Monday night I attended the launch of the Singaporean branch of the International Business Structuring Association. I decided to join as the opportunity to learn and network seems very attractive. In the networking session after the formal presentation, I was chatting with 2 guys who strongly recommended that I watch Rogue Trader.
Fortunately I managed to watch the movie on Tuesday night. Rogue Trader is a great movie not just because it is set in 1990's Singapore but because it reveals how a culture of greed causes otherwise smart people to naively succumb to the promise of quick wealth made in dishonest ways. I firmly believe that there is no honest way to quick wealth. There is no honest way for American persons in particular, to not pay any taxes. Anytime someone comes my way with a "get rich quick" scheme I run away as quickly as I can.
Unfortunately, yet another "offshore" investment scheme was exposed this week. It caught my attention for 2 reasons. Firstly, the players were based in the Caribbean - an area I know better than most. Secondly, one of the key people is known to me. Here is one report....
WASHINGTON D.C., United States, Tuesday March 25, 2014, CMC - The United States Department of Justice (DOJ) says that an American and two Canadian citizens have been charged with using offshore accounts in the Caribbean to launder US$200,000.
The DOJ said that Joshua Vandyk, a US citizen, and Canadians Eric St-Cyr and Patrick Poulin, were nabbed in an undercover sting operation.
They were indicted for conspiracy to launder monetary instruments, the DOJ and Internal Revenue Service (IRS) announced.
The indictment alleges that Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud.
The DOJ said the Cayman Islands and Turks and Caicos-based defendants allegedly assisted undercover law enforcement agents, posing as US clients, in laundering “purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners.
“Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented the funds would not be reported to the US government,” the statement said.
The DOJ said the indictment was returned in the Eastern District of Virginia on March 6 and unsealed on March 12, when all three defendants were arrested in Miami, Florida.
In addition to the conspiracy charge, Vandyk, St-Cyr and Poulin were each charged with two counts of money laundering.
“These charges result from an extensive investigation and are the latest demonstration of the Department’s resolve to find and prosecute those who aid money laundering and tax fraud globally,” said DOJ Deputy Attorney General James M. Cole.
According to the indictment, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based in the Cayman Islands.
St-Cyr was the founder and head of the investment firm, whose clientele included numerous US citizens, the DOJ said.
It said Poulin, an attorney, at a law firm based in the Turks and Caicos, worked and resided in Canada and in the Turks and Caicos. His clientele also included numerous US citizens.
According to the indictment, Vandyk, St-Cyr and Poulin solicited US citizens to use their services to hide assets from the US government.
It said Vandyk and St-Cyr directed the undercover agents posing as US clients to create offshore foundations with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with US clients.
“Vandyk and St-Cyr used the offshore entities to move money into the Cayman Islands and used foreign attorneys as intermediaries for such transactions,” the indictment states.
It said Poulin established an offshore foundation for the undercover agents posing as US clients and served as a nominal board member in lieu of the clients.
The indictment says Poulin transferred wire payments from the offshore foundations to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside the United States in the name of the offshore foundation.
“The investment firm represented that it would neither disclose the investments or any investment gains to the US government, nor would it provide monthly statements or other investment statements to the clients,” the statement noted.
Chief of IRS Criminal Investigation, Richard Weber, said the defendants were in the business of creating layers of transactions so their US clients could launder criminal proceeds.
“IRSCriminal Investigation is committed to unraveling complex financial and money laundering schemes and holding those accountable for creating mechanisms to hide assets offshore and dodge the tax system,” he added.