We wrote not too long ago here about our methodology for tracking down offshore accounts and how difficult and expensive this process can be. Well, it looks like locating offshore accounts may have just become a tiny bit easier.
As reported in The New York Times, earlier this year, the International Consortium of Investigative Journalists leaked records which disclosed proprietary information about more than 120,000 offshore companies and trusts and nearly 130,000 individuals. The consortium also published an online database which allows users to search through more than 100,000 secret companies, trusts and funds created in offshore locales. The database even goes so far as to identify the entities’ true owners where possible.
As investigators, we’re excited to hear about this new database, but we recognize that it is only a starting place for offshore asset searches. The trusts in the database represent only a small portion of the offshore trusts that are out there. If your debtor’s name does not appear in the database, by no means does this mean that your debtor doesn’t have offshore assets. You should also keep in mind that people don’t always put money in their own name.
The New York Times article also highlights the prevalence of Americans hiding their assets offshore. In particular, the Cook Islands have become the perfect place for the wealthy to shelter assets from existing or potential creditors. Business with the Cook Islands can be conducted electronically and none of the items kept in trust need to be physically located there. Further, the laws in the Cooks are written to protect foreigners’ assets from legal claims in their home countries. Even the United States government has had difficulty going up against a Cook Island trust. This means that locating the hidden trust is only half the battle–it may still be very expensive to ever receive a dime of it.
That said, given that Americans have put approximately $1 trillion in offshore accounts, going after a foreign trust can be worth the time and expense where enough money is at stake.