Post: #1

Heres for detailing stories of confiscation. Ill start.

A family friend who lives in Moscow got an Russian warrant/interpol alert put out. He flew to London the day before (from advice from lawyers) and is now living there.

Was a oil upper-management executive in a big Russian oil company which started in the 90s. Today the oil company has >5 billion yearly income. He got out in the late 90s, but starting running an oil refinery, real estate and other interests.

Theory is that he pissed off the wrong people or refused to sell out his oil-shares to well-connected political group and basically they took it by intimidation/force.

I didn't get all the details, but i would say he lost 30-45 million euros in his Russian business/estates (which are under lien). Luckily, Russian elites know their situation is always tenuous at best and stash money abroad. He has houses in top-shelf EU cities and bank accounts abroad ie. a 5 million EU house in nice, a mansion in spain, big giant house in London. This situation is common among the Russian elites who distrust paper currency.... (The living joke is top-shelf london is arabs and russians).

Basically, hes sitting out in London, spending dough, living well off his left-over investments.

I foresee a continued flow of in uber-rich emigration from these resource-rich, but extremely corrupt countries. China, Russia and Brazil(speculating).

Whats your guys stories? Stories that you have heard?

Post: #2

I am seeing a bit of this with some Chinese friends that I went to school with.

The recent crack down on corruption looks good to international governments and businesses but I think the reality is a bit more shady. It seems to be a transfer of wealth from some early elites (late 90's) to current elites.

From experience these peoples fathers have been shoveling money out for a quite some time, and now the Chinese government has made a loud and clear statement that its time for the next people to make some bank.

It will be interesting to see how this plays out, and how fast and safely the wealth can be transferred to their children without any mess.

I dont have any particular stories on authority confiscation but I am sure that when someone is able to make millions there will be a good many hands out for their share. When greed becomes the norm, the other people in line will be sure to use whatever means necessary to get what they think they are entitled to.

Post: #3

Apologies to your friend. Honestly where is anyones money safe? I'm curious if we'll see a "bail in" in the US similarly to what was seen in Cyprus.

You gotta have friends in high places where ever you are. What's the safest country to avoid stuff like this?

Post: #4

I actually got more details on how this confiscation was done.

Somebody forged his signature on the sale agreement and sold his 50M+(cashflowing at 7-10MM/year) company for 4M to a 23 yr old businessman. This guy had bought around 250MM in companies from age 21 to 23 and basically didn't exist before that. (Real value is probably 10x that). Lot of very suspicious transactions. Their theory is that he is a KGB front-guy.

They were in courts trying to battle it out, and the lawyer told him that it was unsafe to live in Russia anymore. Next day after he is in London, Russian warrants for fraud and Interpol alert. His Russian passport was shortly thereafter suspended.

My family friend is still trying to sue in courts . His law bill is around 7MM and counting. Fraud investigation continued (after he refused to take the robbery smoothly and continued in courts) and they seized all his Russian real estate (net value of 100MM).

Basically he got robbed for 150MM.

Post: #5

@laner- considering you are based in Vancouver, I expect you'll be seeing a nice boom in real estate from all the dirty chinese money.

Post: #6

Damn that is steep. Doing business in Canada can be a headache, but at least shit like that is not even remotely on my concern radar.

Quote:@laner- considering you are based in Vancouver, I expect you'll be seeing a nice boom in real estate from all the dirty chinese money.

Unfortunately I am in the real estate market in the $600-$800k so I am way under the market where these Chinese play. If I was in the $5mil+ range then I would be laughing prices went way up this year in that market.

In my building I am stuck with the unwanted daughters, students, and language kids from the wealthy but not the wealthy themselves.

Post: #7

well thats russia nothing new, been going on for years. The average russian doesnt even give a fuck. A lot of dividing and power grabs went on when the ussr broke up in the 90s, read a book on it, the author said often he would be driving to an interview to an oligarch and would get a phone call on the way there that he just got shot. The new rich were called "Noviye Russkie" meaning new russians. Here is a grave stone, lots of young guys lost their lives in the game for power.



