How to Hide $400 Million, By Nicholas Confessore - The New York Times (Nov. 2016)
►https://www.nytimes.com/2016/11/30/magazine/how-to-hide-400-million.html
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
How to Hide $400 Million
►http://www.nytimes.com/2016/11/30/magazine/how-to-hide-400-million.html
In any given year, trillions of dollars sit safely in the offshore financial world, effectively stateless, protected by legions of well-compensated defenders and a tangle of laws deliberately designed to impede creditors and tax collectors. Even the United States government finds it challenging: A special Internal Revenue Service division known as the “wealth squad,” set up in 2010 to crack down on high-end tax evaders with multinational holdings, today has enough manpower to assess only about 200 cases a year.
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This didn’t just threaten Oesterlund’s fortune. It also had the potential to carve open a portal into the world of offshore finance, a place that the global elite has spent hundreds of millions of dollars to build and defend. In the offshore archipelago, their interests are hidden behind shell companies and trusts, their anonymity guaranteed under the law, from Delaware to the Bahamas to the South Pacific. James S. Henry, a former chief economist at McKinsey, calls the offshore financial world the “economic equivalent of an astrophysical black hole,” holding at least $21 trillion of the world’s financial wealth, more than the gross domestic product of the United States.
This darkness shields the tax-averse businessman and the criminal alike. Dictators use the offshore system to loot their own countries. Drug lords use it to launder money. As Gabriel Zucman, a University of California economist and an offshore expert, puts it: “They use the same banks, they use the same incorporation agents to create shell companies, they send money in the same ways.”