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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Wednesday, August 13, 2003 - Vol. 5 No. 96
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In This Issue:
* COMMENT: Invest Safely Offshore
* OFFSHORE: Gibraltar Help Wanted. Swiss Cash Delays. Jersey Tax Hikes. Cayman Opportunities. Bermuda Insurance Slows.
* WEALTH: Soaring Gold. ID Theft OK'd. South Africa Amnesty.
China Rights. Japanese Shares Rebound. Tax Evasion Crackdown.
* PRIVACY & RIGHTS: Privacy Privilege Weakened. Cellphone Spying. War Protestors Fined. Lying, Scheming Bureaucrats.
Dangerous Worm.
* CORRECTION: Austria.
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Our guest comment is from MARK NESTMANN, editorial director of The Sovereign Society and author of many books on privacy, asset protection and offshore investing.
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COMMENT: Eight Key Strategies to Safely Invest and Conduct Business Offshore
On June 12, 2003, Marc Harris, offshore financial services provider, was arrested in Nicaragua and deported to the United States. A former Florida certified public accountant (CPA), Harris has been charged with bilking his clients out of millions of dollars, tax fraud and money laundering.
With a staff of 150 employees, the Harris Organisation was only a few years ago one of the world's largest offshore services provider. It claimed that it could not only offer access to extremely profitable offshore investments, but to form and administer offshore trusts and companies, offshore insurance companies and annuities and offshore
banks.
Harris also offered "tax consulting services," and claimed to be able to legally create paper losses for U.S. companies, while actually moving millions of dollars offshore to be controlled by the business owner. In addition, Harris promised clients that they could conduct their business affairs with him based on the strict bank secrecy in Panama and other jurisdictions in which his firm operated.
Despite Mr. Harris' impeccable academic credentials, impressive claims and a huge staff , the bottom line was that he was conducting a massive fraud. What lessons can we learn from this example?
1. Conduct due diligence—don't rely on appearances. You cannot rely on appearances to protect you, but must conduct your own "due diligence" into whatever offshore service providers that you use. In the case of Harris, even a rudimentary investigation would have discovered that his CPA license in Florida had been revoked for misconduct in 1989.
2. Do comparison shopping. The Harris Organisation charged prices one-half or even less of what most of its competitors charged for similar offshore services. Any prospective client that made an effort to compare Harris' prices with that of his competition would have perhaps concluded that the only way that Harris Organisation could survive was to dip into the funds it had under management. Sadly, this appears to be exactly what occurred.
3. Obtain independent advice on your proposed structure or investment. Find competent counsel responsible to you, who by their experience have worked with competent offshore professionals over a long period of time and can evaluate whatever is being recommended to you. In the case of Harris, such a precaution would have revealed that many of the structures he proposed for "tax avoidance" in fact did not legally avoid U.S. tax. The Sovereign Society is one organization that provides contacts with a variety of reliable legal and investment professionals.
4. Turn your back on mouth watering easy profits. The best opportunities require hard work, significant risk and a lot of time to develop. Easy money and promoters that guarantee unrealistic profits (more than 12%-15% annually) are signs of a con or a potential crime.
5. Don't rely on secrecy. Dealing with an offshore promoter who claims that it can help you "hide money" from tax authorities, for instance, is an invitation to blackmail. The promoter knows that since you've broken the law, you are unlikely to make a claim in court for the return of your assets if they disappear.
6. Don't put all your eggs in one basket. Prudent investors globally diversify investments and utilize multiple wealth managers.
7. Stay informed. Hiring a firm offshore to build a structure or manage your wealth is just the beginning. It does not relieve you of responsibility for your own wealth. Read financial publications and be knowledgeable about world events. The Sovereign Society publications, for instance, work to educate consumers about the offshore world, recommend services and expose scams such as Marc Harris. There is no substitute for knowledge.
8. If it's too good to be true—it probably isn't true. This is the most important precaution of all. Unrealistic profits, unrealistic promises or vague feeling that you're being "led on" are all indications that whatever deal you're being "pitched" is best avoided.
Mark Nestmann
Vienna, Austria
assetpro@nestmann.com
Special thanks to Council of Experts member DAVID MELNIK for
inspiring this article.
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COMMENT LINKS:
* The Marc Harris Organisation: It could happen to you.
LINK: http://www.quatloos.com/groups/m-harris.htm
* The Harris Organisation.
