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<h1 style="text-align: center;">how to hide $400 million dollars</h1>
<h2>[WHAT]</h2>
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<li>] by NICHOLAS CONFESSORE @nytimes.com - ]</li>
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<h2>[WHY]</h2>
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<li>]&nbsp;</li>
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<h2>[WHERE]</h2>
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<li><strong>] READ THE FULL ARTICLE</strong></li>
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<li>]&nbsp;<a href="http://www.nytimes.com/2016/11/30/magazine/how-to-hide-400-million.html?_r=0" target="_blank">http://www.nytimes.com/2016/11/30/magazine/how-to-hide-400-million.html?_r=0</a></li>
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<h2>[WHEN]</h2>
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<li>] 2016-12-03</li>
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<h2>[EXAMPLE]</h2>
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<li>] a few weeks after she realized her husband was finally leaving her, Sarah Pursglove flew down to the Bahamas to figure out how much money he really had.&nbsp;</li>
<li>]&nbsp;Her husband, a Finnish entrepreneur named Robert Oesterlund, had sworn to a Canadian court that his immediately calculable &ldquo;net family property&rdquo; totaled just a few million dollars. Pursglove was skeptical. She could come up with several family purchases worth more than that off the top of her head. There was the 165-foot yacht, D&eacute;j&agrave; Vu &mdash; that cost a few million dollars a year just to keep on the water. There was the $30 million penthouse at the Toronto Four Seasons, which was still being renovated. It wasn&rsquo;t their only home. The D&eacute;j&agrave; Vu wasn&rsquo;t even their only yacht.</li>
<li>]&nbsp;Her first answers came that morning in the Bahamas, as she quickly rifled through papers in their soon-to-be-former vacation home.&nbsp;&nbsp;In a pile of mail was a statement from a bank in Luxembourg showing an account with at least $30 million in cash. Finally, there was a statement from their accounting firm. She had never seen that before, either. The accountants seemed to think her husband was worth at least $300 million.</li>
<li>]&nbsp;But even as Pursglove was repacking her suitcase for the flight home, her family&rsquo;s fortune was vanishing into an almost impenetrable array of shell companies, bank accounts and trusts, part of a worldwide financial system catering exclusively to the very wealthy.&nbsp;</li>
<li>] In recent decades, this system has become astonishingly effective at &ldquo;offshoring&rdquo; wealth &mdash; detaching assets, through complex layers of ownership and legal planning, from their actual owners, often by hiding them in another country. Created by lawyers, accountants and private bankers and operating out of a global archipelago of European principalities, former British colonies and Asian city-states, the system has one main purpose: to make the richest people in the world appear to own as little as possible.</li>
<li>]&nbsp;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 &ldquo;wealth squad,&rdquo; 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.</li>
<li>] In 2012, Oesterlund and Pursglove moved with the children to Toronto; at the end of the year, Oesterlund raised the idea of separating, Pursglove says,&nbsp;</li>
<li>] It was in early 2013, when she learned that her husband had sought to sell off Xacti, Pursglove told me, that she started to think about hiring lawyers of her own.&nbsp;Eventually, she found herself in the offices of&nbsp;<a href="http://www.law.miami.edu/news/2015/september/alumnus-jeffrey-fisher-circuitous-journey-top-divorce-attorney" target="_blank">Jeffrey Fisher</a>.&nbsp;Fisher was not&nbsp;a normal family lawyer.&nbsp;When he opened his own firm with a partner in West Palm Beach in the late 1980s, he began specializing in cases that were equal parts divorce and white-collar litigation, representing the discarded wives of rich men with complex business concerns.&nbsp;</li>
<li>] The Cook trust was a bad sign. A typical estate-planning trust is designed to allow someone to benefit from a property &mdash; a car, a home, a plane, a bank account &mdash; without technically owning it or controlling it. An independent trustee, sometimes an individual, sometimes a specialized firm, is assigned to make decisions about the best use of the assets. That independence can, for example, provide a tax advantage or prevent a spendthrift beneficiary from plowing through an inheritance. But in some cases, the claim of independence is a sham. The trustees are puppets; the settlor still controls the asset in practice. And trusts organized in the Cook Islands, a self-governing state associated with New Zealand, are particularly difficult to investigate. Cook courts typically do not recognize American court orders, including divorce judgments. To sue a Cook trust, you have to actually fly to the Cook Islands, in the middle of the South Pacific, roughly 6,000 miles southwest of Florida. &ldquo;It&rsquo;s like Switzerland used to be, but squared,&rdquo; Fisher told me. Once assets were hidden inside a Cook trust, he had learned, it was almost impossible to get them out.</li>
