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Oct
24

Offshore Trusts to Protect Your Assets?-Warning!!!

 

SECURING YOUR ASSETS IN OFFSHORE TRUSTS

Content provided by:  Ethan Conners-Senior Investigator

Having investigated white collar crime for more than 25 years in both the public and private sectors.  The one question it seems I am asked more than any other is, “how do I avoid loosing what I’ve worked so hard for”, or more simply how does one most effectively protect their financial well being?

Between 2009 and 2012,  an investigative study was conducted by the renowned advocacy/private intelligence organization Global Advocates (globaladvocates.ch).  This organization specializes in due diligence, the investigation of financial fraud and white collar criminal activity. The research team conducting the study was comprised mostly of former criminal investigators who were assigned the task of preforming due diligence on offshore Trust provider companies at the bequest of one of the most prominent international logistics corporations.

The results of this study is the primary inspiration for this article. The purpose is to inform, educate and offer guidance in order to help those who may desire to establish formal financial structures to make informed decisions and navigate the often murky waters surrounding asset protection through international/offshore trust structures, and avoiding crucial mistakes in that process.

Most of us have financial skin in the game of life. However, if you are one of the fortunate few who has been able to acquire above average wealth, then you likely know that you run a much greater risk of becoming “financial target”.  There are individuals and entities that lay in wait for an opportunity to take any and all of what you may have worked so hard for.

Then there’s is always the inevitable for all of us stricken with the human condition, death.  Many estates are torn asunder by greedy family members, our respective governments and lawyers upon our final demise due to lack of proper planning.

Let us not forget the intrusive and often unfair public obligations brought on by our most “well intentioned” governmental tax authorities.

For those who wish to take a proactive approach there are sophisticated legal mechanisms available to shield those who plan accordingly.

Unfortunately, in our current day society it has become acceptable practice to seek what is commonly referred to as “litigious opportunity”. It seems the world is littered with professional vultures circling, just waiting for the opportunity to strike and take what one might have, whether that be in a dissolution action, as more than 50% of all marital unions end in divorce, or other legal actions, you are at risk.

A great number of these potential adversaries come cleverly cloaked as honorable “officers of the courts”, attorneys, lawyers and barristers who make their living off the anguish and misfortune of others, “fee pigs“, as one fellow legal colleague put it.  Now we must acknowledge, that not all of the members of the ‘honored’ vocation are frivolous financial pirates, but enough of them are to have severely warped the once “Just” legal system and given the profession a bad reputation.

One recent study indicated that each of us stand a one in three chance of becoming entangled in a legal battle that could potentially destroy our “financial house”.  As a result of this trending litigious environment within the world we live, one must consider preventative measures, and if you happen to be someone of significant financial status your chances of coming under attack increase exponentially.

Therefore, You MUST take precautions to protect yourself and the legacy of your family.

Perhaps one of the most highly recommended methods to insure that you and your family’s livelihood is protected from adversaries, both pubic and private is that of an offshore trust structure.

Keep in mind however, “not all that glitters is gold.” In fact the Trust company with whom you consult, is just as important as the actual structure itself.  Don’t be fooled by glossy brochures and upscale furnishings.  Not all Trust structures are created equal either.  One must work with a Trust consultant/advisor who is based in moral principle having your best interest at hear, not fee driven and that is properly schooled in asset protection trust structures.

The genesis of the study to which I refer was a Trust client seeking to migrate substantial  Trust holdings from one Trustee company, who had acted contrary to their fiduciary responsibilities, to one of integrity.

As a result, dozens of companies were evaluated during the course of the three year study in jurisdictions ranging from Europe and Asia, to Central America and the Caribbean.  What was uncovered by all accounts was nothing short of startling.  Incidents were revealed in which well known trust companies who manage Millions and in one case Billions in assets had documented incidents of conducting themselves in a manner that was dishonest, incompetent and at times acting with deliberate malicious intent. In fact in some cases the conduct of these companies ended up literally costing the client(s) millions of dollars in losses, not to mention legal fees.

