Module 2 CASE STUDY
Module 2 CASE STUDY
In Module 1, you learned about: The misuse of legal persons and legal arrangements to conceal the proceeds of financial crimes and, the definition of beneficial ownership In Module 2, you will have the opportunity to: Review these key concepts through an actual case study of a transnational scheme that misused shell companies and a trust formed in multiple jurisdictions
FACTS:
• Chen Shui-Bian, the former President of Taiwan, China • Corruption case, involving him and his family members • Proceeds of corruption used to buy properties in the United States • Transnational scheme:
• Use of multiple legal structures; legal persons and legal arrangement • Use of offshore bank accounts
SOURCES – h#ps://star.worldbank.org/corrup6on-‐cases/sites/corrup6on-‐cases/files/
Chen_US_Jus6ce_Dept_PR_Jul_14_2010.pdf – h#p://www.jus6ce.gov/opa/pr/us-‐forfeits-‐21-‐million-‐worth-‐property-‐purchased-‐alleged-‐bribes-‐paid-‐family-‐
former-‐president
The Chen Shui-Bian Case
The Chen Shui-Bian Case (i) CORRUPTION IN TAIWAN, CHINA
A. Corruption payment
of approximately US $6 million in Taiwan, China
The Chen Shui-Bian Case (ii) TRANSFER OF FUNDS
A.
B. Transfer of illicit funds from Taiwan, China to Switzerland (via Hong Kong SAR, China)
The Chen Shui-Bian Case (iii) MISUSE OF LEGAL STRUCTURES
A.
B.
Formation of a trust in St. Kitts & Nevis and British Virgin Islands (BVI) shell company, using services of a Miami based lawyer
C. D.
E. Manha(an Condominium owned by West 28th Street LLC
F. House in Virginia owned by Pegasus Virginia LLC
The Chen Shui-Bian Case (iv) PURCHASE OF PROPERTIES
Beneficial Owner Chen Shui-Bian
Avallo Ltd—Bank Account Wegelin and Company Private Bank Jurisdiction: Switzerland Signatory Authorities: Cheng Chi-Chung (Son) and Wu Sue-Jen (Wife)
Knight Square Irrevocable Trust Jurisdiction: Island of Nevis Owns: Avallo Ltd Trustee: Global Fiduciaries Ltd Beneficiary: Huang Jui-Ching (Daughter in Law)
Avallo Ltd Jurisdiction of incorporation: British Virgin Islands Owns: Avallo Ltd Trustee: West 28th Street, LLC
West 28th Street, LLC Jurisdiction of incorporation: United States—New York Owns: West 28th Street, Unit 5B
TRUST
LTD
LLC
Property West 28th Street, Unit 5B
The Chen Shui-Bian Case
West 28th Street, Unit 5B
OWNERSHIP STRUCTURE
The Chen Shui-Bian Case MULTIPLE LAYERS
THE CHEN CASE USED… Multiple structures • Shell Companies • A Trust • Offshore Bank Accounts
Across multiple jurisdictions • Taiwan, China • Switzerland • St Kitts and Nevis • British Virgin Islands
Involving several family members, acting as nominees/intermediaries including; • Wu Sue-Jen (Wife) • Cheng Chi-Chung (Son) • Huang Jui-Ching (Daughter in Law)
Congratulations!
You have successfully completed Module 2. Now go to Module 3 to review Tools for Transparency.