Deloitte falsified documents to hide $672m of Abramovich's assets and evade tax
Deloitte falsified documents to evade tax on Abramovich's wealth
A BBC Panorama and Bureau of Investigative Journalism investigation found that Deloitte Cyprus signed off backdated accounts that made superyachts, mansions, and private jets worth $672m vanish from Roman Abramovich's company records. Leaked documents from MeritServus, a Cyprus corporate services firm, show Deloitte reviewed and approved the falsified paperwork, and apparently advised on a scheme to evade millions in tax on nearly $2bn in interest income. Deloitte denies wrongdoing, and Abramovich's lawyers say he was not involved in day-to-day operations.
What you take away from it is there are professionals who are prepared to bend and break the rules of their profession and therefore the law. And it looks that they will stop literally at nothing in terms of creating documents.
- alsetmusic
> Deloitte Cyprus said it could not comment on the specific allegations because the documents were more than 20 years old and no longer accessible.
That's convenient.
Also, I received a similar response when inquiring about a financial account that had been overlooked (there are reasons, I'm not getting into it) for a couple of decades. "Can't help you. Too old for us to have records." Well, my records are printed documents. Why can't you tell me anything? Reminds me of when the USA government stole my money from a bank transfer claiming suspicion of whatever (my landlord had a Middle Eastern sounding name and it was the 2000s) and then said they had no record of it when I provided all the required documentation to recover it.
In both cases, unfortunately, I concluded that the odds are so stacked against me that I gave up. Convenient system if you're fabulously wealthy or a massive org (such as corporations and government).
- Izmaki
Deloitte has got, I've heard (!), in their training material a section about integrity and how important it is to act ethically correct. Deloitte also does sh*t like this and - again, I've heard (!) - asks its employees to bill hours on projects they are not working on so that they can maximize profits at their clients expenses. Also elephants are pink.
How this company can proceed to exist is beyond me.
For legal reasons I must emphasize that this is hear-say and should not be trusted as facts. At least one statement is a lie. What you believe to be true is up to you.
- jttnr
Cyprus and Deloitte, why am I not surprised to see those names mentioned together in connection with alleged tax evasion?
For those who don't know, Cyprus is widely regarded as one of Europe's tax havens. And, of cause, Deloitte has offices there.
- rinconrex
I just know this will be thoroughly investigated, all responsible parties held accountable, and the proper countermeasures and applicable laws will be updated to punish and disincentivise this behaviour in the future. Just kidding.
Things change when the cost-benefit analysis moves. If you apply the law strictly and effectively, the behaviour will adjust.
- smokefoot
I dunno. This all implies a level of central control that doesn't reflect how professional services firms operate. Mostly they're loose partnerships and local offices and partners have the significant discretion. Even legally they're mostly not structured as a global corporation but rather a loose association of legally distinct entities.
There's a tension between having a brand that reflects trust and institutional rigor and avoiding liability for the actions of partners in some far flung jurisdiction.
- skippyboxedhero
This article, possibly deliberately because you can read the subtext of exactly what happened with this story, conflates several things knowing that readers won't know the difference.
Transferring assets from Cyprus to BVI? Legal, there is no issue with doing this. What the journalist did, likely upon discovering this was legal, suggested that it was for tax purposes knowing that readers would assume this was illegal in some way...when it is not relevant.
An opinion was then acquired from a KC which, to a normal person, would read as confirmation that something suspect was going on but, if you have experience with this thing, says that in a completely different, unrelated context this would be illegal (it is a bit sad that we live in a world where a journalist will get an opinion from a KC and they will both conspire to produce something that is obviously intended to be misleading to readers).
Backdating asset transfer from Cyprus to BVI? Again, legal. The role of an auditor is not to provide advice on the legality of the transfer. All that happens is that they get some paperwork saying the assets were transferred two years ago, they go...yes, the paperwork is correct. If you think they should be doing anything else, you don't understand what an auditor is supposed to do.
What would be more questionable is if the transfer didn't actually happen two years ago but the auditor would have no way to know if that was the case. This would be easy to determine in other cases but in t […]
- Neil44
This publicity is probably an actual advertising campaign for them.
- skinfaxi
Am I too cynical in reading this as an advertisement for Deloitte's services?