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  1. Wealth
February 22, 2013

As Oscar Pistorius is Granted Bail, How do the Rich Flee Justice?

By Spear's

Paralympian Oscar Pistorius has been granted bail until his trial for the murder of his girlfriend, Reeva Steenkamp, but some worry he’s a flight risk. Oliver Thring has investigated the rich who seek to flee justice, and learns that today you can run, but it’s harder than ever to hide.

Escapist Fantasy

As Oscar Pistorius is granted bail, despite some fearing he’s a flight risk, we wondered whether it’s possible to start a new life, under a new name, in a new country? Forget it. You can run, but these days it’s a great big pain in the neck to hide, says Oliver Thring
YOU’VE ENJOYED A long and richly rewarded career in finance or industry. You’re feared, respected, perhaps even liked in some quarters. But you harbour a terrible secret: everything has been a sham. You’re a fraudster, and you sense they’re coming for you. The honourable thing would be to stay and have some very expensive lawyers clear your name, but no, be realistic — you’ve got to get out while you can.

Fleeing justice is as popular now as ever. The neighbour of software tycoon John McAfee, who had constructed a pleasure palace and dissolute existence in Belize, was found murdered in November and McAfee, paranoid that the government was out to frame him for the crime (or even rightly arrest him), took to the hills and then fled over the border into Guatemala. (Eventually he was deported to the US, the country whose taxes he first fled when he went to Belize.)

Oscar Pistorius was granted bail on Friday, but some worry he’s a flight risk. If he does jump bail, he won’t be the first wealthy individual to try and escape justice
Flight has a long and inglorious history, of course, for men in trouble. Lord Lucan vanished in 1974, his blood-stained car found abandoned at an English ferry port shortly after his children’s nanny had been bludgeoned to death. Asil Nadir spent seventeen years in Northern Cyprus evading prosecution in the British courts for the theft of at least £34 million from Polly Peck.

And just last June the Brazilian-born industrialist Guma Aguiar, who had been embroiled in a billion-dollar business dispute, disappeared from his yacht. His wife claims he may be hiding in the Netherlands, but she and his mother are now scrapping over his $100 million fortune nonetheless.

What factors do imminent country-jumpers need to bear in mind? The careless criminal leaves everything to the last minute; the perspicacious crook does his groundwork in advance. He protects his assets in legal but exhaustingly complex and opaque financial structures, he secures citizenship of a suitable second country and avails himself of the means to escape there at short notice.

Thus, you should plan your escape as far in advance as possible. Houses, art and other valuable assets need to be transferred from your ownership to those of legal entities seemingly unconnected to you. But this should be done discreetly.

‘I would always ask a prospective client why he wanted to hide his assets,’ says Bharat Pindoria of Pindoria Solicitors, who specialises in asset protection. (Pindoria emphasises that his firm ‘does not do asset protection to help criminals’.) ‘If the client said he’d ballsed up and might be in trouble, we wouldn’t be able to advise him, but if he lied and said it was to move abroad or because he had better opportunities elsewhere, that would be a different matter.’ For an unscrupulous person, then, another lie here is no trouble.

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The best way to store stolen money or property is to transfer ownership offshore, adding as many degrees of remove as possible. ‘There would be no bank account in your name,’ says Pindoria. ‘You’re in Panama and you have power of attorney to withdraw money from a company in Mauritius, which might have a bank account in the Dutch Antilles. The Mauritius company is owned by a Belize company, which is owned by a Dutch Antilles trust.’

There could be dozens of such structures. Even if the authorities went to the British High Court and secured a worldwide freezing injunction, says Pindoria, ‘that injunction might not be recognised in every country, and they still wouldn’t know where the assets were ultimately being kept. They could go round and round, from jurisdiction to jurisdiction, for years.’

For British escapees, the Dutch Antilles may prove useful for hoarding a bit of pelf. Chinese nationals reportedly find the British Virgin Islands more hospitable. Indians or citizens of African states are said to welcome the secrecy they sometimes find in New Zealand. Much depends on the relationship between your original country and your adopted one.
Illustration by Kyle Smart
OF COURSE, HAVING your assets safely stowed won’t be much use if you’re languishing in prison. Anyone serious about fleeing needs to get citizenship of a new country that will not extradite them back home. With enough planning, British citizens have an extensive range of possibilities, although not everyone wants to live in the Faroes, Kyrgyzstan or Chad. Men who successfully impregnate a Brazilian woman can find themselves fast-tracked to citizenship of that fine country: for many years, this method worked for the pointlessly lauded train robber Ronnie Biggs.

Several Caribbean islands offer citizenship to foreigners who invest significantly in domestic industries or local property markets. In St Kitts, a $250,000 investment in the sugar industry, or the purchase of at least a $400,000 property, can lead to a new passport being issued in a matter of weeks.

After that, it’s just a question of getting there. For those who are already the subject of a criminal investigation, leaving the country will prove difficult without bribing private pilots or stowing away inside a vehicle. And that in itself can lead to other problems: the pilot who flew Asil Nadir to Northern Cyprus was sentenced to two years in prison for perverting the course of justice, though his conviction was quashed on appeal.

If you are a more organised criminal, you need only buy a ticket, present your Kittitian passport on arrival, and the British authorities shouldn’t be able to touch you.
BUT THEY WON’T forget you, and they’ll soon know where you are. Oliver Crofton is the director of technology security firm Vigilante Bespoke. ‘It’s nigh-on impossible to have an existence where you aren’t tracked or traced by technology,’ he says. John McAfee’s precise location in Guatemala, for example, was determined by the GPS co-ordinates embedded in a photo taken of him then posted online.

‘If the person really wanted to hide,’ says Crofton, ‘they’d need to change their name and chuck every device they had in the river. They couldn’t even open any emails, and they certainly couldn’t use a credit card — just a suitcase full of dollars.’ Crofton believes that people who flee their country without trying to stay hidden are ‘relying on people losing interest in them because tracing them, and their money, might get a bit complicated. I don’t think that’s a particularly failsafe plan.’

This stress and trauma can also have unforeseen side-effects. ‘Prolonged separation can lead to depression, anxiety, OCD, intense loneliness, alcohol and drug abuse, even suicidal intentions,’ says Dr Sheri Jacobson of Harley Therapy, most of whose clients work in the City. ‘People will naturally try to preserve their sanity, but a situation like this could intensify an underlying paranoid personality disorder.’ The words of the Belizean prime minister, who called McAfee ‘extremely paranoid’, seem suddenly more pertinent.

Fleeing the country and hiding your money while retaining access to it are not getting easier. Governments and financial organisations are more connected than ever. The political will to pursue legal offshore tax avoidance is surging in Western countries, and Swiss banks are increasingly reluctant to accept deposits deriving ultimately from Americans. ‘You’re simply much more likely to be caught now,’ says Pindoria. But that is unlikely to prevent a few people with a lot to lose from stashing their money, jumping on a plane and alighting on a new treasure island.
Read more by Oliver Thring

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