Wall Street Firms Involved in Tax Dodge

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Cayman Islands in the Foreign Press


Published on Friday, September 26, 2008 Email To Friend Print Version


True state of Cayman hedge funds concealed by Bear Stearns

LOS ANGELES, USA: The Public Record, September 23, 2008 – The hedge funds--Cayman Islands-based Bear Stearns’ High Grade Structured Credit Strategies Fund and the Enhanced Leverage Fund – bet wrongly on securities that were backed by subprime loans for home buyers with poor credit ratings. In December, investors filed a new round of legal claims against Bear Stearns claiming the bank mismanaged the hedge funds and concealed the condition of the funds until it was too late.
“Officials at Bear Stearns engaged in a concerted effort to conceal the true state of affairs at both of these hedge funds for an extended period of time before they imploded,” attorney Steve Caruso of Maddox, Hargett & Caruso in New York, one of four firms representing plaintiffs, said in December.


Notorious gangster had Cayman Islands account

MIAMI, USA: Boston Globe, September 24, 2008 – Notorious gangsters and longtime FBI informants James “Whitey” Bulger and Stephen “The Rifleman” Flemmi were warned to flee just before their 1995 federal racketeering indictment. But while Bulger slipped away - and remains one of the FBI’s 10 Most Wanted - Flemmi was not so lucky.

Yesterday, the 74-year-old Flemmi - serving a life sentence for 10 murders - testified wistfully about what might have been, and how he, like Bulger, had prepared for a life on the lam. “I had an apartment in Montreal,” Flemmi said. “I was packed. I had money, and I was leaving.” He added that he had a bank account in Canada, under the alias Bealieu, and another account in the Cayman Islands in the name of Three Islands Realty.


Sub-prime loans bundled into Cayman Islands entities

PHILADELPHIA, USA: Evening Bulletin, September 24, 2008 – Most of the loans that will be bought by the Fed will be in the form of CDOs. Essentially, a CDO is a bundle of loans purchased by an investment banker who places them in a trust. The banker then sells the cash flows of these loans, not the loans themselves, to investors.

Most of the CDO entities were formed as off-shore corporate trusts, e.g., in the Cayman Islands. The reason was so that the investment banker would escape federal tax liabilities on income received from the CDOs.

http://www.caymannetnews.com/news-10273--1-1---.html