The new Treasury Secretary Steve Mnuchin concealed from the Senate that he had an investment fund in a Caribbean island known to be a Russian money laundering haven.
It is not clear if Mnuchin’s fund on the Caymann islands handled Russian money…
The Russian organizations are “making inroads all over the world,” said Jonathan Winer, deputy assistant secretary of state for narcotics and law enforcement. “The Russians are forming alliances with other ethnic-based criminal groups like the Italian Mafia and Colombian cartels for one type of income. They are also involved in prostitution, extortion, theft of state income, money laundering, arms sales and intellectual property theft. It is new in the Caribbean and very dangerous.”
The billions of dollars now believed to be flowing through such offshore bank havens as Antigua, Aruba, the Cayman Islands and St. Maarten are difficult for authorities to trace because under these countries’ laws it is easy to open a bank, and depositor and transaction information must be kept secret. In some Caribbean nations, money laundering is not a crime.
Barry McCaffrey, a retired general who was the Clinton administration’s anti-drug czar from 1996 to 2001, said he had seen estimates that up to $50 billion from the sale of narcotics, out of an annual world total of $500 billion, is laundered through the Caribbean, making it a “ferociously corrupting influence” in the region.
“It is passing strange that large Russian banks would decide to create offshoots in Antigua,” said Winer.
Officials say offshore banks offer a perfect way to launder, making millions of dollars in illegal gains appear legal. By depositing the money into accounts where no questions are asked, its origin is hidden. Funds can then be transferred through other banks as if the money had a legitimate origin, allowing the criminals to use illegal profits legally.
he Cayman Islands, a UK Caribbean overseas territory, is an offshore financial center. Most money laundering that occurs in the Cayman Islands is primarily related to foreign criminal activity and involves fraud, tax evasion, and drug trafficking, largely cocaine. The offshore sector is used to layer or place funds into the Cayman Islands financial system. Due to its status as a zero-tax regime, the Cayman Islands is also considered attractive to those seeking to evade taxes in their home jurisdictions.