In the 21st century the global economy has suffered a major economic crisis greatly affected by the misuse of offshore banks. How does offshore accounts and all of its components work? Offshore accounts many times bring subjects such as tax haven, laundering of money and off record assets. Individuals that have offshore accounts control accounts through a credit card that has a unique and individual number and secret code. This system helps all of these banks provide financial secrecy which is that only you and your banker would legally be allowed to know the financial activity within your account. The financial secrecy, completely different from financial privacy, includes many regulations to maintain this asset of secrecy for example many banks use codes that are implemented during communication that in absence of this code it means that a governmental agency is in an investigation process of this account.
Why all this secrecy? Well, the shocking amount of hidden money in in type of accounts is thought to be no less than $21 trillion. Much of this money is acquire through assets that raise their value and to even farther benefit avoid taxes in what is called tax havens. According to Leona Helmsley, a female that ran a chain of luxurious hotels and famous for once saying and quote “only the little people pay tax”. What do the predominantly wealthy people do to avoid taxes? Owners of offshore accounts found a different path that allowed them to keep their money, the idea of tax havens which is known to be promoted by those experts whose expertise are off the charts but nonetheless are still experts at using the flexibility of the system to their advantages. Offshore banking is a two-sided game in which white collar criminal camou...
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...those wealthy people that have offshore accounts with the sole purpose of avoiding taxes, laundering money or keeping money offshore are also responsible and also breaking the law. Nigeria is one of the principal suppliers of oil to the United States, the most populous country in Africa is yet homed the biggest single thief in the world in the 1990s who was almost certainly the late military dictator Sani Abacha, with $12 to $16 billion passing out of Nigeria in corrupt and tax-evading money during his murderous five year regime, most of this to the personal accounts of Abacha and his immediate family members. Offshore banking attracts criminals and opportunist but that does not mean that it is bad in nature, the purpose of offshore banking could be very valuable for the common men but sadly white collar criminals are the ones that are use and misuse this privilege.
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
The US has a sophisticated banking system that does a good job of allocating resources in productive place for their customers. However, in an area such as investment banking companies can use the deposited money for risky investments such as foreign government and corporate bonds. When these banks lose money on their investments or go out of business, all of the customer 's savings would be gone. Also, in this type of system bankers are more likely to commit fraud such as opening fake accounts vis a vis Wells
In recent news, the leak of The Panama Papers revealed several heads of state and corporations are taking part in illegal tax evasion.
oil in Nigeria. Nigeria’s large supply of high quality crude oil helped Shell climb to the top,
The indictment says the purpose of the conspiracy was to “… unlawfully obtain money through unauthorized transfers of funds from bank accounts and brokerage accounts.” To do that, the Nigerian men allegedly impersonated actual account holders in emails exchanged with banking and financial services personnel. In those email conversations, the indictment says the suspects “… harvested details about the target accounts, including account balances, and obtained wire transfer instructions.” With those details, the suspects were then able to initiate a wire transfer without the account holder’s knowledge or
#1: There's a secret banking system even more profitable than hedge funds that only the rich have access to, but if you know the right people and pool your assets, you can make massive amounts of cash.
...benefit economically from their activities on these markets. Countries with offshore centers that specialize in money-laundering reap significant benefits. Unlike the negative effects of the Mafia and organized crime, the positive effects are direct and quickly noticeable (Van Dijk 56). Even though it may seem like the revenue from all of the illegal activities helps the economy, it actually does not. There are profits but it does all lead back to negativity: corruption, lesser rule of law, risk of business, etc. The economy is actually slowed down and weakened rather than strengthened (Van Dijk 52).
During the past year Wells Fargo, a well-recognized bank of the United States, has been trying to clean its name and the mess it got itself into, when it was brought to the public that the bank was involved in generating fraudulent checking and savings accounts for its clients without their knowledge or their authorization. “The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent”
As globalization continues to flourish and evolve, this creates further opportunities in which individuals are able to launder money with greater ease, efficiency in profit and sophistication. Through the forms of economic globalization, people may use new forms of travel to their advantage and personal gain. It is widely recognized (Pfaller, A & Lerch, M 2005, Auernheimer, L 2003) that this is becoming a significant challenge in the international sphere. Through globalization, criminals are able to create new means to commit crime for an economic benefit and avoid prosecution through new forms of travel. This allows them to spread transactions across multiple nations around the globe, thus increasing the number of obstacles that need to be overcome for an investigation to be completed (Karofi, U, Mwanza, J). For example, this can be explained through the new forms of money laundering. Money laundering is ‘the process by which one conceals the existence, illegal source, or illegal application of income, and disguises that income to make it appear legitimate’ (President’s Commission on Organised Crime 1984, p. 7). This can be achieved through the process of transporting diamonds or gold or even through wire transfers (Morris-Cotterill, N). The lack of risk that is involved in these contemporary crimes is increasing the appeal for crimes such money laundering to occur. This is due to the fact that criminals know that it will prove to be difficult to investigate and prosecute their activities when it occurs on a transnational basis. This, in turn, gives more individuals the opportunity to commit these crimes with little risk that they will be caught. Furthermore, this targets potential naïve victims into partaking in these forms of c...
1.0 INTRODUCTION The tax system in Australia is one of the most complex in the world and consists of about 125 number of taxes1 which due to its complexity, it contains many loopholes which are often taken advantage of aggressively. Tax avoidance refers to the use of loopholes in the tax system and using financial instruments and mechanisms inappropriately so as to get a tax advantage. Despite being legal, manipulating the law so as to avoid tax is unethical and the Australian government is doing their best so as to remove those loopholes. This essay is going to discuss about multinationals avoiding paying their fair share of tax, taxpayers tax avoidance and measures against tax avoidance. 2.0 BODY At a time where tax is having a real impact
Money laundering is not a single act but is more a complex operation that is completed in three basic steps. The first step is placement, the second step is layering, and the third step is integration.
The bank failure in Jamaica illustrates how negative mindsets and behaviors can devastate the financial system and disrupt economic growth. The primary role of any bank is to safeguard its customer’s money, offer interest rate on deposits, lend money to creditworthy individuals, and make sound investment decisions to maximize shareholder value. Because of rapid economic growth between the late 1980s and early 1990s in Jamaica, the Central National Bank (CNB) and Worker’s Savings and Loans Bank (WSLB) loosened their monetary policies, provided preferential interest rates and extended credit beyond what was reasonable to members of its own board of directors, managing directors, and officers of the bank. These actions posed significant risks to the bank and its future.
Chinua Achebe is one of the established author in Nigeria and all over the world at large. In this book, Achebe shows us how corruption has shaped the lives and behaviour of the Nigerian society from colonial era to present independence.
As Nigeria celebrates 100 years of unification between their northern and southern halves, they stand poised to assume a leadership role among African countries. With over 250 different ethnic groups comprising its citizenry, even a nation as successfully diverse as Nigeria can expect to encounter some roadblocks to establish and maintain stability. The biggest threats facing Nigeria today are systemic corruption, terrorist violence, and social/human rights.
The Traditional Theory of Banking In this paper author review the traditional theory of banking and attempt to examine the theoretical reasons for why banks exist. As a financial intermediation, the natures of the banks are to provide financial services and conduct the intermediary functions in the whole financial system by accepting deposits and making loans. The question raised here are how they conduct these roles and why the borrowers and lenders do not come together without the banks for the saving of intermediation costs, why both of the two parties are ready to pay for their services and what’s the value added by the banks? The paper proceeds as follows. Section 2 offers a traditional view of banks and describes the nature of them.