Author Topic: The Swiss Lawyers Who Help Europe’s Richest Families Park Their Wealth Offshore  (Read 3183 times)

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Thyssen, Sachs and Rothschild are among Switzerland’s largest law firm clients.

Little did Zurich-based lawyer Peter Hafter imagine how things would turn out when he ordered a $2,700 offshore kit to create a front company in the Cook Islands on September 13, 1993. Twenty years on from that day, the fax he sent, the ensuing emails and all his business correspondence with Portcullis TrustNet in Rarotonga, the largest island in the archipelago, have been copied and passed on to journalists around the world.

Nor did the lawyer imagine that the internal revenue service would then reopen the case of one of his clients, and yet that is precisely what the spokesperson for the tax authorities in Berne, Yvonne von Kauffungen, announced on Thursday. This announcement was triggered by the publication of a preview based on our investigations into two decades of correspondence between Portcullis TrustNet and Peter Hafter.

Matin Dimanche and SonntagsZeitung have reviewed hundreds of pages of confidential documents that are part of a cache of 2.5 million files obtained by the International Consortium of Investigative Journalists – probably the largest set of confidential financial data ever disclosed to the media.
Switzerland under pressure

The files offer a first ever glimpse of how Swiss lawyers and trusts from Geneva to St. Gallen helped clients the world over establish offshore firms and trusts to protect their assets from the taxman or over-zealous heirs. “People don’t set up this kind of structure out of altruism, but to gain a profit,” says Christian Wanner, one of Switzerland’s leading authorities on tax collection.

The offshore files show the role not only of Swiss banks but also of Swiss lawyers in helping foreign clients set up secretive offshore entities.

“Someone who has set up dozens of offshore firms for foreign clients obviously risks becoming a target for foreign tax inspectors,” predicts Beat von Rechenberg, the president of the Swiss Bar Association. Of his 9,000 members he estimates that only two to three hundred are likely to be involved. “But, a bit like banking, our profession is going through a paradigm shift,” Beat von Rechenberg says.

Let’s go back to our lawyer and his fax. He is just one of the many Swiss middlemen who feature in the offshore files. The documents show how Peter Hafter helped arrange the financial affairs of some of Europe’s wealthiest individuals – for example the banker Elie de Rothschild and industrialist Hans Heinrich Thyssen – by setting up business entities in tax havens such as Panama, the British Virgin Islands, Luxembourg and Liechtenstein. This is known as “asset protection” in commercial legalese, but some experts say it’s tax avoidance and evasion.

Peter Hafter, who is now 83, is not just anyone. Prior to his recent and gradual retirement, he was one of the mainstays of Lenz & Staehelin, the largest law firm in Switzerland, which has offices in Geneva, Lausanne and Zurich. It employs more than 150 attorneys.

On September 15, 1993 Peter Hafter called for the first time – but by no means the last – on the services on Portcullis TrustNet. From Zurich, over 10,500 miles away, he opened a limited liability company called Triton Limited on the island of Rarotonga, somewhere in the middle of the South Pacific between New Zealand and Hawaii. His client? The famous Gunter Sachs, a German-born photographer and heir to the Opel dynasty (Opel cars), Brigitte Bardot’s ex-husband and a Swiss citizen since 1976. Yet Gunter Sachs does not feature in any of Triton’s official documentation. Its directors are Peter Hafter and two of Sachs’ trusted associates. On paper it is they who own the company’s 2,000 bearer shares.

Peter Hafter also set up a second front company called Tantris Limited along with four trusts – Parkland Oak, Moon Crystal, Espan Water and Sequoia – all of them incorporated in the Cook Islands between May 18, 1994 and July 22, 1996. These firms were created to host a substantial share of Gunter Sachs’s fortune. Peter Hafter is a trustee of all four, meaning that he is not acting for himself, but for the beneficiaries – who are none other than Rolf, Christian Gunnar and Claus Alexander “Halifax”, Sachs’s three sons. Yet, Gunter Sachs himself was a beneficiary of at least two of the funds and thus had access to the money.
Trusts run from Geneva

A “special arrangement” was found to keep the name of the settlor (Gunter Sachs) secret according to a memo dated April 4, 1999. He was therefore swathed in secrecy, anonymous amid the anonymity of the Cook Islands. He retained control of the funds, though, which were managed until his death by a Geneva-based company called Galaxar SA. Another trust, Triton Trust, was set up as late as April 2007.

Things began to heat up in 2008 when Gunter Sachs moved his domicile back to Switzerland after a brief interlude in London. Lenz & Staehelin prepared a dossier for the Swiss tax authorities in which Sachs declared a fortune of around $500 million. However, the most recent tax returns reviewed by Matin Dimanche and SonntagsZeitung make no mention of any of the five trusts, or the two front companies, or the firm in Panama.

Nor is there anything about several other companies belonging to Gunter Sachs, despite official documents proving that they contained millions of dollars’ worth of assets. This is notably the case of K-Buchs and K-Erlen, both registered in Luxembourg and both absent from his tax return. According to some of his former friends, the photographer was at least as good a businessman as he was a ladies’ man, and former Galaxar employees hint that he had “much more” than the $500 million he declared to the tax authorities in Berne. Despite his flourishing business, Sachs paid no income tax in Switzerland, just $3 million in wealth tax.

A further eyebrow-raiser is the photographer’s inheritance inventory, which was drawn up by his Swiss attorneys and is dated July 2012. This document estimates the value of the works of art belonging to Sachs at only $51 million. Yet six weeks earlier, on May 22 and 23, 2012, Sotheby’s of London sold 260 pieces from the photographer’s private collection – only a part of the whole – for far more than that, fetching $65.5 million. A self-portrait of Andy Warhol from 1986 sold for $8.5 million, a flower painting went for $5.8 million, and a portrait of Brigitte Bardot, also by Warhol, was auctioned for $4.8 million. There is no trace of the income from these sales in the tax documents we have seen.

http://www.icij.org/offshore/swiss-lawyers-who-help-europes-richest-families-park-their-wealth-offshore