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After the invasion of Ukraine, when the United States targeted the Russian oligarchy, the trail of assets continued to lead to our own backyard. Our country not only became a haven for shady foreign funds, it also cultivated a familiar class of billionaires who own yachts, control industries, and extract resources. His January 2024 and February 2024 issues of our magazine explore the rise of America's oligarchy and what it means for the rest of us. You can read all the pieces here.
government. rivals. Ex-wives. When you become an oligarchy, everyone wants a piece of you. But the ultra-wealthy have adapted quickly. They put valuable real estate in their children's names, hire captains to retake captured boats, and use diplomatic immunity to avoid visa bans.
Here are some ways foreign billionaires and American elites keep all their wealth for themselves.
As of January, the Treasury Department finally began requiring LLCs to disclose the names of their owners. But for years, anyone could buy real estate through shell companies with absolutely no disclosures. And in a world of 1 percenters, penthouses and waterfront mansions can help protect or cleanse your property.Recent times Investigation of Manhattan real estate reveals more than 200 shell companies have purchased units in the building, including 17 billionaires and Tom Brady's corporate front did.
The simplest formula in the book is to open a bank account in a confidential jurisdiction using a anonymous trust. Voila: You can now do business anywhere without being smarter than anyone else. Gary Kalman, executive director of Transparency International in the US, said: “If I go into a house and pay cash from a Swiss bank account or a Dubai bank account, and go buy real estate in Miami or New York or anywhere else,'' Then I can buy it in secret.'' . “And there is no requirement that anyone have to do a money laundering test.” The Fed says anti-money laundering rules for real estate will eventually be implemented.
A 2022 Treasury study noted that “high-value art is highly mobile, making it an ideal way to transfer value internationally.” Not only is art easier to transport, it often outperforms the stock market. U.S. auction houses are not bound by anti-money laundering laws such as beneficial ownership requirements or the Bank Secrecy Act. A 2020 Senate report calls the arts sector “the largest legal and unregulated market in the United States.”
Remember those giant self-storage facilities in the movies? doctrine, Where did Kenneth Branagh hide Goya? Freeports (duty-free zones near shipping ports or airports) are a reality and a preferred tool for the ultra-wealthy to move or park expensive tangible assets. In Switzerland, non-residents can store as many goods as they like without paying taxes, and can do so virtually anonymously, subject to beneficial ownership requirements (identifying who controls a company or asset). This is due to the lax reporting (regulations for The free port is especially popular as a destination for expensive art collections. The Free Port of Geneva has three times as many works of art as his in the Louvre, and Picasso alone has 1,000 of his works.
To move assets, it helps to be able to move yourself. Billionaires from Peter Thiel (New Zealand) to Eric Schmidt (Cyprus) to Harlan Crowe (St. Kitts and Nevis) have all obtained citizenship in countries with “golden passport” programs. ing. The cost can run into the millions of dollars, but the perks are worth it. Golden passports help the 1 percent evade sanctions, protect their nest eggs, or, in Thiel's case, evacuate the world when things go badly wrong.
Obtaining a passport elsewhere does not exempt you from paying U.S. taxes. But you can save a lot of money by cutting out the American stuff. Carnival Cruise Line founder Ted Allison retreated to Israel in 1990, primarily to avoid inheritance taxes. Facebook co-founder Eduardo Saverin traded his US passport for Singaporean citizenship ahead of the company's 2012 IPO. Saverin said the timing was fortuitous, but given the lack of capital gains and inheritance taxes in emerging economies, it could be well worth it. And then there's Oleg Tinkov, who renounced his U.S. citizenship in 2013 and moved to Russia to avoid paying hundreds of millions of dollars in taxes on his billions of dollars in investments. Regardless, federal authorities pursued him on tax evasion charges. After nine years and $509 million in reparations, Tinkov renounced his Russian citizenship following the invasion of Ukraine. At least he still has Cyprus.
To get the best returns from trusts and LLCs, oligarchs and the ultra-wealthy turn to specialized professional firms. A team of Dartmouth researchers found in a 2023 study that the most effective way to sanction oligarchs is to rely on trusted lawyers, who actually manage and move their wealth with the backing of the “wealth” industry. He insisted that his goal was to pursue accountants and bankers.
Italian authorities have seized the 65-foot yacht of sanctioned Russian businessman Alexei Mordashov. Lady M, just days after the invasion of Ukraine. But Mordashov didn't make the same mistake with his $500 million megayacht. nord. The ship turned off its transponder and fled to Vladivostok, Russia. She then docked in Hong Kong for a period of time before the ship switched off its transponder again and continued sailing around the world for about eight months. The next time I turned on the tracking signal, it was in the Maldives.
