Bringing Offshore Money Home

“Anybody has a right to evade taxes if he can get away with it.”

— J. P. Morgan

This is the second in a series on tax evasion that begins here.

So, how do you get the money back home? You’ve seen the movie methods of cash in false-bottomed suitcases or taped to your body, or diamonds set in a cheap necklace.

Take the case of California rapper Snoop Dogg. In the summer of 2015, Snoop Dog tried to sneak $422,000 in cash through an Italian airport in his Louis Vuitton luggage. He was stopped by the police. Carrying more than €10,000 in cash triggers anti-money laundering laws.

Snoop Dogg’s agent explained that it was a minor administrative infraction in not declaring amounts more than €10,000 on leaving, a mere misunderstanding. But the leaving is not the issue.

Snoop Dogg earned the funds legally. The question is why did he take the risk of carrying so much cash that could be stolen when he could have transferred the amount through a bank with the click of a mouse? What would Snoop Dogg do with the cash earned in a foreign country for which there was no record in the U.S.? None of the reporters who cover the celebrity beat asked those questions. There might well be a legitimate reason; but we, who are lucky to have a few hundreds in our wallets on occasion, may never know.

The Possibilities Are Endless.

Creative methods abound to get offshore money home. Of the many artful ways there is a morbid one worthy of an evil genius. It’s a phony insurance policy issued by a mailbox foreign insurance company.

There are multitudes of banks and insurance in the Caribbean islands that are no more than an address on a mailbox. You can incorporate them with the same ease as incorporating a company in the US. The cost is a bit more. It may be about $75,000.

This scheme revolves around the fact that an insurance policy payout is not taxable in the hands of the named beneficiary. So, how do you put it to work?

You must know someone living in your home country who is dying; everyone does. Perhaps a relative. Say you take out a phoney insurance policy on dear Uncle Joe’s life. This is illegal in most countries, but this scheme is not with a real insurance company. This phony company exists only to facilitate tax evasion.

When your Uncle Joe dies, the insurer pays. You have:

• a policy, and
• Uncle Joe’s valid death certificate issued by your own government.

How can the taxman prove otherwise? The cash goes from the tax haven insurance company into your bank account in the U.S., tax-free.

If the phony insurance policy is too gruesome for you, you can find something more appealing. A simple workaround would be to get a credit card from a foreign bank and pay it off through your secret bank account.

If you’re not the DIY type, there are service providers. In a report for the South China News, Peter Guy tells of one. For a modest 22% commission, the service will deliver suitcases of cash to New York or Vancouver. Guaranteed.

There’s no limit to the imaginative solutions wealth management advisors can devise. Mother Jones reported a leaked memo from one in the Jersey islands setting out an additional 11 innovative ways that you can review. But you have the general idea and can see the problem.

Acknowledgement: image by Belle Co on Pexels.