Offshore appear to be a favorite place for concealing money, but it turns out that not only users of such companies may be unclean. Among experts on working with offshore companies, scammers are also found. These people register companies, optimize taxes, and manage customer funds.
In this area, often widespread petty fraud, based on expensive seminars, the sale of inflated prices of “valuable” and “unique” literature, as well as the collection of astronomical fees for the preparation of some schemes of tax planning, which are generally generally unsustainable.
However, the most dangerous option is when customers entrust specialists with their funds in the hope that they can better dispose of them. But possible litigation in such cases is very difficult. After all, the victim is reluctant to give all the information on fear of exposing his illegal schemes of tax evasion, and offshore authorities rarely meet their clients in matters of their legal protection.
In 1997, at a number of international seminars on offshore subjects, a young man, Mark Harris, was dressed and perfectly dressed. He invited everyone to use the services of his firm “Harris Organization” for offshore tax planning, which was located in Panama.
The organization offered a full range of services in this field – registration, asset management, schema development, etc. “The chip” of the company was “The Matrix of Harris” – a set of schemes that allowed corporations to withdraw funds to their own offshore, demonstrating on paper losses.
Harris, born in the United States, had Panamanian citizenship, he was constantly accompanied at the meetings by externally impeccable American specialists in taxes and finances. The swindler was a brilliant orator and specialist, he invented new schemes right on the run. His clients were impressed by the attitude towards them, they were brought to the office on the “Jaguar”, they were fed and given free food. The cost of the same services was very low, in comparison with competitors.
All this, together with an effective advertising company, provided the company with success, soon “Harris Organization” became one of the world leaders in offshore services, its staff was 150 people, many cooperation agreements were concluded, and offices were opened in the main offshore areas.
Harris worked continuously with American lawyers, accountants, who provided him with a continuous flow of clients. According to the organization itself under its management was the amount of about 1 billion dollars. Harris’ rivals only got their hands up, because they could not offer comparable prices.
Only the most suspicious believed that there was a consumption of money from clients received in management. And many American specialists were shocked by Harris’ methods, since they completely did not dock with modern anti-infringement legislation of the USA.
Harris’s take-off was stopped by journalist David Marchant, who conducted his own investigation, commissioned by one meticulous client, the results of which were published in March 1998. According to the article, “Harris Organization” was a giant offshore scam having a single goal – to deceive customers into the millions of dollars received in their own administration.
The funds under the management of the company were not at all a billion, but 40 million, which is not so much for a company of 150 people. Trusted by the same funds, the company disposed of extremely badly, most of it was spent on the needs of the company itself, the rest were invested in questionable or fictitious projects or enterprises.
So, half a million was invested in the production of bicycles in Chile, which never took place. No accounting was really conducted, reports were made at random, but for all this, customers paid regularly.As a result, the conclusion was that the company’s liabilities exceeded its assets by $ 25 million, the firm, in fact, was bankrupt.
And among the former clients of Harris were criminals who ended up in prison on charges of drug trafficking and money laundering. The very same Harris lost his auditor license back in 1990 for negligence and incompetence. It also turned out that the swindler had previously managed several offshore banks closed by the police for fraudulent activities.
Naturally, this article caused a scandal. The journalist was sued, accusing him of libel, and the amount of damage, according to the Harris Organization, was 30 million. However, such a move aimed only to delay the investigation, the scam itself in the US chose not to appear, and his firm lost with a crash the July 1999 process. The journalist presented convincing data, against which lawyers could not oppose anything. Naturally, shortly after the trial the company was blown away, like a broken ball.
Her reputation was hopelessly corrupted, and the staff was reduced to a few people. Customers began to demand their money back, problems with payments began. However, the money simply was not there, even before the employees of his company, the debt was never repaid. As a result – 70 lawsuits with a minimum chance of success. Harris himself moved to Nicaragua, where he continued his activities to provide this kind of services.
Cases of abuse of client confidence are quite frequent in offshore business. An attractive firm can be an ordinary pyramid, or it can simply be inefficiently managed, leading to inevitable collapse. An example of such fraud on Russian soil is the Swiss firm Sovereign Finance Group, which operated in Moscow since 1996. She offered rich clients the services on international markets and on the management of their assets. The minimum deposit amount was 100 thousand dollars.
The company itself, its turnover in 2001 estimated at 120 billion dollars! Most of the operations were carried out offshore at Saint Vincent, and Russia was the main source of fund raising, which suggests that the roots of the company lie here.
When customers faced problems with refunds in 2002, they turned to the Swiss authorities, who on the basis of a search immediately closed the firm, accusing it of conducting banking activities without a license and money laundering. Debts to customers amount to tens of millions of dollars, their return is highly unlikely.