Jessie Soh10221

Sales pressure and dishonesty can be just as bad outside the U.S.-- especially in some of the less regulated former tax havens and jurisdictions. In some of the island havens there are more high-pressure con artists than sand on the beach. Why? It's simple. Because they can get away with it.

Although most U.S. regulations exist to promote the best interests of the financial services industry rather than protecting the consumer, there are some practical investor benefits from an over-regulated financial environment. Blatant lies and misinformation will land U.S. financial salespeople in big trouble with their employers, and this can also lead to large fines and even jail time. On the other hand, in many offshore havens the investor-protection regulations sound great but in practice there is minimal enforcement and protection.

Go to exotic locations to enjoy the beach, gamble, or chase your personal pleasures, but do not make the mistake of investing much of your wealth in questionable jurisdictions. For global services and structures in a tropical environment, I personally prefer a few highly selective and professional providers in the more regulated jurisdictions such as the Isle of Man, Bermuda, Belize or the Turks & Caicos Islands. Nevertheless, I still prefer the safety and regulations of an advanced money center like Switzerland.

When you establish asset protection, insurance, or investment accounts outside your home country, be on guard even more than you would at home. Make sure you are dealing in an advanced, heavily regulated top-tier jurisdiction with a long history of financial management, expertise, and infrastructure. Be sure to confirm that the products or investment manager are all part of a long-standing institution that will not go under tomorrow. Also make sure that the offshore product is legal and designed for American investors. Most importantly, make sure you understand your regulatory and reporting requirements to the American authorities. Remember, ignorance is no defense in these matters.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford

Just as quality offshore providers in this post 9/11 environment will practice due diligence on you and the source of your investment funds, you too should check them out completely. If you feel any pressure or think for a moment the promises and benefits are too good to be true, then they probably are. Stay away from deals, products and strategies that are touted as all benefits and where the downside risks are never mentioned.

Case Study #4 Too Good To Be True

A final example: Dont laugh - it's true. A prospective client called me a few years ago with $560,000 to invest. As we talked it became apparent he was involved in a FOREX Trade Program and he was expecting around $13,000 per week as profits for his initial investment. I asked him how the program worked and he indicated that he legally couldnt disclose this information because of confidentiality reasons, since he was privately invited to join the program. I then asked, Well, how much did you invest? He indicated $700,000 or so I thought. I answered, you wont get rich quick with that kind of quick return and he replied, Mr. Holland, maybe you cant earn this kind of return but I have been guaranteed a $560,000 return on my initial $700.00 (seven hundred dollars)investment over the next 40 weeks. What a scam and what an idiot to believe it.

This gentleman was well educated and my only response was Dont send them more money until you get your full $560,000. Many astute investors continue to fall for the Nigerian internet bank account or their new lottery winner scams. I have a Swiss investment advisor friend who recently was able to talk two wealthy clients out of flying to Europe to meet with a representative of the scam artists in order to claim their millions. Now youre probably thinking, What idiots! but this kind of thing happens every day. Successful people, businessmen, and even a former congressman (who is Chelsea Clinton's potential father-in-law) is in jail because of a Nigerian scam, so it is pretty easy to become a victim in these schemes.

Again, none of us are totally immune to scams and rip-off artists. I have some simple advice on dealing with questionable too good to be true investments, tax reduction efforts, and asset protection and privacy programs. If it appears too good to be true, then you can bet your last dollar that it is. Never invest on a whim and if anyone attempts to create a sense of urgency regarding an investment opportunity, simply do not do it.

Offshore & Onshore Promoters: A Major Risk You Never Hear About

There is a world of difference between downplaying investment risks or high-pressure sales and the blatant theft or disregard for fiduciary responsibility. Although this is often rampant offshore, some crooks have actually worked from inside the United States. Just do a Google search on the well-known offshore gurus - Jerome Schneider and Marc Harris - and you'll get an idea of what can go on offshore.

Everyone has read the airline magazines and seen the advertisements with the old men and beautiful women living the high life of the rich and famous in their own "offshore private wealth haven." These types of advertisements attempt to create the mindset that if you purchase certain expensive information or establish their "unique" offshore account structure then you could somehow avoid paying taxes and thereby become rich.

Don't laugh! Many thousands of Americans have followed this line of wishful thinking and doled out hundreds of millions to offshore promoters with crazy schemes that either didn't work, were illegal, or were so secretive that the investors found their "asset protected offshore accounts" were looted by the offshore promoters themselves.

