Analysis Reveals Key Players in Offshore Banking

Many of the world’s top’s banks – including UBS, Clariden and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways.

A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct.

A recent investigation by the International Consortium of Investigative Journalists (ICIJ) has identified “Nominee Directors” and financial gatekeepers as critical components of sophisticated tax evasion, capital flight and offshore banking schemes.   Perhaps the most startling piece of evidence is that the financial gatekeepers (in this case the bankers) were completely aware of what was going on and even served as the nominee director for numerous shell companies.

It’s time to add “Nominee Director”  and financial gatekeeper to the list of key players needed for a successful money laundering or tax evasion scheme; right alongside lawyers, real estate agents and notaries.  The legitimate banking activity, aptly coined  “private wealth management” and “institutional wealth services” joins an already lucrative industry that has served the criminal underworld for quite some time and takes the concept of compartmentalization to a new level.

Research into the tactics and techniques of successful drug smugglers found that those who remain in the trade, fine tune their skill sets over time.  Studies by Scott Decker and Michael Kenney have found that smugglers even go so far as to share best practices and adapt their methods to minimize risk and avoid detection.  Kenney referred the adaptation and evolution process as competitive adaptation in his landmark book, From Pablo to Osama: Trafficking and Terrorist Networks, Government Bureaucracies, and Competitive Adaptation.  Clearly there has been some competitive adaptation going on in the dodgy world of offshore banking and shell company incorporation.

The ICIJ investigation- involving some 86 journalists from 46 countries and a review of 260 GB of information on offshore banking– joins the work of other organizations like Global Witness, in a battle to uncover the true beneficial owners of shell companies formed in luxurious tax havens like the British Virgin Islands and the Cook Islands in the South Pacific.

Read about Who Uses the Offshore World and the Worldwide Response.

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