SHELL COMPANIES for money laundering, tax evasion, hiding kickbacks, layering PART 6 -- CAPT AJIT VADAKAYIL

THIS POST IS CONTINUED FROM PART 5 , BELOW--

http://ajitvadakayil.blogspot.in/2017/02/shell-companies-for-money-laundering_24.html

Indian mining billionaire Anil Agarwal of VEDANTA  is one of the many secret buyers of high-end real estate in New York City's Time Warner Center, a luxury condominium that looms over Central Park.. A company called Amantea Corp  bought two condos on behalf of Agarwal .. 

Agarwal's name is not on the records.   Agarwal, his father and his brother were found to have illegally moved money out of India using shell companies in Mauritius and the Bahamas.

http://ajitvadakayil.blogspot.in/2012/09/bauxite-mining-naxalite-menace-joshua.html

Perfect crimes involving SHELL COMPANIES is now commonplace.    For only $35, Paul was “in business.”   That small investment bought a fictitious-name or DBA (doing business as) certificate — which was the key to his grand plan to defraud his employer.

He used the certificate to set-up a business checking account and then added his new enterprise as a vendor in the accounting system.  A few days later he submitted his first invoice for payment.  His boss, the owner of the company, never noticed.  

Paul stole nearly $500,000 over the next three years.

Association of Certified Fraud Examiners (ACFE) is a professional organization of fraud examiners. Its activities include producing fraud information, tools and training. The ACFE grants the professional designation of Certified Fraud Examiner. 

The ACFE is the world's largest anti-fraud organization and is a provider of anti-fraud training targeting SHELL COMPANIES , with more than 80,000 members. CFEs are trained to identify the warning signs and red flags that indicate evidence of fraud and fraud risk. CFEs around the world uncover fraud and implement processes to prevent fraud from occurring.

Like how Panama Papers filtered out all American Jews –  same way all these anti-fraud companies are Jew controlled and they actually save KOSHER BIG FISH— a hidden agenda

AS LENIN SAID—THE BEST WAY TO CONTROL THE ENEMY IS TO LEAD THE ENEMY

ALMOST EVERY SHIPPING COMPANY IS USED TO GETTING FALSE INVOICES FROM SUEZ CANAL FOR THINGS LIKE GARBAGE REMOVED , WATCHMEN SERVICES , FRESH WATER SUPPLY , NAVIGATION CHART  SUPPLY , PROVISIONS SUPPLY , SLUDGE REMOVAL ETC.

THESE EGYPTIAN ROGUES KNOW THE RED FLAG TRIGGER OF ALL COMPANIES—MINIMUM AMOUNT IN USD FOR WHICH THERE IS NO MANUAL CHECKING.

THEY KNOW HOW TO FORGE CAPTAINs SIGNATURES AND THEY HAVE FAKE SEALS OF ALMOST EVERY SHIP WHICH HAS TRANSITED THE SUEZ CANAL.    THEY USE SHELL COMPANIES FOR THIS FALSE INVOICE FRAUD .

There are many ways  to cheat an employer --

In billing schemes a company pays invoices an employee fraudulently submits to obtain payments he is not entitled to receive.

There are four major types of such ploys, which are by far the most expensive asset misappropriations.:-------

 Shell company schemes use a fake entity established by a dishonest employee to bill a company for goods or services it does not receive. The employee converts the payment to his or her own benefit.

 Pass-through schemes use a shell company established by an employee to purchase goods or services for the employer, which are then marked up and sold to the employer through the shell. The employee converts the mark-up to his or her own benefit.

 Pay-and-return schemes involve an employee purposely causing an overpayment to a legitimate vendor. When the vendor returns the overpayment to the company, the employee embezzles the refund.

 Personal-purchase schemes consist of an employee’s ordering personal merchandise and charging it to the company. In some instances, the crook keeps the merchandise; other times, he or she returns it for a cash refund.

EVERY EXISTING SHELL COMPANY IN INDIA MUST BE AUDITED EVERY SIX MONTH COMPULSORILY

IF THE AUDIT IS NOT DONE AND FILED THE SHELL COMPANY MUST CEASE TO EXIST AUTOMATICALLY.

