The ease of setting up offshore trusts and companies is at the root pension and investment scams plaguing British retirement savers and expats, according to experts working for regulators.
Dalraida Trustees, which helps The Pensions Regulator in the UK track down missing pension cash says offshore funds veiled in secrecy are involved in every scam under investigation.
Dalraida confirms The Panama Papers scandal has shone a light on how simply scammers can set up offshore entities to receive money and then quickly move and hide the cash in another secret account.
Sean Browes, senior trustee representative at Dalriada Trustees, said: “This has been a factor of every investigation that the regulator has asked us to help in.
“Fraudsters try to persuade people to hand over their pension funds or cash on the promise of fantastic investment returns. Then they shift the money into offshore trusts and companies in places where we cannot find out information about the people involved.
Crooks move money overseas
“Once the money is moved to one of these offshore financial centres, tracing the funds is difficult.”
Browes explained that one investment con involved a bond offered by an insurance provider in Liechtenstein.
The bond was a wrap for investments held in Mauritius, which has a financial secrecy code and trying to follow the money to uncover who the crooks were was almost impossible.
“Pension liberation has stopped a lot of pension scams because people can now freely access their retirement savings,” said Browse. “Instead, scammers are concentrating on stealing the money when someone wants to reinvest their pension.
“A lot of this money goes into overseas investments held in questionable jurisdictions”
Browse also welcomed the Panama Papers investigations by newspapers as public opinion against tax havens is likely to force governments and regulators to tighten up tax rules and prevent tax avoidance.
The Pensions Regulator has launched a new campaign aimed at raising awareness of pensions scams among older investors.
“We have noted the change in the way scammers are operating and have relaunched our campaign to address the issues,” said a spokesman for the regulator.