Foreign money floods U.S. tax havens. Some of it is tainted
washingtonpost.com
washingtonpost.com
Imagine someone levies a credible-sounding allegation against you and the prosecutor decides to not take up the case. Should you be able to open a bank account or a trust after that? I think you should.
This, of course, doesn't mention the all the reporting used for detecting tax evasion or money laundering.
US banks are absolutely a wing of the court by operating under the given rule of law, and through the US banks' worldwide influence this 'rule of law' gains a global prominence.
It's also about actual legal obligations.
> "Trident and a New Mexico firm acting as trust protector opted to end child-support payments, records show. In sealed court documents, obtained by The Post and the ICIJ, Trident argued that South Dakota law prevented the payments and that Pallanck was “not a good steward of his children’s finances.” The trust provides $1,500 a month for general expenses [vs the court-determined $8,500 for his two children with millionaire oil-heiress Cleopatra Cameron] , Pallanck said."
Unilaterally curtailing court-awarded child support payments is a pretty concrete topic.
> The Santa Barbara district attorney’s office last year filed criminal charges against Cameron for failing to provide support. She pleaded not guilty; prosecutors ultimately dropped the case.
I have no idea the true facts of the case, but I do know the prosecutor elected to drop the case.
I'm not sure how a California DA choosing to prosecute or not is supposed to opine on those facts.
I would think that a California DA would be exactly the right person to decide to prosecute Cameron's failure to do so.
> California court in 2010 had awarded Pallanck full custody of their young children and later ordered Cameron to pay $8,500 a month in support, according to court records and interviews.
Which is why I'm confused that you seem to be implying that a DA dropping the case is evidence of... lack of merit?
As for the current state of the trust, that's the entire point of this article -- or do you believe financial court judgements should be avoidable by forming a trust in another state?
To me, it sounds like “we have to follow our trust charter and state law” is by far the most reasonable outcome. Do I think that moving money into a trust in CA or SD should permanently prevent the ex-husband from getting the child support? No. Do I think the trustee needs some supporting documentation (likely an order from a court of competent jurisdiction) allowing them to disburse funds to other than the beneficiary and against the beneficiary’s wishes? Unfortunately, but unequivocally: Yes.
Said another way: suppose you’re the trustee. Guy comes to you and says “you don’t know me, but your trust’s beneficiary owes me money; I want you to pay me.” What gives you the legal right/obligation to give this guy the money? If you do, do you risk having it come from your own pocket when the beneficiary establishes that you didn’t have the right/obligation to do that?
Which is why I highlighted this particular instance, because neither of those are true. The allegations were proven to the satisfaction of the court, and there was a court judgement.
In reality, what the South Dakota law seems designed to do is create enough uncertainty, delay, and paperwork that most people give up and go away. Which seems like what the California DA did.
To me, this feels like a case of stated aims by South Dakota (protecting trusts' privacy) vs actual aims (shielding money from litigation, in order to attract more trust business to the state).
It is absolutely possible to create a system so byzantine that it can simultaneously be technically legal (we pay all valid claims) but realistically illegal (our processes are so convoluted that it's effectively impossible to validate a claim).
It is this last point that I don’t read as being settled legally that she is in arrears for child-support. (I believe she is. You believe she is. I don’t see that a court has judged that she is and it seems like that’s what the ex-husband needs to prove.)
It’s possible that it’s in the article and I’ve overlooked it twice, but I don’t see it.
> The trust was originally established in California, where creditors can place demands on trust assets. In 2012, Cameron moved the trust to South Dakota and, in 2016, to Trident. (During which, previous to 2016, the implication is that the trust was paying the ordered child support)
> Trident and a New Mexico firm acting as trust protector opted to end child-support payments, records show. [Arguing that SD law prevented claims.] The trust provides $1,500 a month for general expenses, Pallanck said.
> In 2019, after he went to court to enforce the California child-support order, the South Dakota Supreme Court sided with Trident. “Our Legislature has placed formidable barriers between creditor claims and trust funds,” the court wrote in a unanimous opinion.
That's my read: that current SD trust law, backed by the SD Supreme Court, refuses to enforce claims against (specifically) trust assets.
Which... doesn't seem great, and because of which it seems fair to label South Dakota as a legal haven for trusts. (The article not saying as much about whether the IRS faces similar hurdles)
I'm not sure what recourse is left if a state supreme court tells one to pound sand, despite another state's court having a claim?
IANAL, but it seems like, assuming she’s a CA resident, that he has to get a judgment against her (a civil judgment would be enough) that she is in arrears. If SD then tells him and the CA court to pound sand, it’s then a federal matter.
I think whether SD law prevents direct child support claims is almost a red herring here. She is on the hook (as an individual) to make the payments. She is (presumably) able to draw funds from the trust to cover her obligations. The trust (being not her) is not on the hook as a standalone entity, but it seems like in the worst case the money could be attached the moment it becomes hers (when it moves out of the trust into any account that belongs to her).
I’m guessing (and hoping) that he’s getting competent legal advice and, this probably doesn’t become a story if it was easy, but this seems like “though the wheels of justice turn slowly, they grind exceedingly fine” and the right thing will eventually happen (the kids’ dad gets the money).
Not included: how US wealthy and powerful secretly move money.
But seriously, money is points that we recirculate. It's likely all of it has passed thru some unsavory transaction. More to the point, the folks depositing money may be dodgy. The money itself is just imaginary points in the game. It's all the same color green.