The New Era of Regulatory Enforcement: A Comprehensive Guide for Raising the Bar to Manage Risk

Chapter 9

Offshore Tax Evasion

Laurence Birnbaum-Sarcy

It has been a common practice for many years for certain wealthy individuals to transfer assets to offshore entities and deposit funds with offshore financial institutions that provided protection under their jurisdictions’ bank secrecy laws. In 2012, it was estimated that more than $21 trillion in worldwide assets were held in offshore bank secrecy jurisdictions.¹ While there are many legitimate reasons for individuals to have foreign accounts, some individuals have used their accounts to hide their assets and avoid paying taxes.² Others did it to conceal funds derived from criminal activity. As a result, the United States has been losing billions of dollars in tax revenue a year, as ...