Assuming the receiver uses a proper offshore construct to accept the payment, this would go by unnoticed by your DD?
But most interesting: What is your best guess - Your partner says you find “a hand full” from a few hundred - how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment?
Do you try to uncover such hidden actions, if yes, how?
Also, is there a good reason why someone would not use a offshore proxy/holding?
> how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment?
That's the 'million dollar question', and in some cases substantially more than one million. I think the reason a good number of these people get caught is (1) things like the Panama papers and other leaks like that have made it harder to do this, and have also brought the not insubstantial resources of the authorities to review these constructs and (2) most people never expect that during DD such a thing would be checked.
It's typically quite a surprise when we start asking about the activities of companies that the other party believes are well hidden.
I don’t see offshore leeks as a big deterrent, unfortunately.
The three big ICIJ leaks were not published as in dumped to the public. Only politicians, PEPs, obvious money launderers and some obvious other criminals were selected and exposed. (It’s only money laundering if you can proof the money comes from the proceedings of crime)
There are some criminal service industry leaks that are public, or have been public, yet it doesn’t appear more than a few individual have the motivation to follow trough in combing them. At least this is true for groups who would publish on their findings.
Fair enough. I go on the assumption that there will always be stuff we miss, and my customers do as well - especially given the time pressure that we are under to deliver. Even so, it's a given that some people will get away with these things. Interesting detail: over the years you'd expect something like this to pop up after the fact or in a subsequent DD if it goes on for long enough, but that has never happened. So maybe the number of missed cases is lower than what I would personally expect it to be (a factor of two would not surprise me).
> It's typically quite a surprise when we start asking about the activities of companies that the other party believes are well hidden.
Also, if you do tech DD - most techies are happy to share details that unknowingly might expose because they tend to be less business savvy. CEO/CFO's on the other hand...
Haha, true. Was most probably me who let that deal fall through back then when I admitted the algorithm was basically a bunch of haphazard excel sheets.
Managed to BS the second team way better after that — and they were eager enough to have a share of the rocket ship at all cost.
Guess they weren‘t too happy losing most if their series B invest.
Assuming the receiver uses a proper offshore construct to accept the payment, this would go by unnoticed by your DD?
But most interesting: What is your best guess - Your partner says you find “a hand full” from a few hundred - how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment?
Do you try to uncover such hidden actions, if yes, how?
Also, is there a good reason why someone would not use a offshore proxy/holding?