How to Hide a Billion Dollars

https://www.economist.com/leaders/2019/10/10/how-to-hide-a-billion-dollars

by known • 7 years ago

163 92 7 years ago

forinti2• 7 years ago

These articles always focus on poor countries, but shouldn't we treat such places as Switzerland as corrupt, given that the money always seems to end up there or it is used as a stepping stone so that mineral wealth can be siphoned off cheaply (and thus pay less taxes)?

kenneth• 7 years ago

Before blaming Switzerland, perhaps best to take a look at places such as the U.S. and Delaware, which gets even more of the world's shady business.

bpodgursky• 7 years ago

Because it isn't true? Delaware doesn't charge state corporate income tax and has a specialized business court system. It does nothing to shelter you from international taxation.

ur-whale• 7 years ago

People who watched too many James Bond movies in the 70's love to blame Switzerland for money laundering.

The fact is Switzerland has very much cleaned up their act in the last 10 years, and the worse offender when it comes to cleaning and hiding ill-gotten gains these days are actually the US and Canada.

forinti2• 7 years ago

And The City with all its tentacles in sunny islands.

PeterisP• 7 years ago

Leadership is corrupt when it acts against the interests of their people to benefit their personal interests.

Swiss government is accountable to their people, not to foreigners - if they choose to act in a manner that benefits the swiss (not because it somehow directly enriches these Swiss leaders personally) at the expense of some other people exploited by their corrupt dictator, then that's not a corrupt action but a prudent decision for the benefit of their country, possibly even a duty if their people support that.

neonate• 7 years ago

http://archive.is/frnY9

https://web.archive.org/web/20191014191405/https://www.econo...

gwbas1c• 7 years ago

Bitcoin!

(Loud chorus of laughter)

nickthemagicman• 7 years ago

That could be an article titled how to lose a billion dollars.

therein• 7 years ago

Tether it is then. \s

vl3• 7 years ago

Bitcoin futures!

k_sze• 7 years ago

No. You hide it behind a paywall!

Havoc2• 7 years ago

Prosecutors are mystified as to what military purpose might be served by the upper deck’s jacuzzi.

Actually South Africa's former crooked president solved that.

You see it's not a swimming pool. It's a firepool. A source of water in case of fire. Making it a safety feature and thus legitimate expense to guard the president.

And to prove it they - I kid you not - made a youtube video about it:

https://www.youtube.com/watch?v=TH2PWsn1qu8

toomanybeersies• 7 years ago

That's actually a legitimate feature of a swimming pool if the building doesn't have another water supply (e.g. mains water or a pond) nearby.

In Australia they are a tax deductible expense as a water facility: https://www.theland.com.au/story/4330059/cool-pool-20k-tax-w...

mxfh• 7 years ago

Quite ingenious low cost reuse of a half container with prefab fibreglass inlay. Even without the tax incentive.

http://shippingcontainerpools.com.au/

https://www.instagram.com/shippingcontainerpools/

Havoc2• 7 years ago

That's actually a legitimate feature of a swimming pool

Yeah it was in a way legit. Lots of thatch roof houses nearby etc - if it hadn't been for the context.

They built a ton of private stuff with taxpayer money and then tried to justify it later when called to account. e.g. A mini Amphitheatre because a soil retaining wall. Swimming pool became a fire pool. The chicken coop...well there their creativity failed them.

rustig5• 7 years ago

Article cites gulf royals and king of Swaziland as examples of corruption but neglects to mention the UK's own royal bunch who are just as wealthy or even more so with no good explanation for how and why they're entitled to so much of the country's wealth. A one-eyed take if you ask me. Typical of the economist.

cperciva• 7 years ago

The UK Royal family is wealthy because they acquired land through a combination of warfare and marriages many centuries ago. If they're unique, it's in the lengthy tenure; other medieval kingdoms have mostly overthrown their kings and seized their assets.

