Category: Archive

Memo prompts probe of Irish tax-scam link

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Irish involvement in an elaborate tax-evasion scheme involving

secretive trusts in the central European principality of Liechtenstein is to be investigated by the Revenue Commissioners following revelations about a confidential memorandum.

The document was published on the Internet by RTE with the names blacked out and it suggests that a wealth businessman was planning to hide the proceeds of the sale of a business to a U.S. buyer in the small Alpine tax haven between Switzerland and Austria.

The scheme is similar to similar schemes connected with other havens like the Ansbacher accounts in the Cayman Island and offshore schemes in the Channel Island and the Isle of Man.

In the Liechtenstein case, it appears that the attraction of the scheme was avoidance of income tax and more particularly inheritance tax.

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The memo was drawn up following a fact-finding visit to Zurich in 1984 and details meetings with banks and accounts. A Swiss-based Irish accountant explained the main details of the scheme to the visitors from Dublin.

It says the greatest problem will be arriving at a "suitable cosmetic from the U.S. point of view and having regard to the fact that they are a U.S. merchant bank."

However the author received reassurance for his Irish client from a Swiss/Liechtenstein company that a lot of German businesses were being sold to Americans and the proceeds were going into such trusts schemes "so obviously the thing can be done."

RTE points out that the Ansbacher accounts contained hundreds of millions of Irish money in the 1980s which had been reduced to about £4 million in the early 1990s. It says it is "disturbing" that another sophisticated scheme was being investigated in the mid 1980s.

The memo makes clear it is a tax scam and warns that an Irish depositor "should never under any circumstances disclose to any person whatsoever in his own jurisdiction the existence or arrangements for the trust."

It also warns there should never be any correspondence and that the accountancy firm will "operate on straightforward telephone instructions."

"No documents concerning the arrangements whether as regards setting up or operating should ever come into Ireland nor should any meetings be held in Ireland.

The memo also points out "the possible danger that a descendant might well blow the gaffe on the whole thing in years to come by failing to have a true understanding of the nature of the set-up."

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