The Tax Times: How Will The IRS Know? - The Paradise Papers Exposes US Clients of Asiaciti Trust!

On November 15, 2017 we posted More Then 31,000 US Taxpayers Exposed in Paradise Papers!

where we discussed that Appleby, an Offshore Law Firm/Corporate Agent's Recent Data Breach is yet Another Example of How the IRS Can Discover your Unreported Foreign Account and how the Super-rich clients of offshore law firm Appleby are bracing themselves for the exposure of their financial secrets, after the firm admitted data had been stolen in a cyber attack last year.

Now the International Consortium of Investigative Journalists (ICIJ) has issued the Paradise Papers which is a global investigation into the Asiaciti files. These Paradise Papers include files from a smaller, family-owned trust company, Asiaciti, and from company registries in 19 secrecy jurisdictions.

The leak of 556,000 files from Asiaciti passed largely unnoticed within the Paradise Papers, a trove of 13.4 million documents that reveal offshore secrets of politicians, celebrities, billionaires and companies whose brands are household names. Asiaciti’s emails, trust application forms, faxes and bank statements are vastly outnumbered by leaked documents from Appleby, a law firm and corporate services provider with offices around the globe.

Yet the files from Asiaciti – a trust specialist headquartered in Singapore, with branches in tax havens such as the Cook Islands and Samoa in the Pacific and Nevis in the Caribbean, shine a light on the practices of offshore clients ranging from the ultra-wealthy to the unremarkable, with a host of questionable clients in between.

Asiaciti did not respond to written questions by ICIJ, but issued a statement that it complies with applicable laws and regulations at all times and it estimates that the documents the ICIJ claim to have seen from Asiaciti Trust account for approximately 4% of the information comprising the “Paradise Papers ”.

Founded in 1978 by Graeme Briggs, an Australian accountant, Asiaciti expanded throughout the 1980s and 1990s. It has described itself as “one of the leading offshore trust groups in the Asia-Pacific region.”

Asiaciti’s Files Include A Significant US Client Base:

a California Dentist, an Alabama Grocer, a U.S. Handgun & Rifle Manufacturer, and a Food-Truck Entrepreneur from LA.

Also found are Chinese millionaires and clients from Switzerland, Romania, Nigeria, Thailand and South Africa, in addition to an Israeli “branding” expert, an Egyptian gynecologist and a 26-year-old British eye serum and moisturizer salesman.

Asiaciti’s services range from tax, accounting and “wealth protection” services for individuals to secretarial services for global corporations. A major moneymaker is trusts.

Offshore trusts are often inscrutable legal instruments with blurred official ownership. The details are rarely a matter of public record. Trusts allow the publicity-shy to act out of sight of creditors, ex-spouses or courts.

Asiaciti has specialized in establishing trusts in Samoa and the Cook Islands, nations of 200,000 and 11,000 people, respectively. Within 24 hours and for less than $300, a client could buy “ ‘state of the art’ offshore products” to build and preserve wealth, according to an archived version of Asiaciti’s website.

“The sad fact is that Cook Islands trusts are routinely used by people to cheat legitimate creditors,” said Jay Adkisson, an attorney and expert witness in a fraud case that involved Asiaciti’s trust division.

It’s difficult and expensive for creditors, attorneys or the tax office to access funds held by a client’s trust, Adkisson said.

Among Asiaciti’s other U.S. Trust Clients were Sean Novis and Gary Denkberg, Marketing Executives who Targeted Pensioners in a Mail-Fraud Scheme, according to a civil complaint filed by the U.S. Justice Department.

Novis, Denkberg and others told elderly victims that they had won more than $1 million and asked them to pay a fee, “generally in the range of $19.99 to $24.99,” to receive the prize, the 2016 civil complaint alleges. Victims often received nothing in return, according to the complaint. Over four years, the marketers and others allegedly pocketed more than $30 million.

Novis and Denkberg had one trust each with Asiaciti that at one stage held more than $1 million each, according to Asiaciti’s files. In February 2007, Novis asked the firm to help him find a bank that did not have “a presence in the USA.” Both men’s trusts were active in 2016 when Asiaciti learned of the civil case.

In 2016, a court imposed an injunction that prohibited Novis and Denkberg from mailing prize offers and sweepstakes in the United States. The Justice Department took no further action, a spokesman told ICIJ.

Denkberg told ICIJ that his trust was not involved in the civil case and that, to his knowledge, it had not held more than $1 million. The trust complied with the law and was declared to tax authorities, he said. Novis did not reply to requests for comment.

Gold and juice trader Sherman Unkefer III in the Phoenix New used his Cook Islands trust, called the Mango Trust and set up by Asiaciti, to “conceal his accumulated wealth,” according to a county prosecutor in Arizona who brought a civil racketeering claim in 2014.

During and after his eight years in prison on a previous fraud conviction, Unkefer concealed assets to avoid repaying $18 million to more than 1,300 fraud victims, the prosecutor alleged.

Asiaciti was listed as a co-defendant in the case and was served with the complaint in the Cook Islands in June 2014, emails show.

The racketeering claim against Unkefer has been dropped, although alleged victims continue to seek compensation, a spokeswoman for the county prosecutor told ICIJ. Reached by phone, Unkefer’s partner said the couple had no comment.

The money in the Mango Trust was returned to the United States in 2014, said Michael FitzGibbons, the court-appointed officer who is seeking compensation for Unkefer’s victims.

The Paradise Papers Files Include Far More Information

About U.S. Taxpayers, At least 31,000 of Them,

Than Previous ICIJ Investigations!

ICIJ Journalists tracked down court records, obtained financial disclosures of politicians in Africa, Europe, and Latin and North America, filed freedom of information requests and conducted hundreds of interviews with tax experts, policymakers and industry insiders.

Marini & Associates, PA has assisted several hundred clients with coming into U.S. tax compliance and avoiding the draconian penalties that the IRS may impose on U.S. persons with undisclosed foreign accounts.

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