That's completely different from rulers who are actively looting their nations today.

rustig5• 7 years ago

How is that different from the Saudi Royal family or king of Swaziland? The comparison was not to looting rulers but the other royals the article strangely cites as examples without mentioning the UK Royal family who's source of wealth is similar. Also what do you mean by 'acquired' wealth. Arguably the despots of today are just doing the same ('acquiring' land for future descendants through warfare and despotism)

paulddraper2• 7 years ago

It's "completely" different only in that they've held onto they're much better at holding onto their gained wealth.

amiga_5003• 7 years ago

Can the public "acquire" it back through violence?

headsupftw• 7 years ago

Of course it's different but I fail to see how it is "completely" different given that the UK Royal family did actively loot ancient Britain. Tomeito tomato if you ask me.

lucasmullens• 7 years ago

neglects to mention

Whataboutism is a bit tiring. That issue doesn't really seem essential to include.

rustig5• 7 years ago

I don't care for despots or monarchs of any kind, but it looked like a glaring omission to me. My problem is not with the article in general but the strange decision to lump in the Gulf/Swazi royals whose wealth is no less legitimate in their countries than the UK royals in theirs. Seemed a tad hypocritical to me

kaffeemitsahne• 7 years ago

People pointing out "whataboutism" is incredibly tiring. It is IMO quite legit to point out related issues in western countries. It is potentially interesting and relevant, and it is always good to take note of the hypocrisy of the media.

dredmorbius2• 7 years ago

It's a reasonably fair gripe where you have one monarchy-based journal critiquing what are de facto monarchies or autocracies elsewhere. In the least, raising the question gives an opportunity to discuss similarities and differences, as above.

As a general rule, it doesn't appear that it's the British monarchy that's been principally embroiled in recent offshore banking scandals, that is, excavating national wealth and moving it outside the country. Rather, the UK (and several of its Crown territories) are strongly implicated in numerous offshore banking centres (as is the US for that matter), and its often business and financial actors who are engaged in such activities, along with some elements of organised crime.

Not heads of state, titular or (nominally) elected.

GarrisonPrime• 7 years ago

The True Cost of the Royal Family Explained, video by CGP Grey:

https://www.youtube.com/watch?v=bhyYgnhhKFw

too long; didn't watch:

The royal family likely contributes quite significantly to the popularity of the UK tourism industry, which brings in FAR more money to the country than the institution costs to maintain, even considering all the royal salaries to pay, the palaces to maintain, public events to produce, security, etc.

They also lease out a great amount of land to the country - to the wide benefit of the entire populace - for pennies of what it would cost the nation to purchase such land and resources outright.

deogeo• 7 years ago

They also lease out a great amount of land to the country - to the wide benefit of the entire populace - for pennies of what it would cost the nation to purchase such land and resources outright.

Land which, without support from the royal family, would sink into the ocean.

slap2• 7 years ago

The royal family likely contributes quite significantly to the popularity of the UK tourism industry

France beheaded their king, and people are still visiting Versailles.

No one is coming to see the UK palaces because the Queen may be around.

Aperocky• 7 years ago

I think at a certain point society stops being about 'who produce these things and values', and instead turns into 'how do I find novel things for people to do'. a.k.a. service oriented economy.

hogFeast3• 7 years ago

This is a little complex. In the UK, there is a distinction between the Crown Estate (which is technically owned by the Royal Family but functionally owned by the state, you also include the Duchy of Lancaster/Cornwall in this) and the Royal Family's private wealth.

The latter consisted in large part of property (Sandringham and Balmoral are privately-owned), furniture, art, jewellery left by the Queen Mother to the current Queen (some of which was then gifted to the state) and an investment portfolio...which no-one actually anything about (it is not large) but which was all acquired privately (both Sandrigham and Balmoral were bought on the open market by Queen Victoria).

To suggest they have "so much of the country's wealth" is wildly inaccurate though (most estimates are $500m, and that is including the Duchy of Lancaster/Cornwall...she benefits from the income of both but they are not owned by her personally). The Royal Family aren't even the wealthiest members of the aristocracy in Britain (or anywhere close, frankly).