The findings in theses cases were evidenced by way of witness affidavits, official court records and supporting documentation relevant to the specific case. A vast amount of evidence was obtained directly from the former Trust clients that had themselves suffered at the hands of these incompetent and dishonest trustees.  The study revealed numerous instances where prominent highly respected Trust companies had acted in a manner that was not only inefficient, incompetent and adverse, but went so far as to deliberately violate client confidentiality for their own benefit and defense when a claims were raised in response to their questionable conduct.

Within the case study three specific incidents were selected to be closely examined based on the severity of the damages to the client as it directly related to the actions and conduct of the associated Trustee company.  Due to ongoing actions I am not at liberty within this venue to disclose the identities of the offending companies.  But, what  I can state are the international jurisdictions in which these companies are domiciled which were Gibraltar, Jersey-Channel Islands, and Switzerland to be specific.

It’s imperative to note that the three selected Trustee organizations are independent Trust companies and entirely unrelated to each other.

Further, the author MUST state that not all companies examined in these very prominent Offshore Trust jurisdictions were found to be of the same ilk.  In fact, there were numerous Trustee companies located within these countries that had no formal complaints or conflicts registered against them.

That being said, there were numerous cases where complaints had been lodged in varying jurisdictions outside the three mentioned herein. It seemed that no one jurisdiction was completely without tarnish.  However, I again reference these specific cases in the identified jurisdictions simply due to their severity, financial expense and legal burden inflicted upon the Trust client(s) involved, and the fact that each and every case noted could be substantiated by sworn evidence and official court filings.

It is vital that I make clear that the intent of this article is NOT to imply or assert that all or even most Trust companies conduct themselves in an unscrupulous manner, in fact quite to the contrary. It was the experience of most of the investigators that a vast majority of  international Trust companies do operate within standard range of ethical behavior.

The point of sharing the results and issues brought to light during this study is to encourage the reader whether they be current international Trust clients or individuals considering formation of a Trust structure, to do their own due diligence regarding placement of their assets in the hands of just anyone claiming to have their best interest at heart of their operations.

In the conclusion, based on the facts examined it is the authors opinion that a properly structured and administrated international Trust structure in most cases involving high net worth individuals and/or corporate entities are by far the best way to protect ones financial well being from potential threats public or private.

Note: {The author does not intend to make any specific recommendation toward any Trust operator or identify the companies referred to herein. Should one wish further information or would like direction to reputable offshore trust consultants and professionals please contact, [email protected].}

If you have been a victim of fraudulent scheme, anywhere in the world then it’s time to real justice and recover your losses, or should you be seeking additional information about this article and reliable international trust consultants please contact GRA for a FREE case analysis and recommendations  @   http://www.globaladvocates.ch/

Or call our U.S. Call Center @: 202.355.6756


 

 

Oct
24

OIL & Gas Investment Schemes

Oil & Gas Investment Schemes-Fraud

Contributed by: Lucas Trevant-Global Advocates

http://www.globaladvocates.ch

Securities regulators around the country warn that oil and gas investment schemes are alive and well. Rising oil prices have created a increased interest in investments in energy-related business ventures.

There certainly exist legitimate oil and gas investment opportunities, while involving varying degrees of financial risk. However, as in most any other investment opportunities, it is not unusual for illegitimate promoters to attempt to take advantage of investors by engaging in fraudulent practices.

Although some of these con artists have moved on to more lucrative venues since the end of  the oil boom in the mid-1980s, many continued to loiter on in the oil field. Now with the regular instability of oil prices, some of these snake oil salesmen have found their way back to these kinds of scams. When there is a highly publicized economic circumstance, which creates an possibility for money to be made legitimately, scam artists follow in the trending shadow to take advantage of the circumstances.


WHAT ARE OIL AND GAS INVESTMENTS?

