How to Hide $400 Million
November 30, 2016 7:11 AM Subscribe
When a wealthy businessman set out to divorce his wife, their fortune vanished. The quest to find it would reveal the depths of an offshore financial system bigger than the U.S. economy. By Nicholas Confessore in the New York Times Magazine
It's interesting that, other than Switzerland and Luxembourg, almost all of the offshore tax havens are protectorates of either the UK or the US. But leaders in the UK and the US can do nothing about them, sorry, it's just an impossible problem to deal with, we have no idea how these rogue entities keep their good standing in the world financial system and there's no possible way we can cut off financial relationships with them, it's just not possible, hey look over there.
posted by clawsoon at 8:28 AM on November 30, 2016 [22 favorites]
posted by clawsoon at 8:28 AM on November 30, 2016 [22 favorites]
The problem with cracking down on tax avoidance is that, if the super-rich paid their share, governments would be awash in revenue, and unable to say that there is no money for healthcare/schools/social programs (after all, how many nuclear missiles and billion-dollar fighters can you really buy?). Which means that poor people would get things for free, thus rewarding them for bad lifestyle choices.
posted by acb at 8:36 AM on November 30, 2016 [22 favorites]
posted by acb at 8:36 AM on November 30, 2016 [22 favorites]
One piece of paper, from a lender called Fifth Third Bank...
Zing! Take that, Midwestern banking! That's written like 5/3 is some internet lender, and not one of the oldest banks in the US.
posted by hwyengr at 8:45 AM on November 30, 2016 [13 favorites]
Zing! Take that, Midwestern banking! That's written like 5/3 is some internet lender, and not one of the oldest banks in the US.
posted by hwyengr at 8:45 AM on November 30, 2016 [13 favorites]
Also, I wonder if Oesterlund got any government help when he was setting up the scam companies that he made a fortune off of
Well there's the internet itself, for starters, and all of the publicly funded or subsidized infrastructure that makes it possible.
posted by jedicus at 8:48 AM on November 30, 2016 [2 favorites]
Well there's the internet itself, for starters, and all of the publicly funded or subsidized infrastructure that makes it possible.
posted by jedicus at 8:48 AM on November 30, 2016 [2 favorites]
As a fellow Midwesterner, that's what they get for having that stupid name.
posted by leotrotsky at 8:51 AM on November 30, 2016 [12 favorites]
posted by leotrotsky at 8:51 AM on November 30, 2016 [12 favorites]
Also, I wonder if Oesterlund got any government help when he was setting up the scam companies that he made a fortune off of
There was this:
posted by clawsoon at 8:52 AM on November 30, 2016 [2 favorites]
There was this:
Unknown to his wife, Oesterlund had even purchased an apartment complex in Georgia, using $23 million in loans backed by the Housing and Urban Development Department. ...after the sale closed in 2013, other documents indicated, control of the apartment complex was shifted to a Bahamian company, and finally into the trust. The United States government appeared to be guaranteeing a $23 million loan to a Cook Islands trust in the South Pacific.No word on whether it was a scam, but one can make assumptions.
posted by clawsoon at 8:52 AM on November 30, 2016 [2 favorites]
That's written like 5/3 is some internet lender, and not one of the oldest banks in the U.S.
They're so old they have one of only 100 2-digit URLs in existence! I wasn't surprised to see Wells Fargo involved with this mess. I'm sure they could have opened a few extra accounts in his name without him noticing. But I guess that sort of thing is for poor people. Especially poor people of color.
posted by TedW at 9:12 AM on November 30, 2016
They're so old they have one of only 100 2-digit URLs in existence! I wasn't surprised to see Wells Fargo involved with this mess. I'm sure they could have opened a few extra accounts in his name without him noticing. But I guess that sort of thing is for poor people. Especially poor people of color.
posted by TedW at 9:12 AM on November 30, 2016
If i could press a button that would instantly and permanently delete all hidden monies like this from the global economy, I would do so in a heartbeat and sleep peacefully tonight.
posted by JohnFromGR at 9:26 AM on November 30, 2016 [4 favorites]
posted by JohnFromGR at 9:26 AM on November 30, 2016 [4 favorites]
If i could press a button that would instantly and permanently delete all hidden monies like this from the global economy, I would do so in a heartbeat and sleep peacefully tonight.
