Is this STILL legal?

[Dover]

What with the purported crackdown on tax havens I wonder if it is still legal for banks to arrange for the creation of these shell accounts for their top clients? If so, what is the point of this crackdown if the culprits are still at it? Is it all for show?
And while we're at it, how is it that this practice was ever made legal to begin with?

Here's the dated article excerpted from Mother Jones. Wondering...hoping that this illegal activity has been plugged up with new laws/legislation. Anyone know?

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...The world's largest financial institutions are also growing richer by offering private banking services to their top clients. Big-time American players include Merrill Lynch, Chase Manhattan, J.P. Morgan, Morgan Stanley, and Goldman Sachs. The leading U.S. private banker is Citibank, which administers trusts and shell corporations for some 40,000 clients through its operations in New York, London, the Bahamas, the Cayman Islands, the Isle of Jersey, and Switzerland.

To open an account, private banking clients must generally deposit at least $1 million. According to a report by the Senate Permanent Subcommittee on Investigations, private bankers then assign the client a "relationship manager" who creates offshore trusts, handles all financial transactions -- and helps ensure secrecy. "Private banks routinely create shell companies and trusts to shield the identity of the beneficial owner of a bank account," the report states. "Private banks also open accounts under code names and will, when asked, refer to clients by code names or encode account transactions."

One former private banker who had more than 30 clients, each with as many as 15 shell companies, told the subcommittee that his own bank prohibited him from keeping any records linking front operations to their owners. In another case, Federal Reserve examiners asked Bankers Trust to create a database identifying the owners of shell companies. The bank complied -- by setting up the database on the Isle of Jersey in the English Channel, which requires U.S. investigators to request names on a case-by-case basis from Jersey courts. The effort to create and shelter multiple accounts "complicates regulatory oversight and law enforcement," the Senate subcommittee concluded, "making it nearly impossible for an outside reviewer to be sure that all private bank accounts belonging to an individual have been identified."

The secrecy makes it easy for clients of private banks to hide their wealth, whatever its source. Citibank's clients have included the family of Sani Abacha, the former Nigerian general who plundered billions of dollars from his nation's treasury, and dictator Omar Bongo of Gabon, for whom Citibank established a Bahamian shell corporation to stash his looted treasure. Citibank also helped Raul Salinas, brother of former Mexican president Carlos Salinas, by transferring tens of millions of dollars out of Mexico and depositing the money in European banks under the names of untraceable companies registered in the Cayman Islands. Citibank never used Salinas' name in bank communications, referring to him instead as "Confidential Client Number 2," or "CC-2."

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x46457

[Dover]

1. Wow...it looks as though most everyone here is either uninformed about this topic

or just disinterested.

Well I am in the "uniformed" category, so I've been doing a little homework and found what I think is some very important information about all this for those in the "interested" category.

Did you realize that Obama Admin. slipped some very significant legislation into a bill last year titled the HIRE Act? It puts in place some very broad and severe currency controls that has the wealthy in a panic. And Obama is in good company as many governments worldwide are slipping so far into the red they may never see black again before imploding. So they are HUNGRY for revenue. This legislation goes into effect next year...that is IF it remains intact. Want to see what panicked wealthy persons are saying?

Check out this author from a website called Q-Wealth Report:


Currency Controls: Now Law in USA through HIRE Act

...I’ve read some of the HIRE Act and if you download the pdf file here and skip to page 27, you will see my reason for concern:

Title V – Offset Provisions

Subtitle A: Foreign Account Tax Compliance …

Taxes to Enforce Reporting on Certain Foreign Accounts

... The Act adds a whole new chapter to the 1986 Internal Revenue Code, which introduces a whole new tax… a tax on foreign bank accounts. In a nutshell, here’s what it says:

Any funds transferred from the US to any overseas account are subject to a new tax equal to 30 percent of the total amount of the payment – unless the payment is sent to a foreign bank that has agreed to report all American-owned accounts automatically and electronically to the US government.

What kind of payments are included? Almost anything. The act specifically mentions “interest, dividends, rent, salaries, wages, premiums, annuities, compensations, remunerations … and any gross proceeds from the sale or other disposition of any property of a type which can produce interest or dividends from sources within the United States… ”

This is incredible stuff. The section after the section about foreign bank accounts goes on to talk about foreign financial assets, including for example stocks, not just offshore bank accounts. Any holdings of foreign stocks over $50,000 will have to be reported by US taxpayers. And this provision kicks in earlier – starting with the next tax year.

It then continues to talk about foreign trusts, dividends… before drawing to a sudden close, and disappearing to where it came from!

It’s early days yet to give you a full analysis of this new law. We will have a detailed article on this topic in the next edition of Q Wealth Report, which is due out next week (if you join now you will receive it automatically… and see what else you are missing if you’re not already a member). But it’s clear that Americans have serious decisions to make – and fast!...

cont'd
http://www.qwealthreport.com/blog/currency-controls-now-law-in-usa-through-hire-act/

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HIRE Act - A Blessing In Disguise?
http://www.qwealthreport.com/blog/hire-act-a-blessing-in-disguise/


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MoneyLaundering.Com
http://www.moneylaundering.com/Pages/Home.aspx

[Angry Dragon]

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