Eleven methods a trust company (TCSP) was willing to assist in tax evasion.

In 2018 Jersey's Royal Court heard the case of a former local financier and employee of the multi-millionaire St. John’s Manor occupant John Dick [DICK], who was accused of fraudulently “extracting” tens of millions from a family trust.

In the 2018 Royal Court judgement [Heinrichs v Pantrust and Ors 02-May-2018], there are allegations from Vern Heinrichs that the DICK ran a “complex and sophisticated” operation that allowed him to take up to CAD$ 50 million.

Ms Heinrichs calculated that some CAD$4.8M has been illicitly extracted by the first to third respondents from the 1977 Brazilian Trust through interest turns between 1994 and 2014.  The full extent of the claims for breach of trust against the first to third respondents is CAD$50M [approx.]. The court declined to support those allegations fully but did offer directions.

• https://www.jerseylaw.je/judgments/unreported/Pages/%5B2018%5DJRC081A.aspx

Exhibited to Mr Heinrichs’ affidavit WAS a letter to an unconnected family dated 6^th July 2000, enclosing papers that should not “fall into the wrong hands”.  

These papers summarise some ELEVEN METHODS by which La Hougue Boëte was apparently willing to assist in tax evasion.  

11 WAYS TO LAUNDER MONEY.

IT IS REPORTED The 12-page letter titled “Summary of Methods available to enable the movement of assets offshore” is associated with Richard Wigley, who was involved with a financial services company named La Hougue.

 Wigley noted,

• “Naturally, I have a concern that any of these papers should fall into the wrong hands, so please guard them carefully.”

It is claimed that Wigley’s preferred method for meeting clients was face-to-face, minimising incriminating documents.

But at least once, for an unknown reason, he broke his rule. He followed up one of his face-to-face meetings with a letter to a trusted client, spelling out 11 dishonest options for hiding the client’s money in tax havens.

His caution was understandable. The descriptions of the methods that followed were explicit in their intention to deceive and evade laws.

The following are some reported Wigley techniques.

• The first method, “Los Cabos property investment”, involved fake investment in a real estate development on Mexico’s Baja California peninsula. La Hougue had bought 65 acres of land there and produced a brochure and site plan. But Wigley made it clear that no real investment was planned.
• He offered that the client could “invest” US$100,000s, about the value of an apartment. “An agreement would be drawn up and the remittance would be made payable to Los Cabos,” he explained, but in fact “the monies would be credited, through La Hougue, direct to the client’s account.”
• No money would go to the Mexican property development. It was simply a trick to move a large sum of money into the client’s secret offshore bank account.
• Wigley reassured the client that “If enquiries were made by the investor’s Tax Authority, suitable confirmations and assurances as to the non-profitability can be given to show that, to date, there had been no capital gain and no income distributions had occurred.”
• It was unlikely the ruse would be uncovered, however. “It should be noted that only the land is retained in the name of Los Cabos and the business transaction is solely under the control of of La Hougue,” he wrote – i.e. the only records would be inside Wigley’s company, where tax haven laws protected them from scrutiny. “No information could be obtained separately by any investigating party,” he said.
• The “consultancy fees” trick – involved business owners sending company money overseas to pay non-existent consultancy fees. Wigley explained: “there are usually opportunities to complete a Consultancy arrangement with an offshore Company,” an arrangement that would “purportedly” benefit the client’s company.
• These might be finding sales outlets, business advice and business introductions, “which services appear justified”. The client’s company received invoices and paid the fees, but in reality no payment was made to a consultant. The money was “credited to the client’s Trust account.”
• Besides hiding the money in a secret offshore account, Wigley noted that the (false) consultancy fees could be claimed as a business expense to “reduce the client’s taxes locally”.
• A third method recommended that when the client received one-off payments, it might be possible to transfer the money directly offshore, “there then being no record of the receipt of the funds in the client’s country,” Wigley wrote. Once again “the funds remitted offshore would be credited to the client’s Trust account.”
• He emphasised that “such monies must not be reportable by the entity issuing the payment”; and noted “This arrangement is extremely effective with remittances received from entities resident in countries other than the client related entity.” And so on, through eight more methods, all designed to evade taxes, hide money and cover the tracks of crime.
• Another set of techniques enabled hidden money to be anonymously invested back into the legal economy: buying shares and property and lending money to others (including the clients anonymously lending their own money to themselves).
• The various methods were “layered” – such as transferring money through a succession of tax havens and seemingly unconnected companies with names like Kraken Investments and Danehill Trading – making it harder for government authorities to notice and follow the money.
• There were also “dummy entries” in the financial records (so-called by the staff), and numerous money transfers falsely recorded as “loan repaid” when there was no lender or loan document.
• Wigley’s son James wrote an email to another staff member on 11 March 2008: “When posting dummy entries showing amounts paid – ensure that extended narrative is included stating that not actually paid etc.”
• Some special clients received extra protection by having other people’s names recorded, even on the internal La Hougue records, as the legal owners of their offshore companies and trusts.
• Finally, a large part of the services offered by La Hougue/Pantrust involved methods to allow clients secretly to spend their hidden money.
• Houses were anonymously purchased using offshore money in favourable locations such as central London, then the trust company paid to renovate the houses, redecorate them and cover all the bills.
• They supplied untraceable client credit cards, holidays and travel. Other clients were paid overseas “consultancy fees” for work they had supposedly done for overseas companies – a repeated La Hougue trick – when they were receiving their own money back from off-shore accounts.

FACTUAL SOURCES

• https://www.bailiwickexpress.com/jsy/news/st-john-seigneur-associate-implicated-multi-million-trust-sham/
• https://www.jerseylaw.je/judgments/unreported/Pages/%5B2018%5DJRC081A.aspx

LEAKED INFO SOURCES

• https://eic.network/blog/huge-new-tax-haven-leak-reveals-specialist-money-laundering-company
• https://www.nacional.hr/the-offshore-schemes-of-the-american-satellite-king/

Please note that some of the above information is based on a major leak of decades of the company’s records, which revealed the company’s long-hidden activities. The investigators say Richard Wigley declined to comment.