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Broken Banking

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Inside the Shell: Drugs, Arms and Tax Scams

May 27th 2013

Indian Currency

On December 11, 2009, a former Soviet air force transport plane flying from North Korea to Iran stopped to refuel in Bangkok. The flight listed its cargo as spare parts for oil-drilling equipment. Instead police found 30 tonnes of explosives, rocket-propelled grenades and components for surface-to-air missiles, all being transported in breach of United Nations sanctions.

Three months later in a Miami courtroom, the U.S. Department of Justice revealed the country's largest money-laundering scheme involving billions of dollars from Mexican drug lords. Then, last April, documents emerged in London concerning Russia's largest tax fraud, an alleged $230 million heist that led to the untimely deaths of four people and threatens to damage the Russian government.

The story behind the three events is many degrees stranger than fiction, but it includes one common element – a number of shell companies associated with 68-year-old Queensland businessman Geoffrey Taylor or members of his family. Shell companies – that is, corporations with no apparent operations, no apparent employees and no apparent physical assets – are used by those who register them for a range of nefarious activities around the world.

Thanks to loose laws of incorporation in many jurisdictions, it's easy for offenders to remain anonymous. And the entities can often be formed in less than 24 hours using online facilities. It is not just criminals that take advantage. The Tax Justice Network, an international group of individuals opposed to tax havens, estimates that about $11.5 trillion worth of assets are held offshore and are therefore beyond the reach of effective policing. It claims this represents about a third of total global wealth.

Within this context, Taylor has led an astonishing double life. Publicly, he has served as a company director and chairman of sharemarket-listed companies both in Australia and in New Zealand. Privately, his shell company structures are used by those behind them in a vast and covert game of hide-and-seek, through his clients' incorporation of thousands of entities, some of which later became involved in the international movement of oil, guns and money. And, perhaps most extraordinarily, he seems to have done it without breaching the law.

Taylor states he is now retired; he did not respond to repeated attempts for comment for this article. But he continues to go by several aliases and titles - Professor Geoffrey Taylor, Sir Geoffrey Taylor, Lord Stubbington and as high representative to Vanuatu. In the photo on his personal website his hands remain busy, projecting the cerebral intensity of a dinner-suited trusted elder. It is only by reading on that you get an inkling of his oddball self-confidence. ''Geoff Taylor is well respected as an innovator … He is not afraid of you viewing his personal website, because he has much to be proud of.''

Taylor writes, in the third person, of how in his native Britain he attended grammar school and achieved top-of-the class status, ''which was an indication of things to come.'' He tells of his migration to New Zealand in 1964 and how he studied part-time to gain two degrees and a PhD.

Gerard Ryle writes for the International Consortium of Investigative Journalists, from whee this article is reprinted.


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