Once shit settled it was pretty much free money, aside from having to watch your back. CEOs are rich mofos, but they live their work, these guys mostly just watched the money roll in. As a result russian industry stagnated. The oil companies where not trying new drilling methods, the auto guys kept building the same car from 1960. Money was not reinvested, rather stolen and spent elsewhere. Hence after a while there was a crack down on the oligachs. Anyone who got rich in the 90s walked this path, not every one was hiring assasins, but you had to step on some people and screw people over. I think the kasparsky guy is the only guy that I know of that stayed and built his own successful business in those years (mayeb with the help of kgb). The ones that didnt want to play that game left since there was nothing left and better opportunity elsewhere, hence the "brain drain", giving another blow to the country.
Its the name of the game, he should of built or restored more protestant churches in podmoskovya. Not saying your friend was part of the zeitgeist, just saying why his story wont even raise a brow on the average russian..

Post: #8

I don't have any affected friends but I know enough about the IRS to know that civil forfeiture via police action is much more dangerous. There are many days and many ways that one can hold off the IRS from seizing assets and placing liens on things.

The 'new' risk is that the tax man will be able to find those that are on the run internationally with new ease via forcing foreign banks to withhold and report on us citizens using their accounts. The systems are all in place and ready to start rolling Jan 1 2015.

Post: #9

Your Russian friend is lucky to be alive. They don't fuck around over there. I'm also guessing he knew exactly what he was getting involved in, so much like joining the Mafia, you can't bitch when the consequences come.
As for anything I personally know about? A Pakistani tribal leader/businessman who moved to Vancouver when a coup happened. A Venezuelan friend whose family keeps their money in Panama and has significant property in Miami and France. In both cases, they have narrowly avoided losing a century or more of accumulated wealth.
And the IRS is very different, they actually follow laws most of the time. Any legal proceeding in Russia or Venezuela is a joke, and used only to put the thinnest of veneers on state sponsored theft. They don't even try to make it look completely legit, as that would blunt the raw demonstration of power.

Post: #10

It's a common story. Basically, one's assets in Russia are not really owned until those assets are sold, the proceeds transferred out of Russia, and that person has left the country.

Hermitage Capital (William Browder) was the butt of many jokes for years until it was finally shut down. His strategy was to buy an asset from the state, claim that its management was stealing 90% of the profit, then watch his fund's stock price skyrocket. He never had any political backing, so as soon as he and his fund showed up on the radar it was confiscated and shut down.

The only asset which is mostly untouchable is the property that a Russian citizen is registered in.

Post: #11

News twist is that Russian sanctions means that US/IRS is seizing russian owned oligarch property/bank accounts to put the squeeze on. Watch your $

Post: #12

(12-11-2014 05:22 AM)DaveR Wrote:  It's a common story. Basically, one's assets in Russia are not really owned until those assets are sold, the proceeds transferred out of Russia, and that person has left the country.

Hermitage Capital (William Browder) was the butt of many jokes for years until it was finally shut down. His strategy was to buy an asset from the state, claim that its management was stealing 90% of the profit, then watch his fund's stock price skyrocket. He never had any political backing, so as soon as he and his fund showed up on the radar it was confiscated and shut down.

The only asset which is mostly untouchable is the property that a Russian citizen is registered in.

And what effect do you think that has on their economy? (hypothetical question). It's massively detrimental because no investment is secure, which means nobody leaves money in Russia.


The follow up point is that is why the rule of law is important. When you have rampant corruption it stifles productivity, which stifles the earning potential of everyone from fast food workers and farmers all the way up to elites.....and how much time does America have left until money starts fleeing out corrupt government for greener pastures?

Post: #13

(12-01-2014 02:19 PM)The Beast1 Wrote:  Apologies to your friend. Honestly where is anyones money safe? I'm curious if we'll see a "bail in" in the US similarly to what was seen in Cyprus.

You gotta have friends in high places where ever you are. What's the safest country to avoid stuff like this?

Norwegian banks guarantee for your money up to 500k usd+ if i'm not wrong, and politicially Norways amongst the most stable countries in western Europe - the foreign wealth fund is huge, so doubtful that any defaults would happen any time soon.. Now tax wise i'm sure you can find better places, but talking just security.. It could be an option. Now the Norwegian currency is quite weak at the moment, 8,40kr to a dollar, around 12kr for a pound, but it used to be a lot stronger just a couple years back; 10kr for a pound, 6kr for a dollar.. I held some investments in the dollar so made a killing when the NOK declined.. Might be an idea to invest long term, the economy is strong and quite diversified, - and the krone will undoubtedly strengthen as soon as oil prices start to recover, but hey just my thoughts, don't act on it without thorough research!

Marlo

Post: #14

Panama Papers is a whole another twist in this story.