Fraud Using Tax Havens

Many frauds involve using tax havens, as their confidentiality and secrecy aid fraudsters. In law, fraud is the deliberate deception to secure unfair or unlawful gain or to deprive a victim of a legal right. The purpose of fraud may be a monetary gain or other benefits, such as obtaining a driver’s licence or qualifying for a mortgage by way of false statements. 

The Office for National Statistics stated that ‘almost six million fraud and cyber-crimes were committed last year in England and Wales with fraud affecting one in ten people in the UK’. The annual cost of fraud in the UK is estimated at £193bn with most frauds relating to bank account fraud. 

The remedies for fraud may include rescission (i.e. reversal) of a fraudulently obtained agreement or transaction, the recovery of a monetary award to compensate for the harm caused, and punitive damages to punish or deter the misconduct. Unfortunately, the likelihood of enforcing these legal remedies through a tax haven are close to nil.