U.S. court orders HSBC USA to provide details of customers with offshore law firm

Introduction

Got a few million bucks you want to protect from the tax man, a nosey spouse or a greedy business acquaintance? Sovereign Management & Legal Ltd. says it has the answers.

Up until recently, it offered on its website the “‘Bullet Proof’ Panama E-Commerce Combo Corporation/Foundation Package” for $3,475. Total price, taxes included. FedEx deliveries, an extra $75 a pop. Lots of alternatives are available, too, for what it terms “Breaking the ‘Paper Trail.’”

The company’s aggressive online marketing has attracted enough customers that the Internal Revenue Service and U.S. prosecutors noticed. In December, they filed a court petition in New York to get records of Sovereign’s customers from HSBC Bank USA and from several delivery and money and wire transfer services, including the Federal Reserve Bank of New York.

And at the end of the year the IRS added Sovereign to its list of firms that trigger higher penalties — from 27.5 percent to 50 percent — for taxpayers who voluntarily disclose previously undeclared offshore accounts.

IRS agent Randy Hooczko’s declaration, filed in support of the petition, says Sovereign “offers its clients a number of structures and services that can be used for tax evasion purposes.” The idea, the court filings show, is to break through the layers of anonymity Sovereign’s handiwork provides and identify its customers from 2005 through 2013.

Sovereign hasn’t been charged. Calls and email messages to the company seeking comment weren’t returned.

The company’s website amounts to “one stop shopping for money launderers,” said Josh Simmons, policy counsel for Global Financial Integrity, in an interview. The Washington-based nonprofit presses governments to curtail the flow of secret money.

Though other offshore firms offer services like Sovereign’s, “what’s surprising” is how comprehensive and “how blatant they are,” he said.

And they’ll even help you register your yacht.

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