CAPITALISM'S ACHILLES HEEL Dirty Money and How to

Playing the Game 35
virtually every task, roundtrip, from the fruit plantations to the high seas to
the foreign importing organizations to the overseas exporting offices and returning
to the fruit plantations, transferring many millions of dollars from
place to place at will.
After figuring out how to make money by mispricing and transfer pricing
and by reinvoicing through a third company, you may want to disguise
where all this money originates from and goes to. For this it’s useful to have
some additional dummy businesses, such as a nonfunctioning corporation
or two and possibly an offshore trust or foundation.
Offshore dummy companies are commonly referred to as international
business corporations (IBCs) or personal investment corporations (PICs).
The shareholders, directors, and officers are usually individual nominees
provided by the company formation agent or, alternatively, other dummy
companies controlled by the agent. A side letter may be the only evidence of
true ownership, and that letter is normally not included in the official incorporation
papers. As a rule, IBCs and PICs have no employees and no facilities
and are expected to avoid doing business in the countries where they are
established. Most are set up for the sole purpose of having bank accounts
hiding behind layers of secrecy.
Typically a lawyer in any one of more than 60 small countries or enclaves
prepares the incorporation papers or provides an off-the-shelf company
that has been preregistered. Already, lawyer-client privilege affords
you a great deal of protection. Then, too, the laws of such jurisdictions
traditionally make it an offense to reveal any information about the secret
entity, its owners, or its transactions. Authorized capital can be negligible
or not paid up. Most commonly, income accruing to the IBC or PIC is either
tax exempt or subject to very low rates. Audit and reporting requirements
are usually nil. But with this well-guarded dummy corporation and
its bank account, you can shift dirty money in where its identity is essentially
lost, and then shift it back out again with a company name disassociated
from you. For further protection, several dummy IBCs or PICs can
be set up or purchased in different jurisdictions, each functioning under a
different set of laws cloaking your identity, so that anyone, including disgruntled
trading or investment partners, assorted thugs, ex- or soon-to-be
ex-spouses, tax collectors, zealous journalists and prosecutors, will be frustrated
at every step in trying to trace a source of funds back to you.