The week before last, I went to Austria to detox in the Alps. When I arrived at the airport, I was greeted by a young man with a sign, ‘Garnham’. I shook his hand, gave him my suitcase and followed him to his waiting car. ‘Welcome to Austria’ he said, putting my suitcase in the boot. He looked pleasant enough, we drove out of Salzburg, I scarcely noticed in which direction.
I like to think I am not wealthy enough to be of interest to kidnappers, but if I were, would I have got into his car, without proof of his bona fides and letter of engagement with the hotel? Given the number of people kidnapped in this fashion, maybe we should all be a little more vigilant?
Another crude ‘trick’ of criminals is to track diners as they leave an exclusive club or restaurant and then attack them, when they get home. Bernie Ecclestone, was tracked leaving Harry’s bar with Slavica, his wife. On arriving at his home in Chelsea, he was attacked by two trained boxers, who beat him into a pulp before making off with Slavica’s £300,000 ring. No doubt Bernie had CCTV surveillance cameras, but were they sufficiently up to date to track the attackers’ mobile phones?
Another common approach, of which we all need to be wary and is favoured by some police in certain S American countries is to watch an ATM machine, and when someone is leaving demand they take out more money for their attackers at gun point.
These extortion methods are crude, because the criminals rarely have enough information to make their demands specific and to accurately pinpoint their target. However, technology is so sophisticated that with the right input, a criminal can spot his target in a crowded room, in a stadium or underground wearing special glasses. A wealthy target can now be kidnapped literally anywhere, tracked from a distance and threatened remotely.
As from this month, information collated by financial institutions on accounts of non-residents is to be exchanged with the country in which that person is living. All criminals, now need to do, is to intercept the exchange of this information, identify the most vulnerable beneficiary and if they fail to pay, their threats become real; exposure in the press, attack, kidnap or worse. We have seen from the leaks of financial data from Liechtenstein Bank and Mossack Fonseca that the press will pay handsomely for such information, even if the victim will not.
All wealthy families should now, not only ensure they have the most up to date surveillance equipment, but if they have monies offshore they have the most up to date and sophisticated structure to own their wealth with only the best possible people, in control. In my book, ‘When you are Super Rich who can you Trust?’ I estimate that in excess of 90% of structures are vulnerable to attack in some way or another and will crumble if threatened!
And attacks should be anticipated, not only from criminals. Tax authorities have been given to believe there is $9,600 billion in offshore trusts which is untaxed. Although a country may not be able to tax the underlying trust assets in trust, as a matter of law, this will not stop many tax authorities looking for holes and weaknesses in these structures once they have all the information to hand to investigate and challenge.
Many structures were set up, before transparency was thought possible, or by advisers who have not moved with the times. It is these trust structures which are vulnerable. Even if no tax is found to be due, any taxpayer who has been investigated will get a black mark.
You may think you care little whether you get a black mark, but for many who have been investigated it is an experience which they never want to go through again. Furthermore, it may not be long before ‘black marks’ start to become more than a bad experience. China for example has adopted a ‘social credit system’ for black marks.
This was first put forward in an official document in 2014, but is now being piloted in various forms in several cities. The principle is that people build up a score based on past behaviour, which will operate in a similar fashion to a loyalty programme. Misdemeanours can include court cases, and traffic offences, but in the Western hemisphere will most certainly include tax evasion, and avoidance whether successful or not.
A good social credit score in China, can confer benefits, such as preferential loan rates, whereas a poor social score can jeopardise a university place, rule out certain jobs and even limit travel. More than 10.5 million Chinese have been barred from buying airline or high-speed train tickets under this system.
Of course, China is not hindered by data protection, privacy and individual rights, but neither are many Western countries when it comes to tax evasion or attempted tax avoidance. Exemptions are carved out from most of our data protection laws for tax offences.
For anyone who is wealthy enough to worry about being attacked or having their financial information fall into unwelcome hands, they are wealthy enough to take a long hard look at their personal security and wealth ownership structures. Peace of mind may soon be a thing of the past, but there is still time to mitigate your exposure and risk for those who you care for, which is small to price to pay for peace of mind.
If you would like to find out more about how GFOS can review your structure or otherways in which it can facilitate solutions for you and your family, please contact me at caroline@garnhamfos.com phone, 07979 188 288, or 020 3740 7422. You can also buy my book direct from me, from Amazon or from our website www.garnhamfos.com.