Btw, it is worth remembering that we executed our king ~500 years ago when he got out of line. This isn't our first rodeo.

brainerd_w• 7 years ago

All very nice but I don't really see the relevance to GP's point. Probably a Swati national can chime in here with an equally interesting explanation of their Royal wealth or take issue with the Economist' characterization of it.

vl3• 7 years ago

It’s absurd that modern “democracy” has monarchy, no freedom of speech and no constitution, on top of that there is a state religion. Both UK and Spain are not examples of how it should be done, for a simple reason - we say to less democratic country, “do democracy or else”, they go - “UK has Queen and no freedom of speech too”!

Anyway, monarchy in UK is partially tolerated because most of the income from their properties goes to the state, otherwise, I suspect, they would be done for long ago.

amiga_5003• 7 years ago

They recently clawed back more of "crown land".

trollied• 7 years ago

A good modern day story of how not to hide $4 billion is Jho Low: https://en.m.wikipedia.org/wiki/Jho_Low

The book that chronicles (Billion Dollar Whale) is a real page turner, with lots of it being unbelievable.

Seen The Wolf Of Wall Street? He funded its production with his stolen $... :)

9nGQluzmnq3M• 7 years ago

The article mentions him (but not by name) as the launderer of Malaysian PM Najib's loot.

jeffwilcox• 7 years ago

Agreed. I also enjoyed this short summary write-up about part of the book... https://philip.greenspun.com/blog/2019/09/08/how-to-steal-bi...

chewz• 7 years ago

Chatham House, a British think-tank, estimates that $582bn has been stolen from Nigeria alone since it won independence in 1960. [1]

[1] https://www.economist.com/middle-east-and-africa/2019/10/10/...

senorjazz• 7 years ago

Not just a developing country problem. Look at the money that cannot be account for during the Bush wars of the early 2000s, with Halliburton being given costs+profit contracts and being able to say without oversight what there costs where.

Same for a lot of developed countries with the 2008 banking crisis with billions unaccountable

erikig• 7 years ago

Kudos to Mo Ibrahim for putting his money where his mouth is.

mrandish3• 7 years ago

Here's a perverse aside, I suspect once you get much over $10k to hide, each 10x increase in the amount actually makes it easier, not harder. Reasoning: if you've got a small amount, transaction costs eat it up quickly and there's little incentive for others to get involved.

If you've got $100m there are entire ecosystems of consultants offering to "help you put that money to work." Identifying the more "cooperative" ones willing to look the other way or sidestep certain barriers is probably not too hard. And with $100m to hide, if it costs $5m to get the job done, that may seem like a good deal.

Back when I sold my startup to an F500 acquirer, within days of the acquisition hitting the news I started getting calls on my non-public, pretty closely guarded, mobile number from financial advisors, investment bankers and consultants. Everyone from Goldman Sachs on down. One of them pitched me on how I could "shelter" funds. I asked him how and he walked me through a byzantine scheme that seemed pretty shady - and I didn't even have anywhere close to "real" money compared to even a fledgling banana-republic despot.

vl3• 7 years ago

Identifying the more "cooperative" ones willing to look the other way or sidestep certain barriers is probably not too hard.

No need to identify, just call Goldman Sachs or HSBC.

ct5202• 7 years ago

150k+ range should get easier. Anything less fees still eat you up. At lower amount you basically be looking to mingle with entrepreneurs that have capital and are willing to exchange at a percent equal to their risk.

MR4D• 7 years ago

Less than 150K is cash or gold.

Pretty easy to put coins in your pocket (or several pockets) with change.

Carefully thought through, I'd bet you can put $100,000 into the change cup at the airport security line and nobody would have a clue.

For instance, the Canadian Loonie [0], and the Canadian Gold Maple Leaf coin [1] have similar color the same face on one side.

You can get more esoteric if you go with collector coins. Take a 1932 US Quarter, with a value up to $15,000. [2] I guarantee you could put ten of those in your pocket and nobody would notice!

[0] https://en.wikipedia.org/wiki/Loonie#/media/File:Canadian_Do...

[1] https://www.walmart.com/ip/Canada-1-oz-Gold-Maple-Leaf-9999-...

