According to the Wall Street Journal’s Marketwatch, last month, three wealth managers, Eric St-Cyr, Joshua VanDyk and Patrick Poulin were arrested in Miami and charged with money laundering and conspiracy to launder money on behalf of U.S. Clients.  According to the indictment, St-Cyr, VanDyk and Poulin worked together to conceal and launder wealthy Americans’ money by using trusts and foundations, with the funds eventually landing in the Cayman Islands.  The slick money managers were not so slick when they demonstrated to 3 undercover IRS agents how they would launder their money from Virginia to Turks and Caicos and finally the Caymans.  

We’ve blogged about how U.S. authorities are closing in on Americans evading taxes and laundering money through Swiss Bank Accounts.  The Miami arrests are newsworthy because the focus is on the Cayman Islands.   We don’t know how much U.S. authorities know about accounts in the Cayman Islands, but experts believe that the authorities do have names of account holders there and at the very least they probably have the names of people on Poulin, VanDyk and St-Cyr’s customer list.

What does this mean for the future?  Perhaps more people will steer their money to other off-shore shelters such as the Cook Islands, known as one of the best asset protection jurisdictions in the world.  Others may move their money from banks to freeports, massive off-shore warehouses for the ultra-rich.  Freeports are more often used to store valuable art, and other large expensive goods, but more and more, people are physically storing huge amounts of cash in them. 

Regardless of where the money goes, our approach to finding it is still the same.  For one, look for documentary proof onshore of offshore activity.  When we can legally and ethically access computers we find that they have a wealth of information on them.  It can also be helpful to take a look at tax returns, which our matrimonial clients usually have access to.  Additionally, it’s smart to trace where the offshore assets come when they return onshore.  Take a look to see which parties are paying certain bills.  If a school tuition bill happens to be paid by a Cook Islands LLC, you just might be onto something.