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Own your own private bank and the world is your oyster,
just don't choke on the pearl! Believe it or not, one of the largest
inquiries we receive are from persons who have read a particular
dark-blue covered book and are convinced that their path to financial
heaven is an offshore private bank which they can form for $5,000
on the dark side of the moon, or the South Pacific, whichever is
closer, and that the financial barons of the world will being knocking
on their door with multi-billion dollar deposits, or else that their
own private bank will allow them to navigate the financial waters
of the US reserve system with the quiet stealth of a nuclear attack
Yeah, well good luck. If you've purchased the book
you are already in the hole and you will be lucky if your losses
are limited to the purchase price. Worse, you can pay the 5-figure
consultation fee of one of these so-called offshore experts to review
your situation for suitability. At worst, you can actually form
one of these things.
Follow-Up: BusinessWeek, 1 June 1998
"That same year , two Harris banks
in Montserrat were shut down by British regulators cleaning
up a bank scandal on that island, say regulators from the U.S.
and Britain. * * * Harris . . . obtained two bank licenses from
the government of Montserrat. His intermediary was Jerome Schnieder,
another offshore promoter, who helped set up as many as 200
Montserrat banks in the 1980s, say two regulators. The banks
collected deposits from Americans without dispensing promised
loans. 'Many of the victims were retired Americans or other
people on low incomes,' says a U.S. regulator." -- BusinessWeek,
1 June 1998.
The Numerous Problems with Private
The principal problems with these offshore private
banks are as follows:
Despite all the fancy research memos and weird
trust structures, these banks are effectively U.S. owned and
controlled and therefore must report all operations to the
U.S. Internal Revenue Service.
Banks which are formed in jurisdictions which
do not effectively regulate banks will not be considered banks
for purposes of U.S. tax law; instead, they will simply be
considered Controlled-Foreign Corporations with all the nasty
tax consequences that entity entails.
Banks which are poorly capitalized (undercapitalized)
will not be considered banks for purposes of U.S. tax law.
Banks which do not regularly conduct the business
of banking will not be considered banks for purposes of U.S.
tax law, i.e., if your only customers are yourself
or related family or businesses it will not be considered
a bona fide bank.
Banks which are not audited annually by licensed
accountants in the jurisdiction of formation will not be considered
banks for purposes of U.S. tax law.
If you try to hide assets or income in an offshore
bank from the U.S. Internal Revenue Service, you have committed
tax evasion and will probably pay an extended visit to Club
See also Black
Holes & U.F.O.s
Goldhaven Scams Page -- http://www.goldhaven.com
-- Matt Blackman's excellent site candidly reviews the various
books on the offshore industry, and gives updates on the major
offshore frauds. A "must read" site for those who don't
know who is legitimate and who is a scammer within the offshore
industry -- for instance, read Matt's review of the famous "Schneider
series" on offshore private banking: "Jerome Schneider
has done it again! He's dumped another infomercial on the unsuspecting
public and asked them to pay for it." -- Matt Blackman