Fans who watch James Bond movies, or a film like Tom Cruise’s The Firm, will remember instances where the bad guy is using offshore banking to help protect their money from prying eyes. In The Firm, Bandini, Lambert, and Locke help to launder money for the mob through banks in the Grand Caymans, but there are numerous locations around the globe that assist folks in keeping their money out of view of friends and governments alike.
What might surprise many though is the fact that it is not just the mob or the filthy rich that take advantage of these tax shelters. That is just one of the interesting pieces of data unearthed by The International Consortium of Investigative Journalists (ICIJ), which is made up of 90 journalists from 47 countries. These enterprising sleuths used a variety of means, including sophisticated data crunching to go through thirty years worth of documents, which is estimated to be around 2.5 million.
The CNN Money report points out some of the obvious folks that many would figure housed their money in some of these offshore tax shelters. International arms dealers make the list, as well as family members and friends of some of the world’s long time dictators and despots. Those that remember names like Bernie Madoff can recall the PONZI schemes that swindled billions away from hard working folks a few years back. Well, these crack researchers have found plenty of money from these PONZI schemes taking up residence in offshore tax shelters.
It is not just the rich and famous that are using these shelters. Through investigation, researchers determined that American doctors and dentists were users of this type of tax evasion. This one might be truly hard to believe, but middle class Greek villagers had money stored there, as well. Given the monetary crisis that nation has endured over past years, that kind of news is going to make quite a few people unhappy. One can see why these villagers might want to get their money out of the country, but for a nation struggling for every cent, those non taxable funds are liable to make even close neighbors get upset at one another.
When it was all said and done, these investigators turned up over 1 trillion dollars of funds that were being sheltered outside their countries of origin. Unlike the movies though, it is not just the Grand Caymans where the funds are turning up. Places such as the British Virgin Islands, the Cook Islands, Cyprus and Switzerland have become popular vacation spots for money that these sneaky folks do not want to declare. Though many nations are guilty of the practice, the biggest users of this undercover money hiding are from China, Hong Kong and Taiwan.
Perhaps it is now easier to understand why leaders like President Obama are looking for the upper class to pay more in taxes. Unfortunately, it also appears that these folks know how to evade those higher taxes by running their money offshore.