April 2009 Archives

The Sunday Times published this years list of the 100 wealthiest people working or living in Britain and i-Gaming executives featured heavily in the list with four PartyGaming executives among the top ten richest online business people, including PartyGaming founders Russ De Leon and Ruth Parasol ranked second place on the internet list with £700m. Group operations director Anurag Dikshit and marketing director Vikrant Bhargava were in third and ninth place respectively, with fortunes of £559m and £230m.

Bet365 founders Peter Coates and daughter Denise are sixth on the list, with an estimated £400m each, while online betting exchange Betfair placed three executives in the top 20. Betfair founder Ed Wray is the 11th wealthiest with £190m; Andrew Black is the 12th with £185m; and equity investment manager Richard Koch is the 17th with a company stake worth £129m.

The man at the top of the list however, is Peter Cruddas, founder and owner of internet securities dealer CMC, with a fortune estimated at £1bn. The Sunday Times reported that the Rich List was hit hard by the recession this year. The world economic slowdown wiped £155bn from last year's list, the biggest fall since the group was first compiled 21 years ago.

Steel tycoon Lakshmi Mittal has seen £16.9bn evaporate from his fortune due to the collapse of the world steel market this year, but remains the richest person in Britain with a fortune of £10.8bn. The Duke of Westminster is the richest Briton, and continues to occupy third position overall due to his real estate fortune of £6.5bn.

Allen Stanford stands accused of running an $8bn ponzi scheme involving fraudulent certificates of deposit, but the financier came out with all guns blazing in a recent interview at the office of his criminal defense lawyer.

Although the SEC has described his operation as a "massive, ongoing fraud" Stanford feels fundamentally misunderstood.

"The SEC far overreached and basically ruined a multibillion-dollar company..Everybody got paid and everybody got made whole until the SEC came in and shut everything down," he said in the interview.

"The SEC came in and gestapo-ed my business, and I watched $5 billion of my net worth disappear.''

"If the SEC had not come in and taken the actions they did, and had the ripple effect they did around the world, unequivocally yes, we would've survived,'' Stanford said. "Now, I don't know. I don't know where the business stands because I've been locked out of my businesses, too.''

Stanford claims that his bank had liquidity problems like other financial institutions during the crisis..

"But Stanford International Bank didn't have a fed-funds window to go to for a bailout,'' he said. "We were extra liquid, with more than $2 billion on hand, but it turned out not to be enough.''

Stanford has not been charged with criminal wrongdoing, however Stanford's Antiguan receiver Nigel Hamilton-Smith expressed "little doubt" that the Antiguan branch was run as a ponzi scheme.

"I used to be one of the richest men in the world, who has done nothing but work his butt off, and I've been turned into a pariah,'' Stanford said. "But I don't feel sorry for myself. I'm angry.''

How offshore "tax havens" don't include US tax dependencies like the US Virgin Islands. The past few months have seen attacks against "offshore tax havens" which undermine collection of US taxes and other efforts from other high-tax countries. The OECD, a European think-tank which pays no tax, has come up with a list of countries which don't subscribe to their plan to regulate world finances. But while the US is happy to use the OECD as its highly paid tax-free international lobbyist, it is secretly promoting tax havens in its own back yard, actively soliciting the very same opaque "offshore funds" and money groups which started the crisis.

Some of the tax benefits for offshore funds looking to start up in the US Virgin Islands include: - 90% exemption on US income tax (results in a top federal tax rate of 3.5%!)

•           100% exemption on 4% gross receipts tax

•           100% exemption on 0.75% real property tax

•           100% exemption on 4.2% excise tax

•           100% exemption on 7% US Customs import duty

•           1% VI Customs Duties instead of 6%

The craziest thing about this whole set up is that, apparently..the US Virgin Islands is not considered a "tax haven" BECAUSE it is a US territory under US flag and protection..what does that mean? High-tax countries don't care about "international financial transparency" or any of that poppycock, they don't care about being fair, and the OECD is certainly not about "tax justice", it's about "tax piracy" and each man getting what he can.

 

Credit Suisse is taking further measures to protect itself, by ordering thousands of its American offshore banking clients to leave or face declaring their account details to the IRS.

The Swiss newspaper Sonntadszeitung has reported that US customers have the option to move their funds to a Credit Suisse subsidiary, CS Private Advisers, which would reveal their accounts to US authorities, or receive a cheque for the balance of their funds.

UBS, Credit Suisse's larger rival, paid US authorities $780m to settle a case brought against it by the US justice Department, in which it was accused of helping wealthy US clients evade taxes. UBS also agreed to name 250 of its clients. Credit Suisse may be offering this choice to its US customers to avoid a high-profile UBS-type investigation. Credit Suisse has between 2,500 and 5,000 US clients with 3bn Swiss Francs in undeclared funds, according to Swiss media sources. 

In a statement, Credit Suisse downplayed any notion of a legal crisis: "Credit Suisse adheres to the highest compliance standards, applicable laws, regulations, and policies..We offer both domestic and international wealth management services to US clients in compliance with all applicable laws, regulations, and policies."

, Jason Sharman, armed with little more than google and a $10,000 dollar budget, set out to form anonymous companies and offshore bank accounts worldwide - with interesting results (see economist article). Where were the places with the most lenient due diligence requirements?

In his 45 attempts to open anonymous shell companies and secret bank accounts Jason was successful in 17 cases, of which 13 were OECD countries. Britain earned top honours. In 45 minutes Jason was able to form an anonymous bearer -share company without identification, complete with nominee directors and a secretary for just  £515.95 ($753).

But when he tried to open accounts in Switzerland and Bermuda, he was asked for documents like a notarized copy of his birth certificate!!

It just goes to show that high-tax governments aren't interested in where the money's coming from - as long as they get a slice of the pie..

Lets see what theatrics tomorrow brings.