Mad Cricketing Sugar Daddy, Allen Stanford has been found and civil papers have been served on him. And like when anyone is alleged to be involved in fraud, everyone associated even slightly with that person automatically becomes guilty until proven innocent.

Of course sensationalism in journalism reigns supreme, head this effort by
Mitchell Hall. This I assume is the same Mitchell Hall who dates shock frock Lucie Boshier. At least what Lucie writes has to be sensationalism by the very nature of the topics she traverses. Hall should do more research and speak to people who have knowledge in the areas he is writing about, for he sure does not. If journalists seethe at bloggers who can't write and misrepresent issues, professional people seethe at journos who don't get their facts right when they parrot out nonsense. So lets have a looksie at what is going on here.
New Zealand has what is called a
New Zealand foreign trust regime. It is enshrined in law and legitimate with the IRD AND all DTA countries that have agreements with New Zealand. In other words - they know what is going on and it is all legal. On the IRD
website they even tell you how to set one up.
Most practitioners in New Zealand who are connected to the offshore industry offer services to set them up. Plenty work in Latin America and the Caribbean where Stanford promoted his business. All New Zealand foreign trusts now have to be disclosed with the IRD by the firm or person with administers the trust. That person or firm in general has to have a New Zealand residence connection and be qualified in the area of trusts, accounting or law. Like all jurisdictions that offer these services, an operating office has to be situated in that jurisdiction. Hall claims that the New Zealand company arm is an advisory business. I doubt very much that it is anything other than providing this agency type of service.
Stanford Trust Company appears to be an advisory business.
Any advisory will only be for New Zealand Company and Foreign trust services. It will
not be investment advisory services or anything remotely connected with what Stanford is alleged to have done. Most trust deeds actually separate the fiduciary (trustee) and advisory (brokers and investment analysts) arm of managing the trust assets.
New Zealand tax residents ARE NOT settlors of New Zealand foreign trusts. The settlor/s(who puts the assets into trust) are foreigners. The trust will not pay any tax in New Zealand unless there is New Zealand sourced income. The beneficiaries in the trust will not pay any tax in New Zealand unless they are New Zealand tax resident OR if foreigners, there is New Zealand sourced income.
The foreign trusts are used in conjunction with double tax agreements and their articles negotiated by Government or on their own as legitimate structuring tools. For foreigners. Not New Zealanders.
Stanford Trust Company in New Zealand would have set up these foreign trusts for clients based on referrals from the Group.
Hall describes it:
"As part of its elaborate structure, The Stanford Group Company, under its wealth management operations, directed clients to the Stanford Trust Company, which has subsidiary offices in New Zealand and Columbia".Nonsense. There is nothing elaborate about what is going on here. And there is no subsidiary in New Zealand.
The actual website in the footnotes states that:
"The Stamford Financial Group is not a legal entity but a registered trademark that encompasses the global network of independent, affiliated, privately held and wholly owned entities".Which clearly states the independence of the New Zealand company to that of the other affiliated members. Not as Hall headlines in describing the New Zealand trust company:
The fate of a local subsidiary of the Stanford Group Company.......
Wrong again.
A subsidiary in New Zealand is defined at section 5 of the Companies Act
Meaning of holding company and subsidiary
(1) For the purposes of this Act, a company is a subsidiary of another company if, but only if,—
(2) For the purposes of this Act, a company is another company's holding company, if, but only if, that other company is its subsidiary.
(3) In this section and sections 7 and 8 of this Act, the expression company includes a body corporate.
If Hall graduated from google searching other people's incorrect work and did some quick research and stripped back the layers of ownership and control he would find that the registered individual shareholder behind the New Zealand company structure is in fact not Allen Stanford or any foreign owned Stanford named entity but the New Zealand lawyer who is operating the entity, as he owns New Zealand Trust Nominees Limited that in turn owns the shares in Stanford Trust Company Limited and Stanford Trust Company (New Zealand) Limited. The New Zealand lawyer is sole director of all the New Zealand entities. This is a very simple and transparent ownership structure that any graduate business journalist should comprehend and search for in two minutes on the Companies Office website.
It is not unusual in the offshore industry for companies to not have full service offices in each jurisdiction but a name plate set up with a local agent who does other similar work. It is perfectly legitimate and the New Zealand lawyer involved here looks like all he is doing is managing a cubicle style arrangement under his other activities in the name of Stanford. Firms do this so it impresses potential clients that they have a worldwide network of offices that the clients can be serviced by, New Zealand is one arm of this network. The New Zealand lawyer owns and controls the entities and would be remunerated for his services based on what referrals he gets from the independent offices in the Group referring work to him. He will have a referral style agreement with other independent owners in this group and most likely with a special clause that states there is no partnership or subsidiary relationship. He will also have a huge confidentiality clause which will stop him from speaking out now to defend himself and his activities in any case.
Like many, I will be fascinated to see if there is any legitimacy behind the claims of the SEC and if "fraud" actually has been committed by Stanford. Or if there are any links to Bernard Madoff and his ponzi scheme.
But of course it's far more sensational to use the words "offshore", "fraud" and name drop the billionaire all over the media without understanding precisely what is going on.
This article by Hall is so blatantly sensationalistic - and factually just incorrect the NBR will be lucky they don't get served papers.
I shall put NZ mainstream media (and pinko bloggers) on notice right now I will serve it up all over their dumb
"arse bubbles" on this blog if they misrepresent especially the words "money laundering", "fraud", "havens" and "hiding money in secret bank accounts" in their offshore industry reporting based on the financial crisis fallout.
February 25th, 2009 at 4:26 pm
No Nats again. Shouldn’t be that hard to front up during the honeymoon.