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Untouchable millions stashed in Cook Islands

Hundreds of millions of dollars are being hidden in the Cook Islands, beyond the reach of authorities, angry wives and litigants in civil lawsuits, a report says.

It includes millions held in a trust controlled by Texas Ponzi scheme fraudster and failed cricket financier R Allen Stanford, now serving a 110-year jail term.

Trust schemes in the Cooks have proven beyond the reach of authorities around the world. The tiny country has just 14,000 people in the islands and 58,000 expatriates in New Zealand.

In Paradise of Untouchable Assets, the Washington based International Consortium of Investigative Journalists says it has a cache of documents revealing the owners of about 700 Cook Islands trusts.

ICIJ senior writer Leslie Wayne said that as they examined the documents it was clear hundreds of wealthy people had stashed their money in the Cook Islands.

She described the place as a global pioneer in offshore asset-protection trusts, with laws devised to protect foreigners' assets from legal claims in their home countries.

She said the Cooks offered a different kind of secrecy to that of the Cayman Islands, Switzerland and the British Virgin Islands.

"The long arm of United States law does not reach there," she said.

"The Cooks generally disregard foreign court orders, making it easier to keep assets from creditors, or anyone else."

ICIJ said Cooks trusts appealed to a broad swath of wealthy Americans fearful of getting sued, and some who had been.

A Florida lawyer, Howard D Rosen, has been setting up Cook trusts for more than 20 years and in a video he says those with more than US$1 million (NZ$1.2 million) in assets should consider Cooks trusts for self-preservation, but especially real estate developers, health-care providers, accountants, architects, corporate directors and parents of teenage drivers.

ICIJ said there were 2619 trusts in the Cooks, most of them held by Americans.

They said the trusts were popular with the wealthy in Palm Beach, Florida, New York and Hollywood.

ICIJ described one trust held by Denise Rich, former wife of the disgraced trader Marc Rich.

Her trust contained more than US$100m in assets, including her yacht, the 48-metre Lady Joy, a Learjet and a Swiss bank account.

ICIJ said there was nothing illegal in setting up a trust in the Cook Islands but said they were often used by those who suspected they could be sued. That included doctors facing malpractice suits, businessmen avoiding creditors and some who had been sued by the US government.

That included Stanford, who has a "Baby Mama Trust" in the Cook Islands, named after a mistress with whom he had two children and who was the trust's beneficiary.

"Baby Mama" contained proceeds from the sale of a US$2.5 million Florida home - proceeds that were held in Swiss and Isle of Man accounts and were now among 30 offshore accounts subject to a forfeiture order to pay Stanford's victims, ICIJ said.

It said that while offshore accounts around the world had won increasing attention from Washington, the Cook Islands had been overlooked because it did not appear to have been widely used by multinational corporations to avoid paying taxes,and because they had not been linked to terrorist-financing or money laundering.



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