(Moneywatch) The off-shore tax havens of least 30 Americans accused of fraud, money laundering or other financial crimes have been unearthed in a groundbreaking report by The International Consortium of Investigative Journalists and a global consortium of news outlets.
The first articles based on a cache of 2.5 million files were published today, exposing secrets of more than 120,000 offshore entities -- including shell corporations and legal structures known as trusts -- used to hide the finances of politicians, crooks and others from more than 170 nations.
These havens are harboring an enormous amount of money. One study estimated the total could be as high as $32 trillion. That's roughly the size of the U.S. and Japanese economies combined.
The documents give a first-ever look at how agents for giant private banks would incorporate companies in Caribbean and South Pacific micro-states. These companies would then have front people called "nominees" to serve, on paper, as directors and shareholders -- creating another layer of secrecy and protection for the companies' real owners.
The ICIJ's review of documents from just one company which sets up off-short companies and trusts, Singapore-based Portcullis TrustNet, identified 30 American clients who are in legal trouble for their financial dealings. According to the ICIJ, these include Paul Bilzerian, a corporate raider who was convicted of tax fraud and securities violations in 1989, and Raj Rajaratnam, a billionaire hedge fund manager who began serving an 11-year prison sentence in January for his role in one of the biggest insider trading scandals in U.S. history.
The documents also reveal detailed information about the financial dealings of array of notorious people and companies including international arms dealers, smugglers and a company the European Union says is front for Iran's nuclear-development program. Records have also been found on:
- Maria Imelda Marcos Manotoc, daughter of the late Philippine dictator Ferdinand Marcos. Following the release of the data, Philippine officials said they hope to learn if any of the money now held by Manotoc is part of the estimated $5 billion her father amassed through corruption.
- Individuals and companies who stole $230 million from Russia's treasury in a case which strained U.S.-Russia relations and led to a ban on Americans adopting Russian orphans.
- A Venezuelan man accused of using offshore companies to fund a U.S.-based Ponzi scheme and spending millions of dollars to bribe a Venezuelan government official.
- A corporate mogul who got billions of dollars in contracts from the government of Azerbaijan while serving as a director of offshore companies owned by the Azerbaijani president's daughters.
The ICIJ and 86 investigative journalists worked for more than a year to make sense of cache of 2.5 million files. The reporters came from new outlets in 46 countries, including The Guardian and the BBC in the U.K., Le Monde in France, Süddeutsche Zeitungand Norddeutscher Rundfunk in Germany, The Washington Post, the Canadian Broadcasting Corporation and 31 other media partners around the world