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Pandora Papers Explained: How US states help rich foreigners shield assets

created Thursday October 14, 04:53 by Tanya Sawlani


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The release of the ''Pandora Papers'' report by the ICIJ has shed light on the financial dealings of the elite and the corrupt and how they have used offshore accounts and tax havens to shield trillions of dollars in assets.According to the report, among those who have used South Dakota trusts as tax havens includes Guillermo Lasso, president of Ecuador. A mention of ''tax havens'' typically conjures images of sun-soaked Caribbean escapes like the Cayman Islands or the buttoned-down banks of Switzerland. Not South Dakota. But a report detailing how world leaders and some of the planet’s wealthiest people hide their riches has drawn new scrutiny to the growth of tax havens in the United States. The release of the ''Pandora Papers'' report by the International Consortium of Investigative Journalists has shed light on the financial dealings of the elite and the corrupt and how they have used offshore accounts and tax havens to shield trillions of dollars in assets. Along with the familiar offshore havens, the report also disclosed secret accounts in trusts scattered throughout the United States, including 81 in South Dakota, 37 in Florida and 35 in Delaware. According to the report, among those who have used South Dakota trusts as tax havens are Guillermo Lasso, president of Ecuador, and family members of Carlos Morales Troncoso, a sugar industry magnate and former vice president of the Dominican Republic. David Tassillo, the co-owner of Pornhub, one of the world's largest online porn sites, was linked in the Pandora Papers to two shell companies registered in Delaware. Here's a look at some of the ways some US states have established themselves as attractive places for wealthy people to park billions of dollars. South Dakota launched its financial industry in 1980, an era of double-digit interest rates that had banks paying higher rates to borrow money than the interest rates they were allowed under usury laws to charge on credit cards and consumer loans. In an effort to help South Dakota banks and boost the state's moribund economy, officials eliminated the state's usury limit on banks. It then invited New York-based Citibank, which was struggling financially, to set up a credit card operation, which it did the following year. More banks, and a booming trust industry, soon followed.

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