But wait, there's more. Professional sociopaths are not satisfied with the loot alone from these scams. No. Even scumbags have their standards. And what kind of professional bust-out artist would allow big chuck of their ill-earned dough to be siphoned off by - of all people - the feds, in form of taxes? So, total tax avoidance at the end of a successful bust-out is considered mandatory in order to maintain the first rule of a well-executed bust-out; nobody gets paid, not the banks, not the creditors and certainly not the feds.
Which brings us to the world of off-shore banking and countries like Panama, come into the pictured. When full autopsies are performed on the more spectacular bust-outs you almost always find the "equity partners" hiding their identities behind opaque off-shore shell corporations. Even the members of the boards of directors of these smoke-and-mirror paper corporations are "proxy directors," these are off-shore lawyers who make a living doing nothing but pretending to sit on the boards of hundreds, even thousands, of paper corporations.
The US Dept. of Justice and IRS are fully aware of all this, but have found these paper, off-shore corporations virtually bulletproof. From a DOJ report:
"Criminals use banks and businesses to launder money in offshore locations with strict privacy laws such as Panama, the Cayman Islands, or the Isle of Man. In these locales, law enforcement struggles to determine the true ownership of assets ... DOJ has identified U.S.-based shell companies as especially difficult to investigate because "lax company formation laws [allow] criminals [to] form [them] quickly and cheaply and obtain virtual anonymity.
"Individuals can distance themselves from the actual formation of specific shell companies by using company formation agents (registered agents) to establish them. Shell companies enable criminals to move money around the globe through legitimate bank accounts without attracting law enforcement scrutiny. With relative ease, a criminal organization can open multiple shell companies worldwide and systematically distance ill-gotten gains from their criminal origins, leaving behind a hard-to-untangle web of accounts, legitimate corporations, and transactions."
Bain Capital's Panamanian Roots
Mitt Romney started his equity partnership, Bain Capital, with millions of seed money from shell corporations doing business out of one of the most notorious, and most felon-popular, off-shore haven, Panama. Who were the real people supplying money to Bain in those early days? We don't know, and we never will know.. ever. What we do know is, if you're looking for the one off-shore haven favored by the worst of the worst, look no further than Panama.
Los Angeles Times: July 19.
"The first outside investor in Bain was a leading London financier, Sir Jack Lyons, who made a $2.5 million investment through a Panama shell company set up by a Swiss money manager, further shielding his identity. About $9 million came from rich Latin Americans, including powerful Salvadoran families living in Miami during their country's brutal civil war. ... That first (Bain) investment fund - used to invest in start-up companies and leveraged buyouts - paid out a stunning 173 percent in average annual returns over a decade...U.S. officials were accusing some exiles in Miami of funding right-wing death squads in El Salvador. Some family members of the first Bain Capital investors were later linked to groups responsible for killings..."(Full Story)
Romney told reporters that he checked the foreign investors' backgrounds and was quite certain they were not criminals. But his campaign refused to provide the Los Angeles Times with specifics when asked to do so last week.
Sir Jack Lyons died in 2008, but his son, David Lyons, told the LA Times his father did invest in Bain's early days, and that wealthy Europeans like his father often invested through offshore shell corporations. "It allowed some confidentiality," he said. "It allowed a lot of things."
Mobsters and other white collar crooks also appreciated the "confidentiality" not to mention those "other things."
Panamanian shell corporations offered. Here's how one of the mob's most successful white collar "financiers," Lawrence Iorizzo, explained to us back in the mid-1980s how he and New York mob money launder, Mario Renda, used Panamanian corporations to hide the money they were making busting out saving and loans during the thrift crisis of the 1980s:
According to Iorizzo, he and Renda came to an agreement under which Renda would place money at a bank of Iorizzo's choice, (Central National Bank of New York (CNBY). The bank then made loans to a Panamanian shell corporation formed by Iorizzo. (Renda, he said, was paid $33,000 under the table for each deal.) As I said earlier, these guys were quite proud of themselves and were not bashful about explaining their feats. Iorizzo explained;
"I literally purchased the company's papers from a lawyer in Panama who maintained them, along with other such entities, on the shelf of a bookcase in his office in Panama,"
Iorizzo said he used Panamanian shell corporations in an earlier gasoline tax scam the ran in New York, enticing banks to loan him money by depositing his illegal gasoline tax money at their bank. Of course he had no intention of leaving the money there because, he noted with pride, "I had no intention of repaying those loans."
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