Recently in Caribbean Category

The two island groups are in the North Atlantic Ocean, southeast of the Bahamas, north of Hispaniola, and about 1,000 kilometers (620 mi) from Miami in the United States. The territory is geographically contiguous to the Bahamas, both comprising the Lucayan Archipelago, but is politically a separate entity. The Caicos Islands are separated by the Caicos Passage from the closest Bahamian islands, Mayaguana and Great Inagua.

The eight main islands and more than 20 smaller islands have a total land area of 616.3 square kilometers (238.0 sq mi), primarily of low, flat limestone with extensive marshes and mangrove swamps and 332 square kilometers (128 sq mi) of beach front. The weather is usually sunny and relatively dry, but suffers frequent hurricanes. The islands have limited natural fresh water resources; private cisterns collect rainwater for drinking. The primary natural resources are spiny lobster, conch and other shellfish.

The two distinct island groups are separated by the Turks Passage.

In August 2009, the United Kingdom suspended the Turks and Caicos' self-government after allegations of ministerial corruption. The prerogative of the ministerial government and the House of Assembly are vested in the islands' incumbent governor, Gordon Wetherell, for a period of up to two years.

Recently Business Week published a story called: MasterCard, Visa, and the Card Sharks in which revealed details of some banking activity from the Turks and Caicos. It doesn't paint a good picture for the types of operations there but then the country is embattled in court at London so it may be tough times for this idyllic little Island nation.

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.

 

With a Stanfordian echo, news has arrived of yet another scandal involving falsified certificates of deposit. US regulators have put a halt to a suspected $68 million Ponzi scheme at Millenium Bank, based in St Vincent and the Grenadines.

There have been rumours for some time that Millenium bank was offering CD's at implausibly high rates, but this is the first time the alledged scam has been made public.

Millenium bank has apparently been marketing its financial products to wealthy US citizens since 2004, and described itself as subsidiary of a Swiss bank, United Trust of Switzerland SA. The investors, lured by the prospect of high investment returns offered by banking offshore, happily snapped them up.

"The defendants disguised their Ponzi scheme as a legitimate offshore investment and made promises about exuberant returns that were just too good to be true," said the director of SEC's texas office Rose Romero.

"Investors need to be especially cautious when placing money with entities that may be outside the reach of U.S. regulators," Romero added.

"None of the investor funds were used for any investment purpose," the SEC said in a court hearing. Instead the fraudsters made off with the vast majority of the funds, keeping only a small amount to pay off existing investors.

Clients were asked to send checks to the Caribbean, where they were forwarded to California, the SEC said, The money was then deposited in a Las Vegas bank account opened by some of the conspirators.

Only $3million of the collected funds was returned to investors, according to the SEC.

Britain's crown dependencies and overseas territories are scrambling to defend themselves against the latest rhetoric issued by high-tax countries.

Supposedly 'leading' offshore centres are pleading for a more discriminate approach to distinguish themselves from the 'dirtier' unregulated tax havens.

Geoff Cook of Jersey Finance, which represents the island's financial industry, says: "The thing we worry about is we are being tarred with the same brush as everyone else."

Of international leaders: "They are desperate to find any way they can of increasing their tax collection and they are desperate to deflect attention away from the domestic situation."

The Cayman Islands took a similar stance:"We fear a very indiscriminate position will be
taken which owes more to protectionism and prejudice than judgement and intellectual application,"  said Deborah Drummond, deputy financial secretary of the Islands.

Last week the US administration offered encouragement for new anti-tax haven legislation that builds on the 'stop tax haven abuse act' introduced by then Senator Obama. If passed, numerous tax havens, among them many British colonies and territories may find themselves on the receiving end of sanctions which force them to be more transparent. The UK, Germany and France have also called for a crackdown on tax havens, hoping to make it a top issue at April's G20 summit.

Tax evasion scandals linked to swiss offshore banking and Liechtenstein have increased pressure, as has the banking crisis, when it was revealed that banks were some of the heaviest users of offshore jurisdictions.

Although it is widely opined by experts that offshore banking is not a major factor in the global financial crisis, many governments may find it easy to target offshore tax havens, leveraging on their close links to the banking sector.

The knives are out....
SEC Release: The Securities and Exchange Commission today charged Robert Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an $8 billion CD program.

Stanford's companies include Antiguan-based Stanford International Bank (SIB), Houston-based broker-dealer and investment adviser Stanford Group Company (SGC), and investment adviser Stanford Capital Management. The SEC also charged SIB chief financial officer James Davis as well as Laura Pendergest-Holt, chief investment officer of Stanford Financial Group (SFG), in the enforcement action.

Pursuant to the SEC's request for emergency relief for the benefit of defrauded investors, U.S. District Judge Reed O'Connor entered a temporary restraining order, froze the defendants' assets, and appointed a receiver to marshal those assets.

The SEC's complaint charges violations of the anti-fraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act, and registration provisions of the Investment Company Act. In addition to emergency and interim relief that has been obtained, the SEC seeks a final judgment permanently enjoining the defendants from future violations of the relevant provisions of the federal securities laws and ordering them to pay financial penalties and disgorgement of ill-gotten gains with prejudgment interest.

With Stanford's attorney already bailing this one looks a dead cert. This question is, how did he keep is a secret for so long?

FBI agents are investigating Antigua-based Stanford International Bank, owned by Texan billionaire Sir Allen Stanford.

The bank has come under scrutiny because it offers CD's with returns at twice the rate of 'conventional' banks. Former employees have also witnessed ''unethical and illegal practices'', reports the times of London.

Mark Tidwell and Charles Rawl alledge that the bank gave clients false indications of investment performance and destroyed documents during a previous investigation by the SEC.

Although it acknowledges an investigation by the SEC is underway, the bank declined to comment on reports of FBI and IRS investigations started months ago. 

Stanford International Bank has an impressive track record, and currently has $8.6 Billion under management. It has succeeded in attracting at least 30,000 depositors in recent years, the majority Latin American. 

The Flamboyant Financier

This is not the first time financier Allen Stanford has courted controversy. The billionaire Texan was also famous for financing the twenty20 cricket tournament between England and the West Indies that promised a prize of $20 million, announcing his arrival in the UK by landing at Lord's cricket ground in a golden helicopter. During a promotional photo-shoot the divorced father of six caused outrage by posing with one of the England player's wives on his lap.

The Queen's office in Buckingham palace recently asked him to change a page on his website which said that he had been knighted by the Earl of Wessex, when it was in fact the Antiguan government which had conferred the honor.

Which offshore jurisdiction is the best for setting up a company to conduct business in the burgeoning I-Gaming Industry? This was the topic of a conversation recently in Barcelona, amongst a group of foreign entrepreneurs attending conferences related to Internet Gambling.

At a glance the I-Gaming Industry is over $10 Billion USD per year in gross revenues, probably just in Poker and Casino because Sportsbetting is more difficult to properly quantify, as much of it happens over the telephone and is so globally pervasive as to be in a category all of it's own.

Remittances to Latin America and the Caribbean will continue to grow in coming years and will surpass $100 billion a year by 2010, according to the Inter-American Development Bank’s Multilateral Investment Fund (MIF).

“Given present economic and demographic trends in Latin America and the Caribbean and in industrialized countries, remittances will continue to grow in volume over the next few years to more than $100 billion a year by 2010,”

MIF Manager Donald F. Terry told a news conference on the eve of the annual meeting of the IDB Board of Governors.

A Massachusetts-based St. Maarten website, everythingstmaarten.com, is giving away nine one-week St. Maarten vacations and many other prizes (including a month-long vacation to the top winner) to celebrate reaching two million site visits this year.