Thursday, July 21, 2016

THE PANAMA PAPERS INVESTIGATION

ICIJ
Speaking in June at a summit hosted by renowned events company TED (which stands for Technology, Entertainment, Design) in Banff, Canada, Gerard Ryle, Director of The International Consortium of Investigative Journalists (ICIJ), took the audience behind the scenes of the 12-month Panama Papers investigation. ICIJ, a project of The Center for Public Integrity, based the investigation on a trove of more than 11.5 million leaked files from the Panama-based Mossack Fonseca law firm.

A giant leak of more than 11.5 million financial and legal records exposes a system that enables crime, corruption and wrongdoing, hidden by secretive offshore companies.

New anti money-laundering and tax abuse rules proposed for EU
Officials said the Panama Papers helped "focus minds and speed up this work" as the European Commission continues to take aim at terrorism financing, tax evasion and other questionable conduct enabled by the offshore world.

Panama Papers companies revealed
Explore a searchable database that strips away the secrecy of nearly 214,000 offshore entities created in 21 jurisdictions, from Nevada to Hong Kong and the British Virgin Islands.

Read more about the data release


Wednesday, July 20, 2016

The Dirty and Unlawful Secrets of the Off-shore Fiscal Paradise Banks

Secret Jurisdictions Worldwide Hide Almost $36 Trillion US$
Part I
by Nelson Rodriguez-Lopez
July 20, 2016

The Owners: 
The Financial Elites, Delinquents, and Other Defrauders Who Never Pay Taxes

There are 89 secrets jurisdictions worldwide that the Tax Justice Network Report states where there are hidden between $24 to $36 trillions of shadowy and dirty fortunes 

Yes, you read correctly, TRILLIONS, for which their owners never paid taxes, based in a natural immunity given to them by the off-shore fiscal paradises. It is really indeed an obscene script.

For this reason, Tax Justice Network has developed a Master Plan Worldwide to stop this Corrupt Tax Evasion Scheme, in Panama and other areas of the World. 

The role of the BBV-SA (Banco Bilbao Vizcaya's) Secret Accounts, as revealed in the Panama Papers, are just the tip of the iceberg!

Who are these people who benefit from this Tax Evasion? Are they the drug dealers, the terrorist organizations, such as Al Qaeda, Isis, Hamas, World nobility, financial elites, high profile delinquents and others tax evaders & conspirators? 

Obviously, based in the laxity of state laws and transnational treaties of selective privacy, and the gross negligence of the enforcement agencies state, federal, transnational and even with the intentional purpose from them all, they are absolutely immune. As they say in Castilian (Spanish) language: "Aqui no hay santos ni tontos!" "There are no fools or saints here."  What we really have are white glove thieves who are totally immune. 

But what is really pathetic is the fact that those who are supposed to keep worldwide order are the most dangerous violators: bankers, lawyers and governmental officials of the highest level. The first two ones are the real architects that lurk in the shadows. The last ones are in conspiracy with the first ones, and are the facilitators for clients of anonymous accounts which are encouraged by the private banking business.

This modus operandis is now absolutely confirmed in the public disclosure of the BBV Secrets Accounts and the Panama Papers. 
The now described as the  "infamous" legal office of Mossack-Fonseca , (which is described as being totally involved in both financial scandals), fully operated 500 Off-shore Banks and registered 214,448 phantom companies
in the "so-called" fiscal paradises, half of them in the British Virgin Islands and Panama.

But what is absolutely astonishing to know is that between banks, lawyers, public accountants, agents and third-party facilitators, Mossack-Fonseca dealt with over 14,000 people.That is an immense network! Yet, this network represents only 5%off the hidden global capital network worldwide, which gives you an idea of the magnitude of the Tax Evasion and money laundering  industry that has currently grown since the seventies where there were nine off-shore banks, to almost ninety today. 

Had the owners 
of these these secrets accounts (They are only 0.1% of the worldwide population) paid taxes for the almost 36 trillion dollars, the budget of the tax evaded nations would have increased by $800 billions.

Can anyone imagine the ways the world could use this money to fight poverty, health diseases and other major scars of humanity? But, that is not about to happen, because for this kleptocracy, the pains of humanity do not affect their lifestyle or their deep pockets .

However, what we need to worry the most about is that this establishment does not have frontiers! They do not care about terrorism; they do not care about drug cartels; they do not care about famine, disease, poverty, THEY ARE THE NEW WORLD ORDER! 

The Tax Justice Network is searching for solutions and has developed an Anonymous Wealth Tax which has been presented to the developed nations of the world. This taxation would produce over 100 billions of dollars to be shared among the basic needs of those in need and poverty. The great problem that the world faces is the fact that all the financial fiscal paradises are still protected by the off-shore secrecy rules. These tax evaders are the pirates of the XXI Century, who continue to hide and launder cash!

