SCOTTISH firms are being used as fronts for agencies who help international tax dodgers open Swiss bank accounts, the Sunday Herald can reveal.
Companies formally registered in Scotland are offering so-called "wealth protection" services, including offshore banking for non-residents and what they call "tax optimisation".
The firms fronting for such services are themselves Scottish limited partnerships or SLPs, a kind of business that, thanks to a century-old legal loophole, are effectively able to have secret owners, pay no tax and file no accounts.
A former senior detective last night warned that gangsters were seeking to "exploit the SLP process for money-laundering and illegitimate trading purposes".
The Sunday Herald over the last two years has linked such firms to a whole series of corruption scandals across the former Soviet Union, including their use by Ukraine's "arms mafia", and websites hosting child sex abuse images.
Zurich: home of Swiss bank accounts on offer from Scotland
SNP, Labour, Liberal Democrat and Green politicians and aid organisation Oxfam are all currently calling on the UK government to review SLPs, control over which is reserved.
Now SLPs are being set up to front multi-language websites both selling other SLPs off-the-peg – and not just in their traditional former USSR market – and offering to help clients open offshore bank accounts.
One, Defence Capital LP, based at a modest address in Dundee that is home to a large number of SLPs, openly boasts on its website in English and Russian that it can facilitate the opening of bank accounts in Switzerland, Andorra, Latvia and England, and manage "discrete funds" in the notorious tax havens of Panama and Liechtenstein. It also says it can help wealthy families relocate to Latvia, Malta and Andorra.
The firm says: "Defence Capital LP specialises in work with well-off families, concentrating its attention on the provision of carefully thought out decisions that allow one to save, increase and pass on accumulated capital to the next generations."
Defence Capital does not appear to have any physical presence in the UK, despite using its Dundee PO Box. It does not have a telephone number. The Sunday Herald emailed the business to ask it to explain how its services complied with traditional Scottish business ethics. The company did not respond.
The Defence Capital website is registered in Riga, Latvia, by a man called Sergejs Kartasovs. A former private banker from Riga called Sergei Kartashov, the Russian version of the same name, is listed on Linked-in as having been managing director of Defence Capital since November 2015. The SLP itself was incorporated in October 2015 using the classic model of having two partners from the traditional tax haven of Dominica. Provided it does not do business in the UK, Defence Capital, can effectively avoid taxation while advising its clients on how to do the same.
Another SLP, Gorinity Project, is also marketing its ability to provide Swiss and other offshore bank accounts. This business is registered at a flat in Edinburgh, 78 Montgomery Street, that has been home to thousands of SLPs and other businesses.
The company is currently offering to set clients up with their own off-the-peg SLP complete with an offshore bank account in a Czech bank for 1950 euros in a week. It tells would be clients there is no need to meet in person. Gorinity Project also says it can courier a whole new Scottish company to clients for 600 euros, complete with power of attorney over the nominee offshore directors, within 24 hours.
Special offer: Gorinity sells SLPs and offshore bank account in a week
It also offers to help open accounts at AP Anlage & Privatbank, in Switzerland, the subsidiary of a Latvian bank which says if focuses on providing accounts to residents of the former Soviet Union.
Gorinity Project's London telephone number is disconnected. It does not appear have a UK physical presence. The Sunday Herald wrote to the firm asking for comment. It did not respond.
The company also appears to operate out of Riga, Latvia.
US and other international regulators are currently putting pressure on Latvia to clamp down on money-laundering and tax evasion through private non-resident banking sector.
Law enforcement figures are concerned that the company agencies are not checking to whom they are selling off-the-peg SLPs.
Graham Vance, a veteran detective who now works for the police and government-funded Scottish Business Resilience Centre, said: "Agents who set up limited partnerships should carry out as much due diligence as they possible can about individuals and organisations that are likely to be involved either as general or limited partners.
"They should do as much as they can to make sure that everyone and every organisation is legitimate because criminal organisations in the UK and beyond will seek to exploit the SLP process for money laundering and illegitimate trading purposes."
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