This New York Times story is supposed to be about the use of offshore trusts and other exotic structures to shelter assets from tax collectors, lawsuit plaintiffs, etc. A woman discovers her husband cheating (“[husband] Oesterlund’s money and his boat attracted hangers-on and women, [wife] Pursglove says”) and he sues her for divorce in Canada while she sues him for divorce in Florida (see this chapter for more on venue litigation in divorce cases). It wasn’t obvious where one spouse should have sued the other:
For Pursglove and her husband, as for many members of the global 1 percent, “residency” was an elusive and easily manipulated concept. Pursglove was a British citizen with a United States green card who now lived in Boca Raton. Oesterlund was a citizen of Finland who had also obtained a passport from Dominica. They had homes in at least four countries and spent a year living on their yacht. “These parties are global citizens of substantial means,” Judge Gillen mused from the bench. “Their situation is a blessing and a privilege for them, but for this court, their lifestyle creates a challenge.”
Before the divorce litigation, the business-owning couple had been moving profits offshore, including into Cook Islands trusts:
trusts organized in the Cook Islands, a self-governing state associated with New Zealand, are particularly difficult to investigate. Cook courts typically do not recognize American court orders, including divorce judgments. To sue a Cook trust, you have to actually fly to the Cook Islands, in the middle of the South Pacific, roughly 6,000 miles southwest of Florida. “It’s like Switzerland used to be, but squared,” Fisher told me. Once assets were hidden inside a Cook trust, he had learned, it was almost impossible to get them out.
The wife “was now receiving alimony and child support” but needed to have her lawyers unwind these offshore structures to get ready access to the $400 million. How much were the professionals getting?
[the wife’s lawyers] Fisher and Potter estimated that Oesterlund was burning through about a million dollars a month, much of it going to pay the lawyers and accountants keeping his maze of trusts and shell companies in working order.
When I spoke with Fisher by phone in February, he sounded confident. Oesterlund appeared to be running out of cash, Fisher told me; he was missing payments on the loan from C1 Bank.
In other words, the article can also be summarized as “A couple had $400 million and, by the time a divorce court could allocate the joint assets, the lawyers had obtained most of them.”
“Appeared to be running out of cash” sounds like he could still be hiding it. Maybe he still has hundreds of millions.
Did their low-rent scammy businesses really throw off that kind of cash? It’s hard to believe. I get the feeling they were laundering drug money or something and this woman was fully in on it.
His wife was at maybe a 6/10, and his mistress a best a drunken 7/10. With $400M he could have done waaay better.
I wonder at what time in the future can your average John Doe be able to afford such tax and divorce shelters? I don’t see why this can’t be handled by software. I can open bank accounts now without meeting anyone in person. I can even open a gold bank account too. Would be nice to have a TurboTax-like service for setting up shell companies and trusts. I see a business opportunity here…
Lawyers get pretty much everything the government requires us to feed the healthcare industry, too.
Xacti Corp with 10-50 employees selling email spamming software:
“Our products and services enable our clients to maximize their online marketing and advertising quickly, safely and easily. Our business solutions focus on generating traffic, creating effective methods of monetization and delivering the highest ROI for our business clients.
Some of our business solutions include smart efficient email marketing services, synchronization and storage capabilities, marketing platforms, and free products to assist our business clients in offering web-based protections to their customers”
Like bobbybobbob said, maybe something else was going on there.
In addition to Xacti he had scammy websites where you would get something free but had to pay for shipping. You would give them your credit card # and then they would subscribe you to some movie of the month club or something like that and keep charging your card forever.
http://myfloridalegal.com/webfiles.nsf/WF/MMFD-9BXPPD/$file/smart+savings+settlement.pdf
There are “legitimate” businesses that operate or come close to operating on that model. I just bought a car that came with a free trial of an “OnStar” like system and in order to sign up I had to give them a credit card, which they will use (unless I opt out) to keep charging me for the service when the trial runs out.
Never give your real credit card # to (almost) any website unless it is something highly trusted like Amazon that you intend to use over and over. If it just for “shipping charges” then give the # of a prepaid visa card that has $50 on it and if it is for a larger amount, many credit cards will allow you to generate a “virtual credit card #” that has limits on amount and time.
Classic Ultimatum game: I have X and offer you Y. If you accept, I will have X-Y and you will have Y. Otherwise we both will have 0. They chose to have 0.