I personally had an encounter with them almost twenty years ago, all clients of Mossack-Fonseca. The scheme was connected to millions of dollars transferred to Alberto Fujimori and Vladimiro Montesinos in Peru through the Spanish bank Banco Bilbao Vizcaya (BBV-SA). 
When this became a scandal some time ago, only a very scarce amount of the full information became public. There was an official cover-up of the federal and transnational agencies. I was aware of some information about the scheme and received extreme pressure not to give out privileged and classified information. 

It is disturbing to know that all the prosecutors related to the Secrets Accounts have died in mysterious manners or have disappeared. For example, David Martinez Madero was found dead at the Milan International Airport in Italy . Martinez Madero was the Anti Corruption Prosecutor for the Kingdom of Spain, who that same week discovered that the Spanish Princess, Pilar de Borbon, had millions in cash in Off-shore Banks in Panama through the office of Ramon-Fonseca. 

This dormant volcano has again erupted this year,  when someone hacked the Panama Papers and these are being made public! 
(Copyright 2016)

To Be Continued:
How Puerto Rico 's banks, agencies and enforcement entities were used in one of the biggest cover -up in our American history.

Monday, July 18, 2016

THE IRS IS READING AND DISSECTING THE PANAMA PAPERS TO CATCH TAX EVASION CRIMINALS, INCLUDING SOME IN PUERTO RICO

The IRS is examining information found in the hacked Panama Papers Accounts. This information is known as the PANAMA Papers. A Panama Account was hacked, and made public. It has to do with money deposited in a Panama account from individuals around the world, for the purpose of tax evasion. There is a rumor that there are some from Puerto Rico. MJ

Caribbean News Now
Compliance Matters: Spider webs, Panama Papers and the IRS
July 15, 2016
By Stanley Foodman
The Internal Revenue Service (IRS) has asked involved US taxpayers to come forward before the IRS reads and dissects the “Panama Papers”. The IRS will “plan how to use the huge trove of leaked documents to catch criminals -- and urged Americans to come clean now before illegal activity is discovered”. 
"People hiding assets offshore should recognize the continued changes and progress in the international tax arena," the IRS said. "More than ever, their best option remains to come forward voluntarily and participate in the IRS Offshore Voluntary Disclosure Program."

The penalties under the Offshore Disclosure Program are not as severe as if the IRS finds the out of compliance taxpayers itself. The IRS warning to US taxpayers comes after meeting with tax authorities from over 40 countries. All tax authorities are sorting through the evidence in a quest to deliver a combined response.

Every US taxpayer ought to consider that IRS already has a lot of taxpayer information. Many changes have already taken place, and taxpayer information has been exchanged across multiple jurisdictions. In addition to FATCA, the IRS has other tools to extract information: its whistleblower program, and the John Doe summons (used to trace activity in correspondent bank accounts). The IRS message to US taxpayers to come forward should be taken seriously.

Banks, as intermediaries, are caught in the regulatory complexity of the financial services industry. A main mission of a bank is to minimize risk and reduce expense. The days of on-boarding corporate bank accounts with complex ownership structures that mirror spider webs are ending. Although it seems that “sanctioned person(s)” can still get through the banking system, it will be more difficult after the dust of the Panama Papers has settled.

Up to the present, shell companies have been easy and inexpensive to form and operate. Add the multiple layers of ownership that can be devised, and the complex ownership structure is born. Banks were primarily looking at the 25% ownership threshold, but this may end, and settle at the 10% FATCA threshold. As a result, the entities that have “beneficiaries” with less than 10% ownership control will still be able to get through the banking system and the spider webs will be challenging to decipher.

Eventually, all beneficial owners will have to be disclosed to the banking authorities, as they are in the EU. The global response to the Panama Papers has been that no person should be able to hide behind these complex and hard to figure out structures.

CDD requirements for financial institutions will be strengthened and clarified. And, eventually, entities will be required to disclose their ultimate, or beneficial, owners to government authorities. The bankers will have no incentive to build banking or brokerage books.

Moreover, bankers for professional services provider (PSP) bank accounts will be asking more questions about PSP CDD programs, collecting more information and documenting files as to their compliance. And, a call from a banking regulator is something that nobody wants. Regulators have an ongoing mission to ensure that financial institutions have effective compliance programs in place.

So, banking institutions that perhaps don’t have the right CDD programs in place to identify complex spider webs ownership charts should raise their hands and come forward. Non-compliant US taxpayers need to do the same.