THE NAME OF THE AUDITOR MUST BE FROM A GOVT APPROVED LIST

A  fraudster forms the Shell Company using another person's name as the owner ("straw man"). It is common for employees to set up a shell company in the name of a spouse, close relative or friend ( benami ).

Male fraudsters often establish shell companies under their wife's premarital name. An employee might also form a company under a completely fictitious name. Often, the Shell is nothing more than a fabricated name and a post office box or mail drop address that an employee uses to collect the fruits of the fraud.

Typically, the fraudster is in a position to:----

• Authorize the purchase of goods and/or services.

• Approve payment of the goods and/or services.

• Supervise employees who authorize and or pay for the goods and/or services.

Used in an overbilling scheme, the Shell often acts as a "middleman" or "broker" of goods and/or services regularly purchased by the employer. A Shell may also be used to invoice for goods and services never delivered nor rendered. This is  called a false billing scheme.

Purchase Of Goods — The Shell will be set up by the employee to provide goods and/or services to the employer.   The goods are typically not a major purchased item, but still will be substantial in amount. Goods supplied by the Shell will typically be "drop shipped" to the employer by a legitimate manufacturer or wholesaler.  This means that the manufacturer or wholesaler will ship the goods directly to the employer, thus the Shell never takes possession. The manufacturer or wholesaler is instructed to invoice the Shell for these goods. The Shell then invoices the employer for the goods, including a healthy price "mark-up".

Purchase Of Services— In providing services the Shell may have employees or more often will contract out the services to a legitimate supplier. Likewise, the supplier is instructed to invoice the Shell for the services rendered to the employer. The Shell then invoices the employer for the services, again including a healthy "mark-up".

Forming A Shell Company — In order to negotiate payments from the employer and minimize detection of the scheme, the employee will open a bank account in the Shell's name. The documents filed with the bank will list the employee or a co-conspirator as an authorized signer on the account. In order to obtain this information it would be necessary to file a legal action against the "vendor." Since there are sanctions against attorneys for filing frivolous suits, the internal auditor would need to find other evidence discussed below, prior to the initiation of the legal action.

Most banks require evidence that a business has been legally formed. Such evidence includes:-- 

• Articles of Incorporation

• "Assumed Name Act" (or DBA – doing business as ) Certificate

• Partnership Agreement

If you choose to name your business as anything other than your own personal name then you’ll need to register it with the appropriate authorities. This process is known as registering your “Doing Business As” (DBA) name.

These are documents that a fraudster obtains through state or local governmental agencies. This can be accomplished for a small fee, the cost of which will be more than offset by a successful fraud scheme.

Another issue involved in forming a shell company is the entity's address: the place where fraudulent checks will be collected. Often, an employee rents a post office box and lists it as the mailing address of the Shell. Using data analysis software, (such as MS Access or Excel, ACL, Idea, etc.) a listing of addresses using postal boxes can be generated and reviewed for shell companies.

Some employees list their home address instead. A comparison of employee addresses to vendor addresses might reveal shell companies in an accounts payable system. Employees often use their home addresses or mail box drops such as ("MailBoxes, etc." or "Pak-Mail") to collect fraudulent disbursements because many businesses are wary of sending checks to vendors that have a post office box for a mailing address. Likewise, data analysis software can discover vendor addresses that match these mail box drops. Other common collection sites for shell company schemes are the addresses of benami relatives, friends, or accomplices.

Submitting False Invoice — Once the shell has been formed and a bank account established the employee can begin billing his employer. Invoices can be created by numerous means such as a professional printer, a personal computer, or even a typewriter. False invoices do not always need to be of professional quality to generate fraudulent disbursements. Even the most primitive quality invoices are often sufficient to generate checks.

The internal auditor should make a thorough examination of the invoice. Many of these invoices lack telephone numbers, sequential numbering, and other common items found on legitimate invoices. Further, it has been the writer's experience that the invoices typically lack descriptive language.

Investigating the Shell—

Background Investigation — The Internal Auditor should investigate the background of the company and its principals using public records and online tools. Online investigative databases such as ChoicePoint, DataBase Technologies (DBT), and Information America (KnowX) can be used for these searches. Further, many state and local governments are posting public record information on their Internet sites. The Internal Auditor may also use internal or private fraud examiners and/or investigators to perform these searches.

