Sun and Shadows: How an Island Paradise Became a Haven for Dirty Money

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Warning! The following article is a long read but it is worth it.

Seychelles, a thousand miles from anywhere, is an offshore magnet for money launderers and tax dodgers. A look at this corruption-haunted archipelago shows how the offshore secrecy system has grown — and where it's going.

In the fall of 2012, two strangers from Africa showed up in Seychelles, an emerald-green archipelago in the Indian Ocean nearly a thousand miles east of Somalia. Unlike Prince William and Kate Middleton and other A-list celebrities who favor Seychelles as a getaway, these visitors didn’t come to enjoy the islands’ natural beauty and luxury accommodations. They were there, they said, to conduct business in Seychelles’ bustling offshore financial center.

Eventually they made their way to the offices of Zen Offshore, one of dozens of firms on the islands that set up hard-to-trace “shell companies” for clients around the world. They explained that they represented an individual who served as a “liaison officer between the Zimbabwean government and the rich diamond mines.”

For anyone who understands the nexus of corruption and money laundering in resource-rich, economically poor countries, this statement should have raised suspicions. But before they could go further, a Zen Offshore representative cut them off.

“Yep, we don’t want to know that,” he said, chuckling. “If we have knowledge of that, we have to put it forwards. So I haven’t heard a word you said in the last couple of minutes.”

The operative went on to explain how the pair could set up a company in Seychelles and hide the identity of who was really behind it by creating a labyrinthine ownership structure, putting “a company inside a company inside a company.”

The Seychellois company would be controlled by a company in Dominica, which would be controlled by a company in Belize, and so on. Anyone trying to discover the real owner would never be able to follow the paper trail around the world.

“It’s just impossible,” the Zen Offshore man said. “No one is going to try and chase that sort of information.”

The conversation can be quoted in exact detail because the would-be customers weren’t actually emissaries for a corrupt middleman in Africa. They were undercover journalists running a hidden-camera sting for an Al Jazeera television program.

Their documentary, which aired soon after their visit, produced a ripple of scandal in one of the world’s most remote offshore havens, a place that’s gained a reputation as a magnet for Arab princes, Chinese investors, pirates, fugitives, mercenaries, mobsters — and outlanders who want to hide their money or disguise their business activities.

Sun and Shadows: How an Island Paradise Became a Haven for Dirty Money | International Consortium of Investigative Journalists

 

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Its shadow is looking wonderful.