The government wants individuals and companies to come forward and take the first step, as opposed to having to identify individuals or companies itself. Don’t be a victim of your own making. Come forward before the authorities find you. Consult your tax specialist before doing so.
Stanley Foodman is CEO of Foodman CPAs and Advisors, and a recognized forensic accountant and litigation support practitioner, specializing in complex international and domestic tax matters. He may be contacted at stanley@foodmanpa.com

Tuesday, July 12, 2016

A VICTORY OF THE PEOPLE OF PUERTO RICO OVER THE MOST POWERFUL FINANCIAL FORCES IN THE WORLD

H.R. 5278: PROMESA 
INTRODUCED: May 18, 2016  
PASSED HOUSE: Jun 9, 2016
(Prognosis:11% chance of being enacted)
ENACTED & Signed by the President: Jun 30, 2016

___________________________________

THE MONEY BOX

July 11,2016
by Issac Rauch

How a Broke Little Island Beat the Hedge Funds

Puerto Rico got the debt relief legislation it wanted while some of the most powerful forces in finance got stiffed. What happened?
In 2015, the hearts of hedge funders fluttered when former Treasury Secretary Larry Summers wrote, in a Washington Post op-ed on Puerto Rico’s debt crisis, “How things play out from here will be an important test of whether Washington is, as some allege, controlled by financial interests.” For anyone with deep pockets and an interest in maintaining leverage over the Puerto Rican government, killing congressional debt relief legislation must have looked like a slam dunk. To give Puerto Rico the option to legally restructure its debts, Congress would need a groundswell of bipartisan action—all to help poor, nonvoting quasi-citizens in an ugly election year. How would you have bet?

Yet, on June 30, Obama signed into law the Puerto Rico Oversight, Management and Economic Stability Act (or PROMESA, which means “promise” in Spanish), handing a rare loss to a group of powerful hedge funds—along with banks and public mutual fund companies Franklin Templeton and Oppenheimer & Co.—that saw in Puerto Rico’s slow-burn fiscal crisis an opportunity for profit. In doing so, Congress preemptively decided what was shaping up to be a multiyear war between Puerto Rico and its creditors, giving leverage to Puerto Rico’s previously overmatched government and pulling the rug out from under the funds doing the financial equivalent of turning the commonwealth upside down, shaking hard, and collecting the coins that fell out of its pockets. How did such a thing happen? How did some of the most powerful forces in American finance lose to a broke little island?

A quick refresher on government borrowing: Public authorities, towns, cities, states, our federal government, and sovereign states the world over frequently issue debt (i.e., borrow money from investors) for needs ranging from, say, building an aqueduct to bridging budget gaps between now and tax day. Once public entities decide when and how much they want to borrow, a bank steps in to underwrite the bonds, determining how to sell them, and how to fill in the blanks in the book-length prospectuses that accompany every bond issuance. The bank finds customers for the bond sale—anyone from labor union pension funds looking for a safe place to invest members’ dues, to hedge funds using municipal bonds to balance complex, algorithmically risk-weighted portfolios—and the bonds continue to trade on the secondary market just like stock, with the issuing government’s fiscal health driving the undulations in a bond’s price.

Apart from some legal quirks (no taxes!), Puerto Rico’s bonds were no different. What does make Puerto Rico’s bonds different from the bonds of every state-level issuer since 1933—when Arkansas defaulted—is that Puerto Rico mostly isn’t paying them back. The commonwealth’s government told the world mid-2015 that it couldn’t pay its debt and proved it over the intervening year, defaulting on select issues of bonds on multiple occasions before July 1, the day after PROMESA passed, when it managed to make principal and interest payments on just over half the $2 billion that had come due that day. The latest budget proposed for Puerto Rico’s next fiscal year includes no allotment for debt service payments. The Treasury estimates that hedge funds own about $23 billion, or more than one-third, of Puerto Rico’s external debt. That sound you hear is teeth grinding in midtown Manhattan and Greenwich, Connecticut.

The congressional debt relief bill puts a stay on litigation stemming from the defaults on Puerto Rico’s bonds: Those hedge funds and mutual funds, who before PROMESA and after informal negotiations failed, raced to court to argue Puerto Rico was legally required to pay its debts. It also creates a federally appointed fiscal oversight board to oversee Puerto Rico’s budgeting for the next few years and mediate a period of negotiations with creditors, in which Puerto Rico will ask the parties that lent it money—or the parties that acquired the debt securities that represent those loans—to accept significant haircuts and extended repayment schedules.

COMMENTS: 
Isaac Rauch was probably misled to say some people of Puerto Rico did not want the board. That is what the powerful financial forces wanted the media to believe to help their cause. However, all polls revealed that over 90% of the people want the Fiscal Board. Grassroots mobilized with faxes, phone calls, social media, letters and took their message to Washington in support of PROMESA. 

In his statement during the US Senate vote, Sen  Hatch said: 
"Well, Mr. President, i have made clear all along that my main objective has been to serve the interests of the people of Puerto Rico, not the politicians on the island who are here in Washington, D.C."

This is the first time that I know of, in the history of Puerto Rico, that the people were empowered and in spite of having to fight against the most powerful force in the Finance worldand all the political parties in Puerto Rico, Unions, etc...the people won this battle after using every free or almost free method to inform members of Congress of our position. The US Citizens of Puerto Rico are ecstatic over the positive results. 
Miriam J. Ramirez  MD (MJR)