Remember, there is little or no tax benefit anymore for Americans investing offshore. The same goes for most structures, bearer share scams, and offshore corporations. Yes, they do offer a degree of asset protection and confidentiality, but they do not tender substantial tax savings. Lets face it: A complete absence of taxes does not exist anywhere in the real 21st century world, except for the lucky few citizens who manage to keep their finances hidden their entire lives, but you do not want to live like that. This is especially true for Americans who are taxed on worldwide income regardless of where their investments are or where they live.

Another reason why it is unwise so avoid the IRS is that when American investors attempt to either beat Uncle Sam at taxes or hide money offshore illegally, they have little or no recourse when their offshore nest egg is suddenly lost, looted or stolen. Those who market these offshore "hide your wealth scams" are aware of this and when they get your money they know that legally you cannot come after them.

If you follow this course of action and lose your investment, the promoters know you are left with two very painful choices. First, after a few phone calls, faxes, letters or maybe even a personal visit, you'll give up and walk away from the crime because the promoters understand you will have only lost your money. Your second option is even worse. If you go to the U.S. authorities you still lose your money, but can expect additional government fines, penalties, and maybe even jail time for the non-reporting, filing and disclosure. These offshore scam artists know investors will always take the lesser of two evils. This is why this criminal offshore risk is so under-reported in the press.

Just in case an explanation of the term offshore might be helpful, here is my definition. Offshore means international, foreign, or outside of your home country. In our book, we use the term offshore to mean legal, legitimate investing outside your currency, jurisdiction and nation. There is nothing illegal in going international or offshore, as long as you follow the rules of your home country. And offshore investing does have huge advantages. The US has some 8000 mutual funds. There are, however, 50000 mutual funds worldwide and the number of these is growing. What are the chances of finding a better investment offshore? There are far more investment opportunities offshore, and you escape the many additional risks to American and foreign investors now present in the American dollar and investment markets.

My recommendations:

1. Never deal with lone individuals or risky, questionable, strategies in the offshore world.

2. Going offshore with your funds does not change the rules. US tax rules apply to US persons no matter where they live or where they send there funds. When you employ international structures and strategies, be sure that your advisor understands the rules of your domicile, the United States. Only then can you be assured your legal and compliant strategy will not turn into an illegal tax evasion nightmare.

3. Always make sure your structures, strategies, and funds are with well-known financial institutions with long-standing reputations and international business activities located in highly regulated, top-tier offshore jurisdictions.

If you fail to follow these rules, then prepare to pay the ultimate price for an offshore structure that neither protects your assets nor is legal because when things go wrong you will have no recourse. Even worse, you will have lost the assets that you desired to safeguard and will be unable to get redress or warn others about the scam. "The beginning of wisdom is to call things by their right name." -- Chinese Proverb But You Cant Trust American Institutions Or Our Regulators Either!

The American financial establishment is always keen to bring up the political investment risks of foreign jurisdictions. Although this risk is certainly justified in many less developed nations and regions, most of Europe is on par or actually superior to the United States regarding reporting and accounting standards. In fact, recent scandals - Enron-style accounting, the Boston mutual fund problems, our major accounting firm scandals and the excesses of the former NYSE chairman - have shown Europe to be far less abusive than in America.

The irony is that U.S. regulations require that all investment materials include a discussion of the offshore risks whenever a mutual fund in non-U.S. stock or bond investments or another currency is utilized in an American financial product. The provider must mention the increased currency, reporting and regulatory risks of even U.S. mutual funds or variable annuity portfolios investing in offshore securities. This self-serving hypocrisy became especially true following the revelations of Enron and other dot-com based stocks, which were built upon false reporting and financial cover-ups by both regulators and auditing firms. The collapse of the American stock market mania in 2001 and the weakness of the dollar now clearly indicate that offshore investments do not have a total monopoly on added risks from a weak currency, failed regulatory oversight, and political risks.

I am sure you realize that an ever-weakening dollar can wreak havoc on your portfolio value from currency losses when compared to other non-dollar denominated equity and bond portfolios. There are also increasing political risks from the U.S. jurisdiction. These range from possible government confiscations during a future crisis environment, to exchange controls and limitations on the movement and even liquidity of your funds. Democratic governments like the U.S. often use exchange controls, fines, and penalties in times of war or financial upheaval to keep money in home markets. Weigh the potential costs of having too much of your overall wealth at risk to bureaucrats and political actions in your home country. America is especially at risk due to the potential terrorist risk aimed at our financial markets and infrastructure.

Ron Holland is the author this article and it is from the online book, The Swiss Preserve Solution at http://www.swissconfederationinstitute.org/swisspreserve1.htm This is a politically incorrect guide to defending your wealth & liberty from internal and external 21st Century threats.