Steps in researching the Shell's background include:--

1. ) Obtaining copies of the suspected Shell's Articles of Incorporation, Partnership Agreement or D/B/A filing from the applicable local government.

2.) Obtaining copies of all annual reports (if incorporated) from the State's Secretary or other applicable office.

3.) Obtaining a copy of the suspected Shell's Dun & Bradstreet ("D&B") full business report.

4.) Searching public records for the suspected Shell and its principal(s), including litigation filings.

5.) Searching the Internet and other relevant business information sources such as business directories, trade journals and directories, Chamber of Commerce listings, etc.

6.) Examining shipping documents, such as bills of lading, to determine the source of goods purchased.

7.) Obtaining fair market values for the goods and or services being purchased from the suspected Shell, by:

a.) Making a pretense call to the identified supplier in step 6, above.

b.) Calling other competitors of the suspected Shell.  

After completing a work-up of the background of the suspected Shell, the Internal Auditor should perform forensic accounting analyses of financial and other documents. In obtaining these documents, the Internal Auditor should be cognizant that the employee may be "tipped off" to the audit.    It is recommended that this portion of the audit appear to be a routine vendor or purchasing review, and other vendors records should be obtained at the same time in an effort not to draw suspicion to the suspected Shell.

Some suggested steps in analyzing the Shell's financial transactions include:---

1.) Obtaining the following internal documents for the suspected Shell:--

a.) History of payments, including invoice number, invoice date, invoice amount, check number for payment and accounting classification,

preferably in an electronic form.

b.) Purchase orders sent to the suspected Shell

c.) Purchase order requisitions

d.) Receiving documents

e.) Other internal files, including:

i.) Bid files

ii.) Purchasing correspondence files

iii.) Operations correspondence files

  

2.) The following analyses should be performed:---

a.) Determine total payments to the suspected Shell for each year.

b.) Sort the invoices by amount to find duplicate payments and unusual amounts.

c.) Sort the invoices by invoice number to determine if a sequential numbering pattern exists and also to identify duplicate payments.

d.) Compare total payments to sales reported to D&B to determine the percentage ofbusiness your organization does with the vendor.  

3.) The following "audit" procedures should be performed:---

a.) Compare quantities received and pricing to the applicable purchase order(s).

b.) Recalculate the billing amounts and math as shown on the invoices.

c.) Determine the individuals who requisitioned the items and completed the purchase orders.

d.) Examine other files to determine any relevant information to the examination. 

4.) Preparation of estimate of damages

a.) Using the fair market value established in the background phase of the examination, compare that amount to the amount paid to determine an estimate of potential damages. 

Vendor On-Site Audit

Of course, the most effective means of concluding a successful investigation of a suspected Shell is an on-site audit of their books and records. This audit is conducted pursuant to a "Right to Audit Clause" discussed above. If such a clause does not exist, the internal auditor should still request the vendor to submit to an audit. It has been the writer's experience that the vendor will often submit voluntarily to the audit. Of course, if the vendor refuses to submit to the audit, then this is a Red Flag that the vendor may be guilty of fraud or some other questionable act.

Included in the appendices to this presentation is a sample audit program used in performing vendor audits. The program is designed for routine vendor audits but may be used in an audit to find fraud.

 In investigating a suspected shell company the Internal Auditor should especially focus on:--

1.) Reviewing the cash disbursements of the vendor, identifying:--

a.) Any payments to employees

b.) Any payments to employee controlled entities

c.) Excessive owner distributions and

d.) Other unusual transactions.

2.) Ascertaining the gross profit of the company on sales made to the employer.

3.) Examining Forms 1099 for any payments to employees or employee controlled entities.

4.) Examining expense reports to identify excessive expenditures for employees.

5.) Determining the "true" ownership of the suspected Shell by examining tax returns,equity accounts, loan documents, or other documents.

