CAPITALISM'S ACHILLES HEEL Dirty Money and How to

200 CAPITALISM’S ACHILLES HEEL
fraud the Canadian government of tax revenue, not the validity of a
foreign sovereign’s revenue laws.” 57
United States v Pasquantino. (2003) Liquor was smuggled from Maryland
through New York into Canada, avoiding Canadian customs. The
Fourth Circuit, overruling an earlier panel, also looked past the old revenue
rule in order to vindicate the United States’ “substantial interest in
preventing our nation’s interstate wire communication systems from being
used in furtherance of criminal fraudulent enterprises.” 58 This decision,
upon appeal to the U.S. Supreme Court, was upheld in 2005.
A careful review of these three circuit court rulings concluded as follows:
“[C]ourts must conclude that Congress intended fraudulent schemes seeking
to evade foreign excise taxes to fall within the broadly established scope
of §1341 and §1343 [mail fraud and wire fraud statutes].” “The misuse of
U.S. mails and wires in furtherance of an illegal operation transforms
schemes to defraud foreign governments of import duties into crimes
against the United States.” 59
“Crimes against the United States.” Much the same thing can be said
about many other countries. Within the framework of mail fraud, wire
fraud, filing false customs declarations, and making false statements, enough
law exists to curtail substantially the very widespread practice of mispricing
in transactions between unrelated parties and abusive transfer pricing in
transactions between related parties. A senior Treasury Department lawyer
talking with me about available statutes said, “With mail fraud and wire
fraud we can do anything we want to do.” 60 When I asked him why the
United States chooses not to use these instruments to combat false pricing,
he hemmed and hawed and backed away from the subject. Because the business
of falsified pricing underlies so much of global capitalism and has
brought more money into western coffers than it has taken out, western nations
are reticent to attack the goose that lays the golden egg. The World
Trade Organization and the OECD get into the game with regulations and
guidelines, to little avail because the concept of reining in false pricing essentially
lacks support from its bigger members. 61
The whole litany of mechanisms and structures—false pricing, tax
havens, secrecy jurisdictions, dummy corporations, anonymous foundations,
flee clauses, money laundering techniques, legalized criminal inflows,