Hong Kong firm at core of fraud that sparked investigation into tax havens
Discovery of scam led to three-year inquiry that uncovered huge trove of tax-haven data
A huge trove of tax-haven data uncovered by the International Consortium of Investigative Journalists (ICIJ) is the result of a three-year investigation by its director, Gerard Ryle, into one of Australia's biggest frauds.
That fraud involved a Hong Kong-based firm called Firepower International and offshore havens. Through connections with Australian officials, the governments of Britain, Russia, Romania and other nations were persuaded to believe Firepower had solutions to global warming and the energy crisis. After the fraud was discovered, Firepower's Australian operations were liquidated in 2008.
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The Australian investigation yielded one of the biggest collections of leaked data gathered by journalists, the ICIJ said. The offshore information totalled more than 260 gigabytes of data and more than two million e-mails. The data originated in 10 offshore jurisdictions, including the British Virgin Islands (BVI), Cook Islands and Singapore. It included details of more than 122,000 offshore companies or trusts, and 130,000 records on the people and agents who run, own, benefit from or hide behind offshore companies.
A large number of positions are held by "nominee directors", people who, for a fee, lend their names as office holders of companies they know little about. It is a legal device widely used in the offshore world.
To analyse such a trove of information, ICIJ investigators used text retrieval software able to handle vast volumes of data.
"I'm surprised they got the information, because it is really quite protected," said John Bruce, director of operations at Hill & Associates, a Hong Kong risk consultancy.