6.) Performing a detailed investigative interview to ascertain:

a.) History and background of the suspected Shell, specifically who introduced the company to the employer?

b.) Previous experience and knowledge of the suspected Shell's principals in the industry it serves.

c.) List of employees that the suspected Shell's principals deal with.

d.) Explanations for charges to the employer above fair market value.

e.) Admission as to ownership by the employee. 

Following the vendor audit the Internal Auditor may find it necessary to prepare additional analyses and damage estimates. If there is sufficient predication, the Internal Auditor should review their findings with management and legal counsel for possible prosecution criminally and/or civilly.  An audit report be written to document the work performed.

A shell company is described as a non-trading organization that does not engage in any activity but exists only as medium for another organization’s business activity.   Shell companies are usually listed on the stock and almost all of them are used as a vehicle for illegal activities like tax avoidance or for trying to cover up a trail of money. These companies exist only on paper and have no physical presence.

One of the aims of a shell company is to turn the illegally held money into legal wealth for which tax has been paid and the source is accounted for. These companies are typically created by the person that holds the unaccounted money.

Once these companies are formed the shares are sold at high premium to other businessmen or investors who are aware of the true reason behind the formation of such companies. The buyers or investors are given coveted deals (coal, land, petrol etc) as a reward.

Often companies that want to hide their actual profits buy and sell through shell companies which are based in one of the tax havens. Transacting through these shell companies ensures that the initiating company does not have to report its transactions (due to the country’s tax laws) and hence is successful in avoiding taxes.

Generally infrastructure companies are the most active in this area as these companies are required to bribe a large number of people ranging from politicians to government officials to local mafia. The infrastructure company would pay the shell company X amount through a cheque which would later be returned by the shell company in cash.

This cash is then used to pay the bribe. The shell company covers its tracts by showing it as a payment to other smaller shell companies.

Existence and operations of shell companies has been a cause of concern world wide as not only are they an effective tool for tax avoidance but also aid money laundering for terrorist activities, drug trafficking etc. There are special cells formed by most governments to look into the activities of such companies.

ONLY INDIA HAS BEEN LAGGING BEHIND –THERE HAS BEEN NO POLITICAL WILL

SHELL COMPANIES SHOULD HAVE BEEN CRUSHED MUCH BEFORE INDIA DEMONIZED

WE DID NOT EVEN HAVE THE BALLS TO PREVENT MALLYA OR BHANDARI ESCAPING FROM INDIA-    BOTH ARE HAVING A BLAST IN LONDON --OPEN DEFIANCE 

http://www.firstpost.com/politics/vadras-benami-links-arms-dealer-allegedly-bought-rs-19-cr-london-house-for-robert-2806980.html

An international, inter-governmental body was formed in 1989 for “combating money laundering, terrorist financing and other related threats to the integrity of the international financial system”. 

Known as the Financial Action Task Force (FATF), it has 180 members with India also being a part of it. The FATF has laid down rules and processes to deal with the menace created by such companies.

The Financial Action Task Force (on Money Laundering) (FATF), also known by its French name, Groupe d'action financière (GAFI), is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering..

In 2001 the purpose expanded to act on terrorism financing. The FATF Secretariat is housed at the headquarters of the OECD in Paris.

The Financial Action Task Force on Money Laundering (FATF) was established during the 1989 G7 Summit in Paris to combat the growing problem of money laundering. 

The task force was charged with studying money laundering trends, monitoring legislative, financial and law enforcement activities taken at the national and international level, reporting on compliance, and issuing recommendations and standards to combat money laundering

FATF consists of thirty-five member jurisdictions and two regional organisations, the EU and the Gulf Co-operation Council.   India is part of this group.

The FATF welcomed the Kingdom of Saudi Arabia as an observer to the FATF ( WE ARE TOUCHED –SUCH TENDER MERCIES )

FATF does NOT see how crypto Jew Al Saud dynasty ( installed by Jew Rothschild )  is trying hard to keep a crypto Jew Hadi on the throne in Yemen.

Read all 5 parts of the post below—

http://ajitvadakayil.blogspot.in/2015/04/lawrence-of-arabia-truth-exhumed-capt.html

FATF HAS THE BLINKERS ON WHEN IT COMES TO CATCHING CRIMINAL KOSER BIG FISH WHO USE SHELL COMPANIES ( SALAFI/ WAHABBI KOSHER  FUNDS ) TO FINANCE TERROR..

