Crazy Idea - Use offshore broker/fund manager as bank account.

[Montecristo]

Hi folks.

I spoke to a fund manager in HK. I was told something interesting. He said that he accepts clients who have at least US$1m of deposit and basically the clients will send money to the sub-account of their fund management account. He will do all the KYC clearance instead of the bank. I asked him in a very direct manner. In that case, what is stopping him from becoming a money launderer? He said nothing stopping him. This is a regulated fund manager from a reputable jurisdiction and I was surprised to hear that. But anyone of us toying around with the idea of using offshore brokerages or offshore fund management company to hold cash?

 

[negon]

Well it is still Hong Kong and to transfer $1M to a fund manager there would be naive. I would not do that unless I had meat him in person a few times and even then I would not do that. What should stop him from taking the money and disappear at any time?

We have seen that happen many times!

 

[Montecristo]

auric said:
Well it is still Hong Kong and to transfer $1M to a fund manager there would be naive. I would not do that unless I had meat him in person a few times and even then I would not do that. What should stop him from taking the money and disappear at any time?

We have seen that happen many times!
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Auric, your are right to say that. But the fact that this statement came from a licensed fund manager, it seems to me it is no different from a bucket shop. However, if trasnfer in $1m into a licensed offshore brokerage acct that has minimal KYC, I am fine to do so.

 

[orangeye]

I agree with both of you. However, it is still Hong Kong. I have friends who got cheated for 500k with promises he get his money back again. Others have reported they made money with some of the top professionals in HK and after a while their money suddenly disappeared! I would not trust anything (licensed or unlicensed) in Hong Kong with that kind of money. A few thousands is fine I can handle to loose it but $1 million never it's gonna happen!

 

[JohnLocke]

Montecristo said:
In that case, what is stopping him from becoming a money launderer?
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And you don't think this just fired him directly on the watchlist of the FBI / CIA ?

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[utibi]

OP if you send them 1M$ please update how it is going... I find it risky with that much Money. I don't have this amount but if then I would look for someone nearby.

 

[JohnK]

Indeed crazy 🙂 If you test this broker I agree, please post your experience here.

 

[NickNack]

Hey guys. This kind of structure can be called an Omnibus account, and we have partners that do something similar in the US, however no money laundering allowed. There is structured KYC set in place by the fund as well as the banks that do the transactions. But this does exist, however having 1 million in the account is absurd.

 

[mnschwarz]

I do this with a brokerage account in Colombia. Works a treat. There was still a simple KYC process but was quite painless.

 

[Montecristo]

Admin said:
And you don't think this just fired him directly on the watchlist of the FBI / CIA ?
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How can I fire him directly on the watchlist of FBI / CIA?

Don't think the CIA or FBI will be interested in doing this kind of case. Unless the case is as big as 1MDB, it is a different animal. I do know fund managers that do money laundering for a living.

 

[redeye]

That's pretty much interesting I must say! But how you guys trust a person from Hong Kong or Colombia so much money? If any of them deal with US citizen and he is doing million of dollars in money laundering then I'm sure he is on some authorities watch list?!

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Only the early bird catches the worm.

 

[Montecristo]

redeye said:
That's pretty much interesting I must say! But how you guys trust a person from Hong Kong or Colombia so much money? If any of them deal with US citizen and he is doing million of dollars in money laundering then I'm sure he is on some authorities watch list?!
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For US citizens, it is not that easy. But with Donald Trump, you never know what he will do next.

 

[JohnK]

Montecristo said:
For US citizens, it is not that easy. But with Donald Trump, you never know what he will do next.
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LoL no that's true. Maybe he close the US banks for foreigners that want to open an account there!

 

[Montecristo]

JohnK said:
LoL no that's true. Maybe he close the US banks for foreigners that want to open an account there!
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The reverse is happening in the US. I was told by a banker, he said the US is the new money laundering haven in the world for non-US citizens. The funny thing about FATCA is other countries are required to report US citizens to the US when they have accounts in overseas. But there is no rules to state that the US will report the non-US citizens who have accounts in US to their respective countries.

 

[cutmetwo]

Montecristo said:
But there is no rules to state that the US will report the non-US citizens who have accounts in US to their respective countries.
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That's something we will need to research. It's interesting. I believe everything in the US get reported and tracked! Exception seems to be Rhino which I read is the new tax haven in the USA for US citizens!

 

[JohnSeed]

Do you guys know what will happen with the CRS (reporting crap) with such an trust account?