Thursday, July 21, 2016

The Old Shell Game: Scammy Little New Zealand Companies Try To Escape Tax EVERYWHERE

A couple years ago naked capitalism had a post on the New Zealand shell company racket we headlined as "Money Laundering With Inga Slavska and the Sinaloa Cartel". Today they have more.

From naked capitalism:

Dodgy New Zealand Companies: Mapping Their Global Footprint Since 2009
New Zealand Foreign Trusts, to be radically reformed after the recently-announced wholesale adoption of the Shewan report’s recommendations, are just the tip of the iceberg in terms of the ethically challenged and outright criminal use of a range of New Zealand corporate entities overseas.

Aside from trusts, New Zealand registered companies, financial service providers and building societies all feature too. Countries as diverse as Brazil, China, Malta, Latvia, Denmark, and the United States have felt their impact. Ponzi schemes, drugs, arms, tax scams and money laundering all feature alongside the simply bizarre. Usually the perpetrators are not New Zealanders. But New Zealanders have proven themselves willing to act as fronts for some very dodgy people offshore.
Concern about the behaviour of NZ registered, but overseas operating companies ramped up after the activities of shell company SP Trading came to light in 2009.
The aircraft was forced down while travelling over Thai airspace. When investigated in Bangkok it was found to contain 35 tonnes of North Korean weaponry including rocket-propelled grenades, missile and rocket launchers, missile tubes, surface to air missile launchers, spare parts and other heavy weapons to an estimated value of US$18 million. In the extensive publicity of the incident that followed there was considerable focus on the fact that the lessee of the plane was a New Zealand registered shell company [SP Trading].
This extract is taken from a High Court judgment from Justice Raynor Asher. The judgment blocked an attempt by Lu Zhang, the sole director of SP Trading whose day job was flipping burgers at Burger King, to be discharged without conviction having pleaded guilty to making 74 false statements under the Companies Act. (She was convicted and discharged without further penalty).
The weapons on the plane were bound for Iran in contravention of United Nations sanctions.
Since then, curious dubious, or outright criminal overseas activities of dodgy New Zealand companies, financial service providers, building societies and foreign trusts have remained in the news somewhere or other, almost unabated.

The details
Through the map below we have highlighted the activities of many of these entities, and the parts of the world where their activities have been felt, and in some cases where the perpetrators were located. It goes without saying that theses activities have not bolstered NZ’s international reputation.
Hovering your mouse over the dots on the map will bring up headlines and links to stories. We’ve mined our memories for a wide ranging smorgasbord. That said, there are undoubtedly others that could be here too, and we’re happy to take suggestions.
Punching above our weight
NZ is far from alone in having problems in the shadowy world of offshore finance. But the country, partly due to having a cheap and simple companies registration system, and being an easy place to do business, coupled with an international reputation for being among the least corrupt nations around, has proven ripe for exploitation.

And Swiss cheese style regulatory holes don’t help. For example, NZ foreign trusts. In a great example of the law of unintended consequences, when set up just right, NZ foreign trusts can escape tax everywhere....

Possibly also of interest:
"SEC Suspends Trading in 128 Dormant Shell Companies"
London's Russian IPO's
Junior Gold Miners Consider Cashing Out, Pursuing Medicinal Marijuana Opportunities
SEC Approves Eight Russian Shell Companies (AMOK.OB)
Better Get The Leg Irons Boys.
These Ain't Regular Criminals,
These is Stockbrokers.
-One of Climateer's favorite Barron's headlines.
Oh happy day.
Long time readers know I have a morbid fascination* with the underbelly of the markets; it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away.

As they say on the nature shows:
"Sadly now, there can be but one outcome"... 
The Law Firm That Supplies Shell Companies To Oligarchs, Money Launderers, and Dictators
A Look at the Old Shell Game: Reverse Mergers From China and Russia (CGA; SGAS; QING; AGVO; AMOK)
Tax Havens--"Kenya: want a shell company? No question"