The Paradise Papers weve acquired an astonishing view into a world in which prophet reigns king for an entire year and International Consortium of investigative journalists analyzed an enormous trove of leaked documents many of which come from appleby one of the largest and best known offshore Legal Service providers politicians major corporations and celebrities can all be found among its clients this time. The things the set the c. E. O. Are mostly legal but the end result is the same people dont pay taxes. The Paradise Papers is a joint project comprising almost four hundred. Journalists some from the New York Times there are several from connected people who are in the files. That actually show a business relationship between senior members of the government on people who are in putins inner circle. Others to be the biggest thing ever and it. Never ory that. Any. Debate. We thought these was a leak of leaks and here we are id eat again. Its like a hydra you cut off one head and to grow back whats next. Its a network of techs a vinson its a year after year they you loses about a billion euros through tax evasion and avoidance. And. We have a highly clan army where the most powerful and and the richest people to fire society to their game. These leagues shows us that that time will stop secrets is over. And. Were approaching the isle of man attacks even located between britain and ireland the leaked documents that weve been on allies in for the past year have let us hear a quote from an email. The isle of man seems to be what looks and borg was a few years ago. The island is a crown dependency answerable to the u. K. But has its own parliament and its own tax laws up and show up the seventys early eightys i mean the main economy drive it was tourism. But it was a you know what i call the bucket and spade tourism and its no longer there so we had to find Something Else to do. So or the secret of the success. I think is the tax regime. I mean i have no Capital Gains tax we have no interest in it so the idea is to trap people rich people. What they call High Net Worth customers. From holiday isle to tax paradise for the global elite. With roughly twenty six thousand residents the comparable douglass a Financial Hub despite the all time charm of brute force struck tramway. We meet phil crane a Tax Compliance activist. Yes sure this is the guy in government district in the finance district around here. Companies pay little or no tax here so its very lucrative for them to be incorporated here all they need is a postbox. Its about twenty eight thousand in the street no no it Rate Companies registered in the all of that and most of them will be in this street or the next to us three stories this this quarter is the financial quarter so they will be registered here in the companys registry at the end of the road and three quarters of them will be foreign oh will be owned by people off the are. So much of the business is legitimate but some of it isnt connected with offshore and this is what the problem is thats not to say its illegal invasion it might be. Tax avoiders so what that means to worry about this is that they are facilitating people from around the world to put that money in here to escape. Legally or illegally paying taxes in that home countries thats the problem at the v. A. Is one of a lot of the stops will be is a large eight legal again very connected to the offshore. Applebee as one of the Major Players in the offshore business this Company Video gives a soft pitch for its hard hitting services that has a branch on the isle of man and seven other tax havens hundreds of lawyers and Financial Consultants create Tailor Made Solutions for clients eager to avoid tax and grow their assets. Most of the data we examined comes from appleby and stare a thirteen point four million electronic documents were leaked to the german newspapers or doj that site dont want to share them with an International Consortium of journalists the files reveal the machinations that normally take place in secret the deals that deprive public coffers of billions of euros in tax funds urgently needed for schools hospitals infrastructure. One of applebys major clients came from Germany Court and known his name is associated with what is probably germanys largest ever tax evasion trials now the financial dealings of court and go home and his family are back in the spotlight. The. The german billionaires eightieth Birthday Party captured on a video that gives a rare glimpse behind the scenes the family concealed their wealth behind trust sent offshore tax havens but out of public view they led a lavish lifestyle. During his lifetime court and on gave millions of euros to his daughters c. C. And kanina gifts that eventually would draw the attention of tax investigators. That. Are on. The way. We go to bavaria to delve deeper into an on story. In one thousand nine hundred five the billionaire moved his residence to bermuda where he founded a holding company. That shielded his familys assets from the german tax authorities. This file footage shows and on it is Pharmaceutical Company growing on money time. For the company patriarch the tax haven was the Perfect Place to turn his mind company into a Global Enterprise called car today more than twenty building a companys worldwide a base that feeling on. In one thousand nine hundred seventy one on sold his stake in the company for the equivalent of more than ten billion dollars german tax authorities didnt see a cent going on published a memoir for his friends he said if they called him tyke an autobiography of an entrepreneur his family and his fortune. Thirty two chapters heres one on trusts a complicated animal. We bequeath star family firm worth billions to the trust and it was a good decision. Of course there was criticism from all corners especially germany claiming that the ngo on board tax evaders who were hiding out in bermuda. That i could just shrug off since as head of a global group it was my job to hold it together guides if this is as old as to say since you got to see and counting at were always dear to my heart they want to go empty handed either though the money never went to their head yes as beneficiaries of the trust they both received ample dividends i was sure that all. The love trusts dates back to the middle ages when a landowner left england to fight in the crusades he would transfer his estate to a trust in his absence. Trust operates as a foundation but without a public beneficiary the founder in this case court and on transferred his assets to the trust officially he was no longer the owner. His assets ended up in a tax haven in the caribbean the trust is administered by a trustee who acts as a representative. Eventually the assets are disbursed to predetermined beneficiaries theyre also unknown to the public. For investigators its practically impossible to determine whos the founder and who is the beneficiary of a trust after examining the thousands of documents the tax authorities determined that coat hanger on had transferred assets to his daughters they didnt pay all the tax they owed an estimated four hundred forty Million Euros. The tax investigation in the german city of ill explore blasted three years the anger on sisters even spent several days in investigative custody in the end the authorities could only document a fraction of the suspected tax they owed in an out of Court Settlement the daughters paid one hundred forty five million in back taxes and fines and the case was closed. Ski head of the bavarian finance trade union is very familiar with the case. Were talking about huge sums no one ended up in jail. He took. The daughters immediately absconded to switzerland for me and my colleagues thats a major aggravation. Prominent the case under