The Bahamas is receiving a bad name in the international press with a number of high-profile cases pointing to the alleged use of this country as a place to hide ill-gotten gains or avoid paying taxes to other states.
Over the past weeks, media establishments around the world have been carrying these reports, which threaten to tarnish the Bahamasﾴ reputation as a jurisdiction with zero-tolerance for money laundering.
The list of unrelated cases is long and some of them stretch back prior to 2000, when the Bahamas overhauled its financial services legislation to protect its reputation.
But many of these cases are now coming to light as the government continues to state its commitment to preserving the integrity of the local financial services sector.
Over the weekend, the Associated Press reported that the president of Brazilﾴs largest state-owned bank failed to declare more than $500,000 in overseas bank transactions to tax authorities.
The name of Banco do Brasil President Cassio Casseb, who denied any wrongdoing, appears on an account at Citibank, according to reports. Brazilian authorities say he was attempting to avoid paying taxes.
Meanwhile, a report in the London Free Press said a fugitive who has refused to say what became of the $80 million given to him by investors has told his lawyers heﾴs funnelling cash into an offshore account in the Bahamas that is untraceable.
ﾓThe reason for the Bahamas account boiled back to traceability,ﾒ Paul Mack, the manﾴs attorney, was quoted as saying. ﾓMoney can be put in and out of the account and it canﾴt be traced.ﾒ
In another unrelated matter, a New York City podiatrist recently pleaded guilty to charges of using Caribbean bank and credit card accounts to launder money and evade city, state and federal taxes on more than $300,000 in income.
A CNN.com report said Gordon John, 45, was under investigation after the District Attorney subpoenaed MasterCard records of offshore accounts about two years ago.
Thousands of those cards were reportedly issued by Leadenhall Bank & Trust Co., which is located here in Nassau.
There was also a report over the weekend that a company owned by a Mexican consultant to a Texas district office received payments totalling $240,000 in 1998 via wire transfers to a bank in the Bahamas.
Investigators say the money was wired to the Bahamas so the consultant would not have to pay taxes in Mexico.
One of the more widely-reported cases that questioned the integrity of local banking institutions is the case involving former Chilean dictator Augusto Pinochet.
According to The Observer in London, investigators believe that Riggs, a Washington-based bank with a branch in London, helped Pinochet set up two offshore shell corporations in the Bahamas.
Ashburton Company and Althorp Investment reportedly did not have any employees or offices, but were listed as the nominal owners of Riggsﾴs bank accounts and certificates of deposits that benefited Pinochet and his family.
All financial services institutions are now required to have a physical presence in the Bahamas as a result of the 2000 legislation.
A new report from the Central Bank of the Bahamas last week said despite a decline in the number of licenses, entities having established presence in the Bahamas increased to 216 at the end of 2003 from 203 in 2002. This is the largest amount of entities to ever have maintained a standalone presence in the country.
Candia Dames, The Bahama Journal
