing a debtor. This last remedy isn't common, but it does exist most notably, in situations where a debtor or the debtor's legal advisors have made serious planning errors.

One of the most famous examples where this scenario unfolded came in a case involving a Mr. and Mrs. Anderson, who allegedly were engaged in a Ponzi scheme. The Federal Trade Commission (FTC) sued the Andersons in federal court and obtained a US$20 million judgment.

When the Andersons claimed that they couldn't pay the judgment, the FTC obtained a court order requiring the couple to repatriate US$8 million in assets from their Cook Islands trust. The Andersons failed to obey this order and the judge jailed the couple for civil contempt. A federal appeals court affirmed this decision.

The judge released the Andersons from jail only after they:

• Appointed a company controlled by the FTC as the new trustee of their trust
• Amended the trust to remove the FTC from the definition of "excluded persons" under the trust deed
• Resigned as protectors of their trust

In many ways, the Anderson case was a worst-case scenario due to serious errors in their trust. Their most important error was that the Andersons were named as both co-trustees and co-protectors of the trust, a position they gave up only when their trial began.

Let's be clear about what they think they're wrong here: they have no apparent concern about the Ponzi scheme or those it might have defrauded. They have absolutely no concern that the trust that this couple created was clearly nothing of the sort. The creation of a trust requires that the settlor has given the asset passed into trust away so that they can no longer benefit from it and its legal ownership rests in the possession of another person. This very obviously did not happen in this case, but the Sovereign Society ignore that fact. Their message is this:

Fortunately, in the vast majority of situations, you don't need to go to jail to protect your assets. All you have to do is to make sure that asset protection isn't transparently the sole purpose of your plan. Returning to your example, let's say after consulting with a qualified attorney in the United States, you jointly decide that a Cook Islands trust should be part of your asset protection plan. For instance, an integrated structure that includes a Cook Islands trust might also contain your last will and testament, a living trust, and possibly a domestic limited partnership.

The time to set up this type of plan isn't after you've received notice of a lawsuit. You should form it when there are no pending claims against you, or that you even know about. That way, it's unlikely that a court can later declare your plan was intended to "hinder, delay or defraud" creditors, thus making the transfer of assets a voidable "fraudulent conveyance" in the eyes of the law. This determination is best made after consultation with an experienced asset protection attorney [because] ... if there are legitimate purposes not related to asset protection, you've gone a long way toward insuring that your planning will hold up in court.

What seems to be the core of the advice? Simply this: if you're going to do a fraud gets your mechanism to retain the benefit in place before perpetrating the act, and make sure it's in an offshore secrecy jurisdiction.

I find that staggering, but these people publish this stuff as if it is sound professional advice. It isn't. Like the secrecy jurisdictions they promote, this advice is about perpetrating abuse. Far from promoting freedom, blogs such as this actually promote the subversion of the market by creating secrecy that denies market participants the opportunity to enjoy a level playing field by being in equal possession of the facts. Far from promoting the optimal outcome that market theory supposedly creates, they actually and knowingly promote the abuse of markets, and a deliberately suboptimal outcome that benefits only those who are willing to abuse the rules.

For those of us who think markets have a serious, long-term and fundamental role to play in ensuring that human beings do have the chance to exchange goods and services for mutual benefit this is profoundly offensive, not least because of the cost that this sort of abuse, promoted in the name of freedom, imposes on the rest of society by requiring regulation to prevent its perpetration.