Massive data leak exposes offshore financial secrets

<img src="http://www.cbc.ca/gfx/topvideo/tax-haven-zalac-040413_lead_media_image_1.jpg" alt="" style="max-width:100%;"><br><br>They sought the utmost secrecy in offshore tax havens. But now some of the world's wealthiest citizens are having their undisclosed financial records laid bare.<br><br>An unprecedented leak of documents is revealing the closely guarded investment information of more than 100,000 people around the world, including hundreds of Canadians.<br><br>In what is believed to be one of the largest ever leaks of financial data, the Washington, D.C.-based International Consortium of Investigative Journalists has received nearly 30 years of data entries, emails and other confidential details from 10 offshore havens around the world.<br><br>CBC News has partnered with the ICIJ over the last seven months to gain exclusive Canadian access to the information. Thirty-seven media outlets in 35 other countries are also involved.<br><br>"This secret world has finally been revealed," said lawyer and international tax expert Art Cockfield, a professor at Queen's University in Kingston, Ont.<br><br>"I find it absolutely fascinating to get a look at this data dump. I think this is the very first time where people like myself, and maybe even government officials, have had access to this information."<br><br>The files contain information on over 120,000 offshore entities — including shell corporations and legal structures known as trusts — involving people in over 170 countries. The leak amounts to 260 gigabytes of data, or 162 times larger than the U.S. State Department cables published by WikiLeaks in 2010.<br><br>"What we found as we started digging in the records is a pretty extensive collection of dodgy characters: Wall Street fraudsters, Ponzi schemers, figures connected to organized crime, to arms dealing, money launderers," said Michael Hudson, a senior editor at the ICIJ, who worked with a team for months to sort through the information.<br><br>"We just found a lot of folks involved in questionable or outright illegal activities."<br><br>There was also plenty of information related to legal offshore dealings. Offshore investments aren't illicit as long as they are not used to evade taxes or launder money.<br><br>As reported by CBC News yesterday, the files show that a Canadian senator and her husband, one of the country's most prominent class-action lawyers, were beneficiaries of a confidential offshore account in the Cook Islands that was used to make investments via Bermuda.<br><br>In many cases, the leaked documents expose insider details of how agents would incorporate companies in Caribbean and South Pacific micro-states on behalf of wealthy clients, then assign front people called "nominees" to serve, on paper, as directors and shareholders for the corporations — disguising the companies' true owners.<br><br>Often the companies were set up through intermediary law and accounting firms, as well, adding a further layer of anonymity for investors.<br><br>"These people have no idea whatsoever about the activities of the companies that they are apparently responsible for. Now, this is a complete travesty," said John Christensen, director of the Tax Justice Network, an international coalition that campaigns against offshore finance.<br><br>"But it is actually crucial to this process of not revealing who the real person is behind the company."<br><br>Sometimes these methods were used by figures with known links to organized crime, arms dealers and ex-mercenaries. In other instances, documents reveal tax dodgers funnelling money offshore, beyond the eyes and arms of their nation's treasury.<br><br>http://www.cbc.ca/news/world/story/2013/04/03/offshore-data-leak.html