[2] https://www.ngccoin.com/coin-explorer/washington-quarters-19...

cylinder2• 7 years ago

Did you end up hiring any advisors / consultants / wealth managers etc?

If so how did you choose? Did you go by a personal referral or did you go with one who cold called you?

mrandish3• 7 years ago

Since finance isn't my strong suit, I evaluated some of them at length as well as reading some books and a lot online. In the end, I decided the fees such 'active managers' charge wouldn't be worth it for me. Instead, I got a good accountant to handle the tax side and set myself up at a large, well-known discount brokerage with low fees and put it all in a very typical diversified portfolio based on industry standards.

My judgment was that you can either play for a special edge and pay the fees for that active management (while hoping you've chosen a Buffet vs a Madoff), or you can just bet on the overall market based on the risk profile and time horizon you're comfortable, save all the fees you can by letting it ride and not trading. My gut was that the best strategy was likely to be one of those two extremes and anything in-between would be less optimal. Since I acknowledge I don't have the experience or skill to tell a Buffett from a Madoff, I decided not the play that game and go the other way.

It's been over 12 years now and the 'fire and forget' approach has worked out super well. By only rebalancing once a year I also saved a lot of time, mental bandwidth and stress. Admittedly, my market presence has coincided with a ten year bull market, however the long-term market backcasting data shows that buying a diversified portfolio of ultra-low fee funds and just holding has historically worked out best. Of course, it's somewhat sensitive to when you enter the market but IIRC if you hold for ten years, regardless of entry year, it outperformed active management in something like 96% of scenarios.

boring_twenties• 7 years ago

Did you ever figure out how these people all got a hold of your "private" phone number at the same time?

mrandish3• 7 years ago

I don't know for sure but I suspected that it was because in this scenario landing a sale would be worth a lot of money, they were willing to pay a lot to get it. Recall the stories about phone company employees willing to take cash for access to info.

slap2• 7 years ago

Yet for seven of the 12 years since the Ibrahim prize began, no worthy recipient has been identified.

The last sentence was truncated.

bookofjoe• 7 years ago

http://archive.is/frnY9

campfireveteran• 7 years ago

If you have substantial liquid wealth, the best ways to hide it include art (portable/small objects with stable/increasing prices) and foreign real estate in desirable areas in municipalities with strong property rights.

repomies691• 7 years ago

How is art liquid? I don't know much about art but my gut feeling would be that it is very illiquid by default. Also very hard to value and difficult to know which pieces will actually have value 10 years from now.

wil421• 7 years ago

Mo Ibrahim, a Sudanese-British telecoms tycoon, has endowed a $5m prize each year for an African president who governs well and retires when his term is up. You can live quite well on $5m. Yet for seven of the 12 years since the Ibrahim prize began, no worthy recipient has been identified.

rolltiide• 7 years ago

This article is doing it wrong.

It should be an instruction manual on laundering it.

It instead lists how state actors messed up and defend the asset forfeitures in court.

From my travelling amongst the supposed wealthy in various countries, some cultures are just less flashy and more private than others.

The online lists of top 100 wealthiest people are 95% wrong. As in they only correctly list 5 people, in approximate order, and dont even have the names of the other 95.

unnouinceput• 7 years ago

Here's me expecting an intricate and convoluted article on how to split the billions in lower sums on different accounts and banks, use bitcoin and sorts, make investment funds and bogus charities (like US billionaires) and instead I get...this?

madiathomas2• 7 years ago

This is the simple but not obvious way to hide a billion dollars. While you are still looting resources of your country, make sure you are friendly to United States of America and allow them to also loot. They won't touch you. No-one will go after your loot if the US is also benefiting from the looting.

madiathomas2• 7 years ago

What is the difference between Mswati and the Queen of England? eSwatini also have a Prime Minister. Just like Britain. We can say the same thing about the Queen of England and other royals. He is living like a King because he is a King of eSwatini, not an elected leader. Just like the Queen of England.

lurker2823• 7 years ago

just ask the Biden's on how to do it

How to Hide a Billion Dollars

Related Stories