Investigative journalists have traced hundreds of millions of pounds of secret cash stashed in trusts on a string of tiny Pacific Islands.
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The reporters allege the Cook Islands are one of the few remaining tax havens where fraudsters and financiers can hide their money.
The 15 small islands with a land area of just over 90 square miles are pound for pound some of the most expensive real estate in the world when the value of the hidden funds is averaged out.
Home to just 14,500 people and nearly 2,000 miles from nearest large neighbour New Zealand, the islanders are accused of running a financial empire shrouded in secrecy.
In the report Paradise of Untouchable Assets, the United States International Consortium of Investigative Journalists says local laws protect trusts held on the islands.
Ponzi fraudster
A confidential catalogue of documents detailing 700 trusts was turned up when the journalists were making inquiries about where the ill-gotten gains of Ponzi scheme fraudster R Allen Stanford are hidden.
Stanford is serving a 110-year jail term in the US for swindling unwary investors out of billions.
Journalist Leslie Wayne explained that as his team pored over the documents, they realised hundreds of wealthy and sometimes notorious individuals had handed their money to trusts in the Cook Islands for safe-keeping.
“The Cook Islands are not only geographically isolated, but beyond the laws of the United States and other countries,” said Ms Wayne.
“Lawyers behind the trusts have come up with an almost impenetrable method of protecting hidden cash from prying eyes and legally out of reach of international laws. Orders from courts in other countries are simply ignored.”
Tax haven
The Cook Islands economy relies on tourism for around 70% of GDP, with around 100,000 rich visitors stopping off on the sandy, sun-drenched paradise islands on trips between Australia, New Zealand and the Americas.
Information revealing the 700 trusts is just the tip of the iceberg, says Wayne, as lawyers in the US reckon around 2,600 are held under island laws.
Wayne agrees holding a Cook Islands trust is not illegal, but points out that many are held by wealthy individuals putting their assets beyond divorce lawyers or crooks keeping their cash safe until they have served their time.
The team of journalists believe the Cook Islands were overlooked as ‘insignificant’ in British and US attempts to track down profits of multinational companies as the islands have no links with terrorism or international corporations.
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