Oil and gas investments come many forms, to include limited partnership interests, ownership of fractional undivided interests in leases, and general partnerships. Tax consequences and investor liability vary according to the type of product. Real general partnerships in which investors actively participate in the operations of the venture are not considered securities. A general partner, however, is personally liable for debts of the partnership.

In a drilling limited partnership, an oil or gas company may sell partnership units to investors and use the proceeds it raises to lease property and drill wells. In return for managing the project, the sponsor company generally takes an upfront fee that averages about 12-18% of a person’s investment (commonly referred to as tangible and intangible drilling costs) and also shares in a percentage of any revenue generated. In return, the promoter offers the investor the prospect of a substantial first year tax write-off and quarterly cash distributions from the sale of any oil and gas the partnership finds until the wells go dry.

Drilling partnerships have always been a wager, but recently, they have proven somewhat riskier than usual. This type of investment is very speculative, is a highly illiquid investment and can have a long holding period.


 

FRAUDULENT MARKETING TECHNIQUES

Fraudulent oil and gas deals are frequently structured with the limited partnership (or other legal business formation) in one state, the operation and physical presence of the field in a different state, and the offerings made to possible investors in states other than the initial two states. Thus there is less chance of an investor visiting a well site or a nonexistent company headquarters. Such a structure also makes it complicated for law enforcement officials in remote jurisdictions and victims to detect and expose the fraud.

While the majority of oil and gas investment opportunities offered may be legitimate, there have been many fraudulent ventures in recent years perpetrated by scam artists with no connection to a legitimate oil and gas company and with no track record of successful operations.

Even genuine oil and gas investments almost always bear a high degree of risk. Potential investors must realize the distinct possibility that they could lose the entire investment even in legitimate ventures.

 

RED FLAG WARNINGS

Sales pitches focused on highly publicized news. Scam artists read the headlines and will often use a highly publicized news item, like volatile gas prices, to lure potential investors and make their “opportunity” sound more legitimate.

“Can’t miss” wells. Every investment carries some degree of risk, so you should be skeptical of any oil and gas investment opportunity pitched as completely safe, with minimal risk.

Cold calls from someone you don’t know. Many fraudulent oil and gas offerings are conducted by unregistered persons who use general solicitation and high-pressure sales methods.

Unsolicited materials. Be especially careful if you receive unsolicited materials about an investment. Simply ignoring investment-related “junk” faxes, emails, voice-mail messages and regular mail may be your best strategy.

Limited opportunities. Scam artists often try to give you the impression that the “opportunity” they are promoting is scarce, hoping you will hand over your money hastily before doing any due diligence. This is an exclusive private deal open only to a special chosen few investors.

High rates of return. Compare promised yields with current returns on well-known stock indexes. Any investment opportunity that claims you’ll get substantially more could be highly risky

Tips or secrets. A promoter may discourage you from talking about the opportunity with someone you trust, like a loved one, attorney or financial professional.

The Salesman; has personally invested in the project.

The Promoter; has succeeded on every well drilled so far.

A Fantastic “discovery”; in an adjacent field or drilling property.

A large, well known oil company; is planning to operate in the area;


BOILER ROOMS & WEB/EMAIL PHISHING

In order to draw the interest of potential investors, unscrupulous promoters frequently use the Internet and “boiler room” offices with banks of phones staffed by salespeople with little to no experience in energy exploration, but plenty of background in high-pressure sales. Their methods include repeated unsolicited calls to possible investors, hyping the profitability of the bogus project. Some swindlers use glossy brochures and marketing materials. Also, beware of unsolicited oil and gas promotions on the internet and through “phishing” e-mails. State and Federal securities regulators caution potential investors to beware of the following claims in a typical high-pressure sales pitch, whether through unsolicited telephone calls or e-mail messages:


HOW TO AVOID BEING SCAMMED

Securities regulators counsel potential investors not to be afraid to ask the difficult questions when being solicited for any type of investments. People wanting to invest oil and gas are encouraged to consider oil exploration companies that are well known and listed on the Stock Exchange.

