Pop Quiz: What do Yale University, HSBC and a Small Island have in Common?

offshore tax fraudA vacation paradise, the small island of Mauritius has rainforest, waterfalls, idyllic beaches, and plenty of shade for offshore tax fraud.


In 2019, the International Consortium of Investigative Journalists (ICIJ) published a report on the use of Mauritius as an offshore tax haven, and a very opaque one at that. The report is based on the whistleblower leak of approximately 200,000 documents from a law firm, Conyers Dill and Pearman, which has a global presence in financial and asset management markets.


The ICIJ has emerged as a powerful investigative go-to for those with information and data about global abuses of many stripes. The independent non-profit has a network of about 250 highly-rated investigative journalists working around the world. Originally launched in 1997, the ICIJ hit the front pages with the Panama Papers report, which describes the worldwide use of secrecy havens to shield wealth, oftentimes from legitimate taxing entities.


Like the Panama Papers, the Mauritius report relies on an unnamed whistleblower who turned over transactional documents and correspondence from a law firm deeply embedded in the global flow of investment funds around the world.   


The ascent of Mauritius from a third-world agricultural community to the sparkling “gateway to Africa,” is similar to that of the European country of Luxembourg. The governments of both countries improved their regional positions through development efforts aimed at international finance. The strategy, involving the creation of preferential tax laws and regulations, is a resounding success for each country. Unfortunately, these tactics often hide and funnel tax dollars away from countries where monies are legitimately owed—and needed.


Simply put, companies and individuals around the world invest in Mauritius to avoid paying taxes on wealth.  The ICIJ compiled and recently released a list of the companies, such as Yale University, who use the island to avoid paying taxes elsewhere. Some of those companies or holding companies include:


  • Aerospace Finance Limited
  • Mayo Clinic GBS Mauritius
  • HSBC Bangkok Branch
  • Western Energy Production, LLC
  • Whirlpool
  • Pegasus Capital Advisors


According to an investigative report by Quartz, Mauritius is listed as a top abusive secrecy jurisdiction by the EU and by Oxfam.


Making dollars by depriving countries of legitimate tax revenue widens and supports the gap between the super-rich and the impoverished.  While there is no downward trend in the behavior, the disclosure of the practices of companies and countries who engage in it fuels investigation and consideration of investment in companies that promote fairness instead of tax fraud.


Speak with an experienced tax lawyer for skilled guidance with tax controversy or allegations of tax crime

Delivering high caliber legal service to clients around the world from offices in Chicago and Cleveland, Illinois, Robert J. Fedor, Esq. LLC can help you at any stage of a tax concern. Contact us or call 800.579.0997 today.


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