In India, the money laundering menace is on the rise. During the course of investigations in a large number of recent scams like Coalgate, 2-G Spectrum, CWG links to shell companies has been highlighted.

There are few places like Cayman Islands, Mauritius; Lichtenstein etc which are known for being tax havens, are a favorite with shell companies.

Apart from defrauding the government of large amounts of taxes and aiding dangerous activities these companies are a  cause of concern for small investors.

Capt. Ajit VadakayilFebruary 27, 2017 at 10:51 PM

http://www.aljazeera.com/news/2017/02/helmets-bags-oscar-documentary-170227040950555.html

WHITE HELMETS WERE ENGAGED IN ORGAN TRAFFICKING ( KIDNEYS ETC ) FOR THE JEWS 

WHAT IRONY !

DONALD TRUMP -- THESE ARE THE BASTARDS YOU ARE ABUSING YOU 

http://www.veteranstoday.com/2016/12/29/horrific-details-emerge-of-the-aleppo-rebels-trade-in-human-organs/

ORGAN TRADERS USE SHELL COMPANIES TO TRANSFER BRIBES AND KICKBACKS

THERE HAS BEEN NO ACTION TAKEN .

ALMOST ALL WATCH DOG ORGs ARE RUN BY JEWS

when the WHITE HELMETS got caught with fake videos --they pretended it was a game like ICE BUCKET CHALLENGe.

https://www.youtube.com/watch?v=b8bIupYSZeU

capt ajit vadakayil
..

Many small investors can also get duped by these SHELL companies.  There are a few things which can help you to be better prepared.  It is mandatory to check the existence of any company before investing in it.  If you find that no phone number, email address, postal address or a contact person is listed for the company you should immediately steer away from such an investment.

Often dummy companies will exist only in paper and have no office or staff working for them. Researching their business activity should also give you a clue. Another important thing is to avoid all companies/investment schemes which promise unduly high returns in a short span.

HUMAN GREED IS USED AS A BAIT—IT IS SO GODDAMN EASY TO FIGURE OUT.

Sudipto Sen was the chairman and managing director of the Saradha Group.. In his youth, he was known as Shankaraditya Sen, and was part of the Naxalite movement as per police records

The Sudipta Sen-led chit fund company Saradha Group had decamped with several thousands crores of small-savings deposits from investors by making false claims of their proposed ventures in an attempt to amass more money from the market.

The Registrar of Companies (RoC) unearthed serious irregularities in the accounts of Sudipta Sen's Saradha Group of firms involving diversion of funds collected from investors into shell companies without any visible business activity.   

Saradha Group has also been showing cross-loans among group companies in its books to create a maze of financial transactions to cover up the scam

During the financial year ended March 31, 2012, Saradha Construction received long-term advances of from Saradha Realty. Interestingly, the accounts also show a reverse loan being extended by Saradha Construction to Saradha Realty.  Misuse of funds was covered up by showing them as advances to someone

The Saradha group tricked mostly small investor and siphoned of more than 17000 crores . As per an estimate there are almost 60 such firms operational is Bengal alone, some may be registered some may not be.

As an investor and a responsible citizen it pays to remain informed and follow small rules like insisting on receipts, avoiding multiple cash transactions etc.

When you are investing your hard-earned money, go the extra mile, research and then invest!  Don’t fall for very high returns . This will be a scam -100%

More than 70% of the money held in accounts in Swiss banks is under the names of shell corporations.

In most places you don't have to attach your name to a shell corporation, making it virtually impossible for tax authorities or law enforcement officials to tell who owns it. But if you really want to cover your tracks, you can set up interlocking shell companies in different places, such as the British Virgin Islands or Bermuda, Cardamone says.

You can create an anonymous shell in one jurisdiction that controls an anonymous trust in a completely different country that also controls a bank account in a third country..

Once your shell company is up and running, you can use it to stash any spare millions you may have lying around.