One can reduce the risk of being swindled if you resist pressures to make rushed, uninformed investment decisions. There are several steps you should seriously consider before parting with your hard earned money. Securities regulators have developed a checklist of five key areas to consider before investing.

1. The Registration Requirements. Ask if the offering is filed with the securities commission in your home state or the state where the promoters are located. If so, contact the state agency for any information it may have available. If the promoter indicates that the offering is exempt from registration requirements in a particular state in where offers and sales are made, inquire as to which of the exemptions is claimed and the terms of the exemption.

Contact the state securities agency to confirm that the offering is indeed exempt. If the promoter claims a security is not involved at all, find out why and contact the state securities agency and confirm whether it really is a security being offered.

2. The Salesperson. If it is a legitimate deal, the salesperson will not be reluctant to provide you answers questions or written explanations. Request the name of the salesman offering you the security, where he is calling from and his background, specifically in other oil or gas ventures. Ask what compensation the salesperson will receive.

Contact your state securities agency to inquire if the promoter or salesperson has been sanctioned for previous violations of securities laws.

3. The Company. Ask the names of the principals of the company or the general partners offering the security, their backgrounds and experience in the  energy industry, and how long they have been associated with the company. Find out the history of the company, its capitalization, assets and retained earnings. What contingent liabilities does it have from other ventures? Does it have sufficient funds to cover unexpected costs? Is the tax treatment of the investments, as claimed by the promoters, supported by the IRS?

Find out the entity’s or general partners’ history in drilling operations. In particular, ask how long it has been in the oil and gas business, the number of wells drilled, the number of wells completed as producing wells, and whether the company retained its interests in the wells it drilled. Determine if conflicts of interest involving the promoter are disclosed. All the above information should be contained in a prospectus or “offering documents” that the promoter must furnish investors before they hand over their funds.

4. The Investment. Make sure funds raised are kept in a separate escrow account until used and that they won’t be commingled with other moneys. Also, be certain the money will not be used for purposes other than what they are designated. Ask how much money is to be raised and the cost per fractional interest. Ask how much of the money will pay for advertising, salaries, sales commissions and any estimated profit to the company. Ask what type of conveyance document will be provided after any investment is made.

Assuming the well is completed, ask what the completion costs will be for each investor, including bonus commissions to be paid (the purpose and amount), and whether investors may be obligated to pay in more money in the future. Ask what tax incentive might be available if a dry-hole is encountered and for intangible drilling costs. Finally, evaluate the risk involved in making the investment. Is the well to be drilled a wildcat (drilled in territory not known to be productive) or is the drilling to be done in an area of proven oil reserves?

5. The Lease. Secure a legal description of the property on which the project is to be drilled. How and when was it acquired? Is the principal selling the lease to the venture at the acquisition cost, and if not, how much profit is being made? Ask for a description of surrounding property, including local well completions and a geologist reports on the area. You will want to know if the lease is already in default and whether there is any overriding royalty or landowner’s royalty or other leasehold burden being paid.

Ask for a disclosure of the person(s) selling the lease, the cost of the lease and any relationship between the lessor and the operator. Secure a statement of the depth of the well to be drilled and an indication of when drilling is to begin. Insist on seeing a copy of the operator’s contract with the promoter.


FURTHER QUESTIONS TO ASK BEFORE INVESTING

The checklist of questions to ask and information one should obtain is long and it will take time and perhaps you may spend more money for outside consultation before you feel comfortable risking your money in the venture. It is always prudent to seek the advice of a neutral expert before committing funds to any investment deal. Be sure to consider the following additional questions:

  • Who will be responsible for payment of taxes? Will they be paid out of the investor’s share?
  • What is the location of available pipelines, or what method will be used to ship and sell any product?
  • What is the name and address of the operator? What is her/his experience with ventures of this type? What are the terms of the agreement with the operator, including the compensation terms?
  • How will the decision be made for completing the well or abandoning it? Who will make that decision? What is to become of funds received from the salvage value of equipment on the lease?

