independent

Thursday 17 April 2014

How offshore trusts are being set up by stressed borrowers

UNDER-pressure borrowers are using off-shore trusts and companies in countries such as Russia, Mauritius, Gibraltar and the Cayman Islands to put assets beyond the reach of Irish banks.

A leading global fraud network has heard that cross-border asset transfers are on the rise here and throughout Europe as borrowers turn to sophisticated financial instruments to protect their assets and move them beyond the reach of creditors.

The latest trends were revealed last Friday at a conference on fraud and asset recovery hosted by FraudNet, the international legal group that helps victims and governments locate and recover stolen assets.

The conference was held days ahead of a Supreme Court appeal move by Sean Quinn Jnr, who is challenging a finding of contempt against him and a three-month jail sentence for breaking court orders preventing any interference with the Quinn family's €500m international property group (IPG).

The global scheme by Sean Quinn Snr, his son Sean Quinn Jnr and nephew Peter Darragh Quinn to place assets beyond the reach of the former Anglo Irish Bank, is the largest asset-stripping scheme to come before the Irish courts.

Recovery

Joseph Wielebinski, executive director of FraudNet, which is part of the Commercial Crime Services division of the International Chamber of Commerce (ICC), said greater co-operation is needed between countries to combat rapidly developing financial frauds and schemes to move assets offshore.

"There is a growing problem with large-scale asset recovery cases," Mr Wielebinski said, adding that timely access to company and bank records is critical in the fight against financial crime.

Forensic accountant Paul Jacobs, a partner in Grant Thornton who addressed the FraudNet conference, said that "the fight is on" to locate the assets of companies and borrowers who signed personal guarantees.

"There is an increased pressure on borrowers and that may prompt some to commit fraud and try to hide their assets, however, not all transfers are themselves fraudulent."

FraudNet works with individuals, companies and governments to help recover stolen millions.

Its Irish member is Gregory Glynn, a partner at Dublin law firm Arthur Cox.

Recent FraudNet investigations include the Allen Stanford fraud in the US and work on behalf of the Tunisian government following the Arab Spring to try and locate and freeze the funds of former president Ben Ali and his family.

Irish Independent

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