Developed Country Investment Problems and the Offshore Business

The a previous article we outlined the history of Offshore finance that all attorneys in Belize need to understand to better serve their clients in these financially hard times.  This article is Part Two and covers some of the recently financial scams that have been perpetrated in developed nations.

A US financier charged with swindling well-off, experienced and competently advised developed world investors around over fifty billion dollars US. His businesses were to be foundsited not “offshore”, but right in the United States and England. He was supposed to be regulated by the Securities and Exchange Commission and even the well-known and various departments did not raise an eyebrow. These include the IRS, the Federal Bureau of Investigation and the Central Intelligence Agency that were all supposed at the time to be tracing “irregular” banking activity and money laundering activity based on the previously crammed down Patriot Act. Some would say about $65 B of illegitimately obtained funds, were thus “laundered” in front of their face.
 
Sir Allen Stanford, a US citizen, has been the poster child for “offshore” scams. His primary operations were situated in Texas and only is his bank was located offshore. Further, being a US citizen, the US authorities had extra territorial jurisdiction over him wherever he was located. He still operated with impunity right under, from and with, the US, US citizens and worldwide investors. His friends were even in Belize soliciting customers at one point in time, but by chance, the small number of approached Belizeans were a bit more financially savvy due to their offshore exposure.
 
Also Houston-based, was the large Enron that was the model of how to falsify accounting records. Some other examples of imaginative accounting include now reputable companies like Xerox, AOL, Bristol Myers Squibb, Duke Energy (once an investor in BECOL/BEL), Freddie Mac, Halliburton (of Iraq/Afghan war fame), Kmart, Merck, Merril Lynch, Qwest, Tyco International, Worldcom, Chiquita and AIG. These were all perpetrated to a large extent by one of the following accounting firms: KPMG, Arthur Andersen.  Though some no longer exist in their former states due to the scams they participated or rather, structurally advised.
 
Then there was the European trader that caused loss to the Russian Mafia laundering billions through the (then) respected Bank of New York. Bear Sterns and Lehman Bros. BCCI and Northern Rock WAMU and Bear Sterns are just a few of the more best known fiascoes. Their products included derivatives and swaps and the list goes on.

This history would help all Belize attorneys or Belize lawyers better explain why the Offshore industry in companies like Belize should not suffer undue regulation since financial scams can be and have been implemented in all countries of the world.