WHERE TO TURN FOR HELP

The securities administration in your state is responsible for informing and protection of investors. If you have questions about an investment, contact your securities commission. You can locate your securities commission by visiting;

http://www.nasaa.org/about-us/contact-us/contact-your-regulator/

It is always a good idea to contact your securities commission before you invest.

If you have been a victim of fraudulent scheme, anywhere in the world then it’s time to real justice and recover your losses.

 FREE case analysis contact [email protected] www.globaladvocates.ch

Or call our U.S. Call Center @: 202.355.6756

Oct
24

Anatomy of a “Ponzi” Scheme

Anatomy of a “Ponzi” Scheme:

Contributed by: Lucas Trevant-Global Advocates

http://www.globaladvocates.ch

It seems most people are familiar with the phrase “Ponzi Scheme” especially after 2008 when Bernard Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, were charged by the SEC with securities fraud for a multi-billion dollar Ponzi scheme perpetuated on his firm’s clients for many years.

In Madoff’s case he appeared to be a successful securities investor.  He had been a prominent member of the securities industry throughout his career.  He served as vice-chairman of the NASD, he was a member of its board of governors, and chairman of the New York region.  He was also a member of the NASDAQ Stock Market’s board of governors and it executive committee and served as chairman of its trading commission.   Over a period of 48 years he established a significant reputation in securities trading and his clients trusted him.

What is a Ponzi scheme?     

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.  Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk.  In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Why do Ponzi schemes collapse?

        With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue.  Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.

How did Ponzi schemes get their name?

        The schemes are named after Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s.  At a time when the annual interest rate for bank accounts was five percent, Ponzi promised investors that he could provide a 50% return in just 90 days.  Ponzi initially brought and traded a small number of international mail coupons in support of his scheme, but quickly switched to using incoming to pay off earlier investors.

What are some Ponzi scheme “red flags”?

Many Ponzi schemes share common characteristics.  Look for these warning signs:

  • High investment returns with or no risk.  Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk.  Be highly suspicious of any “guaranteed” investment opportunity.
  • Overly consistent returns.  Investments tend to go up and down over time, especially those seeking high returns. Be suspect of an investment that continues to generate regular positive returns regardless of overall market conditions.
  • Unregistered investments.  Ponzi schemes typically involve investments that have not been registered with the SEC or with state regulators.  Registration is important because it provides investors with access to key information about the company’s management, products, services and finances.
  • Unlicensed sellers.  Federal and state securities laws require investment professionals and their firms to be licensed or registered.  Most Ponzi schemes involve unlicensed individuals or unregistered firms.
  • Secretive and/or complex strategies.  Avoiding investments you do not understand or for which you cannot get complete information is a good rule of thumb.
  • Issues with paperwork.  Ignore excuses regarding why you can’t review information about an investment in writing, and always read an investment’s prospectus or disclosure statement carefully before you invest. Also, account statement errors may be a sign that funds are not being invested as promised.
  • Difficulty receiving payments.  Be suspicious if you don’t receive a payment or have difficulty cashing out your investment.  Keep in mind that Ponzi scheme promoters sometimes encourage participants to “roll over” promised payments by offering even higher investment returns.

What steps can I take to avoid Ponzi schemes and other investment frauds?

        Whether you’re a first-time investor or have been investing for many years, there are some basic questions you should always as before you commit your hard-earned money to an investment. The SEC sees too many investors who might have avoided trouble and losses if they had asked question from the start and verified the answers with information from independent sources.

When you consider your next investment opportunity, start with these five questions:

  • Is the seller licensed?
  • Is the investment registered?
  • How do the risks compare with potential rewards?
  • Do I understand the investment?
  • Where can I turn for help?

For more information, we suggest you read;  

http://www.sec.gov/investor/pubs/fivequestions.htm

If you have been a victim of fraudulent scheme, anywhere in the world then it’s time to real justice and recover your losses.

 FREE case analysis contact [email protected]    http://www.globaladvocates.ch

Or call our U.S. Call Center @: 202-355-6756