<li>]&nbsp;Fisher knew he needed to act very quickly. He didn&rsquo;t know where Oesterlund had put the family&rsquo;s money, exactly. He didn&rsquo;t have any direct evidence of fraud. But the longer the case dragged on, the more opportunity Oesterlund might have to drain assets out of the country and into untouchable accounts overseas.</li>
<li>] Fisher had to freeze Oesterlund&rsquo;s transactions in place until he could gather more evidence. The only way to do that, Fisher concluded, was to hit him from two sides at once. In late March 2014, Fisher filed a divorce action on behalf of Pursglove in Palm Beach County, hoping to wrest the divorce proceeding back to Florida from Canada. But he also prepared a related civil complaint, citing the Cook trust and Oesterlund&rsquo;s threatening emails:&nbsp;</li>
<li>] The return showed that RSOP had grossed more than $73.5 million that year, an amount that Pursglove says she found astonishing. But when Fisher scrutinized the tax return, he found something even more shocking. Despite the impressive grosses, RSOP was reporting ordinary business income of just $12,284. Virtually all the revenue had somehow evaporated.</li>
<li>] Fisher&rsquo;s legal blitz was having the intended effect. In a rush to unfreeze his assets, Oesterlund invoked his right to an emergency hearing. That handed Fisher a crucial opening: Florida law now gave Fisher the right to demand documents, on a highly expedited basis, from any company or person who might have evidence relevant to the hearing.&nbsp;Shortly thereafter, Fisher&rsquo;s detailed requests began arriving on the desks of Oesterlund&rsquo;s bankers, his lawyers, his accountants and tax planners, his stockbroker and most of his senior executives.&nbsp;</li>
<li>] What Oesterlund had done is known as <strong>&ldquo;transfer pricing,&rdquo;</strong> a practice that has come under growing criticism in recent years. Multinational corporations use it to shift their costs to high-tax countries and their profits to low-tax countries. <strong>Apple, for EXAMPLE</strong>, is an American company headquartered in Cupertino, Calif. Most of the research and development that goes into an iPhone happens in California. But according to Apple, if you buy an iPhone in Europe or Asia, the intellectual-property rights contained in your phone actually belong to Apple subsidiaries in Ireland, where the company has negotiated for itself a special tax rate of around 2 percent. Apple charges those subsidiaries relatively little for the rights to this intellectual property, yet allows them to collect most of the money Apple makes from selling the phone. In 2011, the Irish subsidiaries &mdash; which conduct virtually none of Apple&rsquo;s research and build few of its products &mdash; collected two-thirds of Apple&rsquo;s 2011 worldwide pretax income.&nbsp;</li>
<li>] Fisher didn&rsquo;t have time to wait for the I.R.S. to take an interest in Oesterlund. He needed some other lever &mdash; a legal basis to look more closely into the myriad offshore entities that appeared to be connected to the Oesterlund companies.&nbsp;</li>
<li>] &nbsp;Now he realized not only that Xacti had come under investigation, but also that the investigation created an opening for Pursglove. Oesterlund had signed a binding agreement with the Florida attorney general just nine months earlier: To keep Xacti from skipping out on refunds, the agreement barred Oesterlund from implementing &ldquo;any change in the form of doing business or organizational identity as a method of avoiding the terms and conditions set forth in this settlement agreement.&rdquo;</li>
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<h2>[HOW-TO]</h2>
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<li>]</li>
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<h2>[REFERENCE]</h2>
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<li>] SRC = <a href="/view/article?id=5443" target="_blank">best-of-HN-2016-11-30</a>, (#)comments(#)&nbsp;</li>
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<h2>[RELATED]</h2>
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<li>] # 4049 - <a href="/view/article?id=4049" target="_blank">secrets-of-the-crown</a>&nbsp;- ] how the canadian governments pension fund uses tax loopholes to avoid paying canadian taxes</li>
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<h1 style="text-align: center;">&nbsp;</h1>

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