9 My del.icio.us bookmarks for December 28th Posted on December 29 2008 These are my links for December 28th: Bernard Madoff probe focuses on offshore tax havens | – Fraudulent funds located in tax haven? Surely not! 9 9 Responses to “My del.icio.us bookmarks for December 28th” Creg says: December 29 2008 at 5:44 pm Where is the news in that article? Investment funds have been set offshore? I think you will find it hard to find any investment manager who hasn’t sent money offshore, as every basic portfolio should try and minimise risk by spreading investments globally, than only investing in one geographical location. As you have said “offshore” means any way where Madoff isn’t, so anyway but the US then. Shock, horror, Madoff sent investment money outside of the US? good story? Tax Research LLP says: December 29 2008 at 7:36 pm Creg On this occasion the message is clear. I have to assume you’re playing dumb not to work it out. Let me give you the New York Post version if it makes it easier to understand: “Investigators believe that Bernard Madoff has stuffed hundreds of millions of dollars in Ponzi profits into offshore tax havens from which they could prove tricky to recover. In the weeks since his Dec. 11 arrest, forensic accountants have been scouring Madoff’s books as federal officials ready an indictment against the hated hedge-funder, who remains under house arrest in his $7 million Upper East Side penthouse. The accountants believe Madoff regularly sent bundles of money to offshore accounts in the Caribbean and Europe, the Observer newspaper in London reported today.” The message is as plain as it is possible to make: places like those in which you work are being used to hide fraudulently obtained funds from investigators. Shall I put it another way? Tax havens are being used to facilitate fraud. In a sense you’re right, that’s not a story, it’s what happens every day. But given what the havens claim day in and day out it is worth drawing attention to Richard Creg says: December 29 2008 at 8:28 pm Except when these accounts were opened Madoff was clean. I’m sure lots of Due Dilligence was carried out and the SCC was making him smell of roses. WHo exactly allowed him to get away with all this fraudulent trading for years dispite many warnings? The US regulators! Can OFC expect that if US regulators give a clean report on someone wanting to deposit money, that they are clean? Yes, hindsight is a great thing. In fact anyone onshore who has dealt with any of this man’s investments and money has been dealing with fraudulent gains. Unfortunately Madoff has had years to hide his ill gotten gains, while the US has given him a clean report and essentially aided him in this, by not following up on compliants, now they have had less than 2 months to find what money has been placed where and it is the OFC’s fault. They even have Madoff in custody, but let him out to his penthouse, shouldn’t they be keeping in a cell until he spills the beans, after all he is the only one with the big picture of where the money is. But you only blame the OFC’s! But amazingly it is the OFC’s fault again. Tax Research LLP says: December 29 2008 at 8:57 pm Creg It is abundantly clear the US failed. Do I really need to spell out the blindingly obvious for you? Does that exonerate the abuse tax havens facilitate? Why is it you guys perpetually feel it is OK to work at the level of the lowest common denominator? Richard Creg says: December 29 2008 at 9:29 pm And why is it nearly all your blogs are on OFC’s, and only very few on poor US and UK regulation that cuases these frauds. Do a count and see. Just today there was a report of 2.7 million people in the UK are now claiming disability. And 140,000 families recieve more a year in benefits than the average working family recieves in wages after tax Aren’t these examples of wasted taxes?. The Madoff case is blantently the US’s fault and all you focus on is where the money, that the US was verifying was clean has gone and has not yet been found in a whole 2 months of the fraud becoming public. That is an extraordinaryily narrow view and is starting to show yor campaign against “tax havens” is becoming a blinkered obsession. If you do succeed in your crusade and destroy the economy of these small islands, the UK is going to end up subsidising them with your taxes anyway. And the UK and US will still be screwing up and allowing fraud after fraud, essentially solving nothing. At some stage you have to stop blaming “tax havens” for all the sins of the world and look at the bigger picture David says: December 30 2008 at 5:28 am Creg makes some very valid points. By definition the SEC have been deeming Madoff to be operating a pukka business for many years and have deemed him to be “fit and proper”. He was also chairman of NASDAQ. How is the compliance department of any offshore financial institution likely to be any competent to detect anything untoward than the SEC regulators and the auditors of Madoff’s business ? He succeeded in pulling the wool over many prestigious and supposedly competent eyes. In this instance blaming an offshore jurisdiction for facilitating the crime is rather like blaming Ford for manufacturing the getaway vehicle used in a bank robbery. A crook of this nature and of such technical cleverness to conceal it for so many years was always going to find a way to cover it up and although the use of offshore finance centres will have helped, the failure to detect the fraud by onshore regulators is mind-boggling. That’s where the finger-pointing should be focused. Gareth says: December 30 2008 at 10:19 am Creg, At a guess, “nearly all” of Mr Murphy’s blogs are on tax havens, rather than on regulation standards for inverstment fraud, because this is the Tax Research blog, rather than the investment fraud one! Ultimately, the Ponzi schemes were fraud, the proceeds of the funds were, it seems, channelled off shore. Yes, nobody noticed for a while (if they had, it wouldn’t have been a successful fraud!) Yes, regulation may have been lax, but the financial infrastructure – of accountants, banks, off shore centres and the light that allowed that channelling has to bear some responsibility. Surely if you follow you’re arguments to the logical conclusion, you’d be saying that you can’t blame a structure that allows a bank robber to hide his funds off shore, because the government shouldn’t have allowed the bank to be robbed in the first place! Tax Research LLP says: December 30 2008 at 12:25 pm Guys You seem to have not noticed the fact that the Tax Justice Network calls London the biggest tax haven in the world, lists New York as a haven, I have criticised Delaware, and a great deal of the report ‘Creating Turmoil’ http://www.taxresearch.org.uk/Documents/CreatingTurmoil.pdf is a criticism of UK regulation. OK, so Madoof was in the States – that’s not my main focus I am not blind to regulation abuse wherever it might be – but why let that spoil your persecution complex? Richard Creg says: December 30 2008 at 3:13 pm Richard you say that but as I said around 90% are concerning “offshore tax havens” and very few on London, why? as for a persecution complex, look at the evidence, of all your posts how many are on Cayman, BVI, Bermuda, Bahamas, IOM, Singapore, Lux, Swiss and the Channel Islands, and how many on London? Gareth it is a the “Tax Research blog”, not a “Blame the Offshore Fiancial Centre for everything blog” This very post was on where the funds of an investment fraud ended up, rather than tax. Using your bank analagy, with Richards latest post and M-invest, you are now blaming those peaple that deposited money in the bank for the bank robery and those who built the getaway vehicle! Perhaps you should start laying the blame on the robber and the bank managers that appeared to forget to use the security system.