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The fact that indicted Trumpgate defendant Paul Manafort employed two St Vincent & the Grenadines companies in his financial transactions could focus increased law enforcement attention upon Caribbean offshore financial centers, as well as unwanted negative publicity upon the "services" that those jurisdictions offer. Manafort formed shell companies in a number of tax havens, to conceal income from the US taxman, and to allegedly launder millions of dollars.
Additionally, his travel has come under scrutiny, as Manafort reportedly held three valid US passports, and engaged in extensive foreign travel to jurisdictions known to be abused by wealthy Americans for tax crimes, including the Cayman Islands, a favorite of affluent evaders. As additional Trumpgate defendants are indicted, we may see more Caribbean corporations, and if so, expect to see increases in Country Risk assigned to Caribbean jurisdictions that sold those shell (or shelf) companies to officials in the Trump election campaign, due to the Russian connections, as well as points of origin of the funds.
The intense amount of media attention, surrounding every aspect of the Trumpgate investigation, reminds compliance officers that the use of ANY Caribbean tax haven companies, by bank clients, should trigger enhanced due diligence investigations. If you are old enough to remember Watergate, you may recall the negative publicity that Republic National Bank of Miami suffered when it was revealed that the Watergate burglars, Miami residents with CIA backgrounds, had their attorneys fees paid, via Mexico, through that bank.
I would wager that the bankers of known Trumpgate targets are now looking closely at their clients' foreign transactions, and that even a hint of a Caribbean shell corporation will set off alarms, and immediate calls to bank counsel for advice.
Chronicles of Monte Friesner - Senior Financial Crime Analyst
Contributed by Kenneth Rijock - Financial Crime Consultant