But tomorrow would be torn to pieces by a mob of sociopaths suddenly deprived of their livelihoods.
posted by acb at 9:39 AM on November 30, 2016 [3 favorites]
But tomorrow would be torn to pieces by a mob of sociopaths suddenly deprived of their livelihoods.
posted by acb at 9:39 AM on November 30, 2016 [3 favorites]
Every so often, stories like this surface - and in the cases of places like Russia and China, the sheer amounts of illegally abstracted money are beyond comprehension, to the point where I find it impossible to visualise certain factors. Like - what have the effects on the global economy been of having this stuff vanish? What the hell is it all actually doing right now, that benefits those who control it? And what would happen if it was all put back? Or deleted? And why the hell isn't the disappearance of GDP-sized chunks of change leaving enormous ripples in the space-time fabric of finance?
In short - I read the words. I am reasonably numerate. I have no flipping idea what any of this actually means, because every time I try and use logic to create a map of reality here, it fails.
I can understand how something like LIGO can detect two black holes colliding a billion light years away. I cannot understand how you can move trillions out of the light and still be farting through silk.
posted by Devonian at 10:52 AM on November 30, 2016 [15 favorites]
In short - I read the words. I am reasonably numerate. I have no flipping idea what any of this actually means, because every time I try and use logic to create a map of reality here, it fails.
I can understand how something like LIGO can detect two black holes colliding a billion light years away. I cannot understand how you can move trillions out of the light and still be farting through silk.
posted by Devonian at 10:52 AM on November 30, 2016 [15 favorites]
almost all of the offshore tax havens are protectorates of either the UK or the US.
The US itself is a great tax-haven for non-citizens. We don't mind when wealthy foreign businessmen hide their wealth here, as long as US businesses aren't hiding their wealth elsewhere.
posted by muddgirl at 10:57 AM on November 30, 2016 [1 favorite]
The US itself is a great tax-haven for non-citizens. We don't mind when wealthy foreign businessmen hide their wealth here, as long as US businesses aren't hiding their wealth elsewhere.
posted by muddgirl at 10:57 AM on November 30, 2016 [1 favorite]
Meanwhile, over on Hacker News, the top comment on this story prompted a vigorous discussion of prenuptial agreements.
(Alas, my contribution to the colloquium got quickly downvoted and flagged out of existence.)
posted by bunbury at 11:44 AM on November 30, 2016
(Alas, my contribution to the colloquium got quickly downvoted and flagged out of existence.)
posted by bunbury at 11:44 AM on November 30, 2016
this Monbiot article from today describes a similar network as the one in the FPP but for political power and misinformation.
posted by yoHighness at 11:54 AM on November 30, 2016 [3 favorites]
posted by yoHighness at 11:54 AM on November 30, 2016 [3 favorites]
I amazed that this kind of money could be made off of internet scams. I always thought it was more of a scrape-to-get-by penny-ante business. Hmmmm.
posted by mr_roboto at 12:03 PM on November 30, 2016 [1 favorite]
posted by mr_roboto at 12:03 PM on November 30, 2016 [1 favorite]
I always thought it was more of a scrape-to-get-by penny-ante business.
No, those are the people it targets. 'Wealthmakers' like this are parasites.
posted by FatherDagon at 1:26 PM on November 30, 2016 [2 favorites]
No, those are the people it targets. 'Wealthmakers' like this are parasites.
posted by FatherDagon at 1:26 PM on November 30, 2016 [2 favorites]
What the hell is it all actually doing right now, that benefits those who control it?
It's still in the world - it's his luxury yacht for example. The yacht's ownership might be shrouded in shell companies and trusts, but in reality we all know that Oesterlund owned it. It's his yacht, he gets to take it to Monaco with his mistress and do with it as he pleases, no-one else is allowed to use it.