Now you're the owner of a company that can open, for instance, bank accounts all over the world. Or that can buy real estate all over the world. It makes it easy for you to hide your identity and to be an anonymous owner of wealth all over the world

Africa loses more money through illicit financial flows than it receives in aid and investment combined.   The setting up of shell companies is the vehicle of tax evasion and avoidance, because it creates a barrier for any kind of investigation into tax payments. In Kenya most major corruption scandals are linked to shell companies,

In 2005, a tour boat called the Ethan Allen sank in New York’s Lake George, drowning 20 elderly tourists. After the survivors and families of the dead sued, they learned the tour company had no insurance because fraudsters had sold it a fake policy using shell companies . This is the tip of the iceberg.  This fraud goes on.  If you die don’t think your private insurance will pay up.

https://www.linkedin.com/pulse/construction-fraud-how-shell-companies-taking-soft-market-eiserman

Banks are no longer just financing heavy industry. They are actually buying it up and inventing bigger, bolder and scarier scams than ever .   In Indian these foreign kosher banks are neck deep in all sorts of scams will willing participation of the Indian bank managers. 

The govt pretends it does not know—see they are BABES IN THE WOODS –right ?

According to US Senate investigators, Apple makes use of "ghost companies," incorporated in Ireland as "a conduit for shifting billions of dollars in income from the U.S." From 2009 to 2012, Apple booked $30 billion in income to a subsidiary called Apple Operations International, an entity with no official employees.

But thanks to overlapping loopholes in Irish and American tax law, AOI has not been forced to declare itself a tax resident of either country. As a result, for the past five years, it filed no returns, and its profits weren't taxed by any government.

The real problem with multinational corporate tax avoidance is not that the firms are breaking the law. It's that the law itself is broken. "Most of what they're doing is completely legal," says a top Senate tax staffer. "The problem is with the system that allows them to do it."

We ask the Indian govt to ban shell companies.  We don’t need to learn from white nations—who extol the IMAGINARY legitimate uses of shell companies. 

Crack down on the use of shell companies inside this country –these are just getaway cars for criminals.

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Govt may shut down 7 lakh shell companies in war on black cash

Pradeep Thakur | TNN | Updated: Feb 28, 2017, 05.08 AM IST

NEW DELHI: The government has expanded the ambit of its fight against black money and is looking to curb institutional money laundering by shutting down "dormant" companies, suspected to be anywhere between 6 to 7 lakh. Many of these firms had carried out high-value transactions and deposited huge amounts of cash in banks following demonetisation of high-value currency notes.

Cleansing the list of 15 lakh registered companies is in itself a huge task since the suspected entities constitute more than 40% of the total registered firms in India. The government has involved multiple agencies with the Central Board of Direct Taxes (CBDT) playing a key role. A senior CBDT official said the I-T department has gathered information on shell companies which made huge deposits in the twomonth period post-demonetisation when companies and individuals were allowed to deposit scrapped notes of Rs 500 and Rs 1,000 in banks.

One more hit on the Congress who did nothing to prevent this but must have encouraged to flourish for black money generation..Govt should also punish these companies for generating a parallel economy..

The I-T department also gathered a wealth of information on these "dormant" companies. These firms had managed to remain under the radar till now by not filing annual returns with the Registrar of Companies (RoC). The government has involved all major revenue intelligence agencies in the exercise, besides the Security and Exchange Board of India, the RBI, the Intelligence Bureau and the corporate affairs ministry, the official said. The CBDT is believed to have impressed upon the government that once these 6-7 lakh dormant firms are deregistered, it could bring an end to "institutional money laundering" in the country.

Shell companies have no actual business operation or assets. They are merely used by "entry operators" to launder money on behalf of clients. The CBDT has prepared an integrated databank of suspected shell companies and entry operators and is in the process of matching recent banking transactions with other suspect "dormant" companies. The data also includes information gathered from property registration, suspicious transaction reports shared by the Financial Intelligence Unit and foreign bank accounts. This data was further identified against PAN and registered address of suspected entities.

Stay updated on the go with Times of India News App. Click here to download it for your device.

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THIS POST IS NOW CONTINUED TO PART 7 , BELOW--

http://ajitvadakayil.blogspot.in/2017/02/shell-companies-for-money-laundering_65.html

CAPT AJIT VADAKAYIL
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