LINK: http://members.tripod.com/~CubanInvesting/marcharris.html
A promotional link for the now-defunct company.
* More tips to avoid offshore fraud. LINK:
http://www.sboff.com/site/offshore/fraud.html
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* OFFSHORE *
GIBRALTAR: HELP WANTED. Local online gambling firms hiring.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12952
* Bahamians favor legalized gambling.
LINK: http://www.thenassauguardian.com/editorial/278387458387764.php
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SWITZERLAND: HOLOCAUST CASH DELAYS. Swiss banks
create US$1.25 billion (SFR1.7 billion) fund for Nazi victims, but only
1/3 of funds distributed.
LINK: http://www.swissinfo.org/sen/swissinfo.html?siteSect=105&sid=4117577
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JERSEY: TAX HIKES "INEVITABLE." Residents warned of tax
hikes when corporate taxes eliminated.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12969
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CAYMAN ISLANDS: TELECOM OPPORTUNITIES. 11 companies
bid for soon-to-be-disbanded monopoly. LINK: http://www.caypolitics.com/index5.vep?_FO=politics&F=read&_S=dna2&_M=&_RM=Expand&_MID=13690&username=anonymous&pop3host=caymail.com&session_id=
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BERMUDA: INSURANCE COMPANY FORMATIONS SLOW.
30% decline from year ago.
LINK: http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20030812/BUSINESS/108120039
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* WEALTH *
GOLD IS SOARING. Fund managers increasingly invest "scared
money" in gold, hard assets.
LINK: http://www.forbes.com/finance/2003/08/11/cz_nh_0811guru.html
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ID THEFT VICTIMS CAN'T CLAIM NEGLIGENCE. US state court
says it's OK for credit card companies to issue cards to impostors.
LINK: http://www.law.com/jsp/article.jsp?id=1059980448638
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SOUTH AFRICA: EXTENDED TAX AMNESTY? Government
anticipates an "avalanche" of applications before November deadline.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12964.
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CHINA: RIGHTS OF PRIVATE FIRMS TO EXPAND. Plan to put
private companies on equal footing with state enterprises. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059478945323&p=1012571727102
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TOKYO: UNEXPECTED REBOUND IN JAPANESE SHARES.
LINK: http://www.nytimes.com/2003/08/10/business/yourmoney/10TOKY.html
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IRS, STATES, JOIN FORCES TO ROOT OUT TAX EVADERS.
State tax collectors will work with IRS to pursue tax scofflaws. LINK: http://www.boston.com/news/nation/articles/2003/08/11/irs_seeks_states_help_in_hunt_for_tax_evaders
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* PRIVACY & RIGHTS:
US LAWYERS VOTE TO WEAKEN ATTORNEY-CLIENT
PRIVILEGE. "Whistle blowing" in some fraud cases approved.
LINK: http://www.law.com/jsp/article.jsp?id=1059980449338
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IS YOUR CELLPHONE SPYING ON YOU? New cellphones
pinpoint your location within 50 meters.
LINK: http://www.legalaffairs.org/issues/July-August-2003/feature_koerner_julaug03.html
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IRAQ WAR PROTESTERS FACE FINES. Federal law prohibits
visits to Iraq by demonstrators, US Treasury says.
LINK: http://www.washingtonpost.com/wp-dyn/articles/A46248-2003Aug11.html
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CANADA: "SCHEMING, LYING BUREAUCRATS" MUST PAY.
Court orders Feds to pay C$70 mil. (US$50 mil.) to victims of "shocking" government plot to destroy a business.
LINK: http://www.nationalpost.com/home/story.html?id=C6691B2D-9CA7-4A3E-B8E3-91FE73DFCAB7
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"WEB WORM" HITS WINDOWS 2000/XP. Home users mainly
affected.
LINK: http://eletters.eweek.com/zd/cts?d=79-156-5-8-7244-19876-1
* Download patch at LINK:
http://www.microsoft.com/security/security_bulletins/ms03-026.asp
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* CORRECTION *
Yesterday's A-Letter omitted mention of one of The Sovereign Society's top-rated offshore banking havens, AUSTRIA, where bank secrecy is protected by a law of constitutional rank. We apologize for the omission.
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER. *
Bob Bauman, Editor. * SUBSCRIBE FREE or send to a friend at
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