But it doesn't show up on his books. It's wealth he presumably doesn't need to pay tax when acquiring or capital-gains-ing or selling, or count it among his assets if, say, he was involved in a divorce... :)
I assume the same goes for factories, real estate, skyscrapers, restaurants, aircraft, etc. A vast black economy dodging the laws and taxes of their country of actual origin and actual operation.
posted by anonymisc at 7:07 PM on November 30, 2016 [3 favorites]
It's still in the world - it's his luxury yacht for example. The yacht's ownership might be shrouded in shell companies and trusts, but in reality we all know that Oesterlund owned it. It's his yacht, he gets to take it to Monaco with his mistress and do with it as he pleases, no-one else is allowed to use it.
But it doesn't show up on his books. It's wealth he presumably doesn't need to pay tax when acquiring or capital-gains-ing or selling, or count it among his assets if, say, he was involved in a divorce... :)
I assume the same goes for factories, real estate, skyscrapers, restaurants, aircraft, etc. A vast black economy dodging the laws and taxes of their country of actual origin and actual operation.
posted by anonymisc at 7:07 PM on November 30, 2016 [3 favorites]
What the hell is it all actually doing right now, that benefits those who control it?
Insuring that the super-rich can never lose control of the global system. The people that have billions of dollars mostly care about not losing their billions of dollars, ever. For any reason, including your petty "laws". They don't need to actually buy anything, they own everything imaginable already. But anything that reveals the extent of their holdings and greed, much less tries to take any back, is a threat.
Also, Superyachts. A fucking shitload of superyachts.
posted by T.D. Strange at 7:26 PM on November 30, 2016 [3 favorites]
Insuring that the super-rich can never lose control of the global system. The people that have billions of dollars mostly care about not losing their billions of dollars, ever. For any reason, including your petty "laws". They don't need to actually buy anything, they own everything imaginable already. But anything that reveals the extent of their holdings and greed, much less tries to take any back, is a threat.
Also, Superyachts. A fucking shitload of superyachts.
posted by T.D. Strange at 7:26 PM on November 30, 2016 [3 favorites]
Reading this tail of complexity and legal bills I begin to see the appeal of the violent side of organized crime. It seems much more straightforward.
posted by Pembquist at 7:29 PM on November 30, 2016 [2 favorites]
posted by Pembquist at 7:29 PM on November 30, 2016 [2 favorites]
If a mere mortal were to withdraw or deposit any sum over $10,000 in a US bank (or even appear to be doing so in a series of transactions), the bank is obligated to make a Cash Transaction Report to the Treasury Department. I get the feeling that the super rich aren't troubled by such silly red tape when millions of dollars get hoovered out of the country into the hands of Totes Legit Partners Ltd headquartered in NonExtraditionstan.
posted by dr_dank at 8:30 PM on November 30, 2016 [2 favorites]
posted by dr_dank at 8:30 PM on November 30, 2016 [2 favorites]
That's because they aren't doing it in cash. CTRs are filed for transactions involving cash or cash equivalents, not checks, wire transfers, etc.
posted by wierdo at 6:45 AM on December 1, 2016 [1 favorite]
posted by wierdo at 6:45 AM on December 1, 2016 [1 favorite]
« Older A description of the camp and protests | “You don’t have to eat it,” she offered. “Just... Newer »
This thread has been archived and is closed to new comments
I'm sure president-elect and noted tax-avoidance expert Donald Trump will get to work right away on seeing this unit fully funded and staffed; a great place to start draining the swamp.
The amount of effort the wealthy put into avoiding taxes, indeed this whole idea that taxes are evil, infuriates and puzzles me. Perhaps I am not wealthy enough to be insulated from the idea that government programs help a lot of people who can't afford anything they may want or need. Also, I wonder if Oesterlund got any government help when he was setting up the scam companies that he made a fortune off of; I wouldn't be surprised if he took advantage of good deals on loans, tax breaks for small businesses and so forth.
posted by TedW at 8:25 AM on November 30, 2016 [16 favorites]