investigation the more professional the defense so on file. In cases like this our opponents if i may call them engaged very professional high caliber defense teams. So its not a battle among equals. Its in no way a battle of equals companies and the consultancy firms they hire or staff or has. The shell game aspect thats an inherent part of the problem. In the appleby files we find about a dozen trusts and companies belonging to the engelhorn clan that apparently eluded discovery by the tax authorities like the bella vista trust the beneficiary was the Angel Foundation and its beneficiaries were quote going to homes daughters that lend support to the suspicion that the daughters owed far more tax than their one hundred forty five million euro payment. What would happen in the enron case if a previously unknown tax avoidance schemes were now discovered. Might your side take up the case again. If we were to obtain information relevant to the case new investigations might indeed be forthcoming. We are in new york. The applebee files contain information that could implicate high ranking members of the u. S. Government. The most prominent is u. S. Businessman and current commerce secretary wilbur ross with a claimed estimated net worth of around three billion dollars ross may be the richest person in President Trumps cabinet. Hes also one of applebys top twenty clients ross has a stake in dozens of offshore holdings one of these is especially problematic for the trumpet ministration. For more than a year journalists at the New York Times have been investigating whether the president and his associates have ties to russia. Pulitzer prize winner Mike Macintyre and his colleagues have compiled long lists of names of people with ties to President Trump they ran those names through a Search Engine created by the i. C. I. J. The International Consortium of investigative journalists. They got twenty four thousand hits many of the names turned up no evidence but one led straight into the white house. A tight lid is being kept on the investigation. Were not even permitted to talk about it in the newsroom. The coverage of trouble. For us at the New York Times has been in some ways. A twenty four seven exercise and one that is unlike anything ive ever experienced before i think that any revelations that further suggest that there are a business ties or any other types of connections between members of the administration and russia are potentially problematic what documents. Did you find and what can they say one of these companies Navigator Holdings is a shipping firm which does show up in the apple b attorney files. It is a company that during mr ross has ownership of it started doing business with a major Russian Gas Company c bore. And that company has some interesting connections to the to the kremlin and so what you see here is of an indirect profiting on the part of mr ross through this business relationship with this kremlin connected Russian Gas Company. The Russian Company is owned by several other gox some of them are even on the list of russians under u. S. Sanctions these are two of the principle owners of seaboard land and nicholson carol shammal all. Day he is purported to be president putins son in law. All members of the cabinet mcentire reminds us must disclose all their business interests before taking Office Especially when it comes to anything that might pose a conflict of interest. But in a written declaration and during his congressional confirmation hearing commerce secretary ross failed to mention his relationship to putins oligarchs despite rosss claim. Full disclosure he still held shares in the shipping firm when he took office. If you would take a look at these pacific questions in areas where you would recuse yourself in addition to what youve already done with ethics i would so. Intend to be quite scrupulous about route to school and any topic with the slightest and still i dont think it will get that to you. Richard painter is a professor of law at the university of minnesota theres a commission from president signed by president george w. Bush and. This is a commission which is given to the higher ranking officials in the white house challenging job to be the chief white house ethics lawyer because every time somebody gets in trouble you have to deal with it and you have to tell people what they can do you have to tell people they have to sell off their interests and in businesses that create conflicts of interests. We filled paynter in on the results of the investigation. The conservative attorney was unsparing in his verdict that something. Could there be a clash of interests. And yes if he has financial holdings. That could be affected. By his government work then he is at risk of violating a criminal statute if they protest sufficing Government Matters expected to have an Important Role in making decisions about economic sanctions imposed on any foreign country what were talking about had been possible had been think well in the time when you served in the white homes. Had no idea whats going through his mind he absolutely has to solve this company and we cannot have a commerce secretary who has an interest in a shipping company its not going to work and this episode is an illustration of exactly why its not going to work. We return to the isle of man much of what is happening here also has an unsavory air to it. Appleby helps make it all possible. A boeing seven thirty seven is approaching the ninety Million Dollar private jet belongs to a billionaire only the pilot and a small crew are on board theyve got a brief meeting with the customs authorities we can guess its purpose. The private jet center turns to a very will heal the clientele. Its employees tell us that many private jets are registered on the isle of man. The island serves as a gateway to the e. U. With a twist. Private jets imported through the island arent subject to european b a t taxes. Its a scheme that enables the owners to save millions so many am planes. Imported to europe and part of why i have often met you how does this come and its its the eighteen rates. And i dont know how they compare with all the facilities around europe and brits preferentially deck of them if it were enemies but it accounts yeah fifty eight us yeah so. You can save a lot of tax if you do it by a date so you know. What the value of an aircraft are large aircraft that its a lot of money how much do you think i can save money if i am caught my plane. Ive. Been on the value of your excess but this definitely runs into the millions there are many celebrities you know who do that. No answer. But were already familiar with one story formula one World ChampionLewis Hamilton and appleby client now with a staff. He bought his twenty million euro aircraft to jet off to see is then the pop star girlfriend nicole shot singer between races his dogs a company. This is how the tax scheme works applebee sets up two Letterbox Companies for the client the First Company imports the jet to the are a live match. And then leases the private jet to the second company. On paper the second firm is an Aircraft Leasing company a sleight of hand that turns the private jet into a business jet there reimbursed for the import tax. The owner events. If the import tax is the total twenty percent in this instance five Million Euros the owner then charters his own jet from the Charter Company and can use it for private travel. When we add up all the tax schemes involving aircraft contained in the appleby files we arrive at an estimated two hundred fifty Million Euros of taxes that were saved or not paid. Lewis hamilton insists the entire operation was legal he paid all the taxes that he owed and hes right on the isle of man these schemes are legal and have official sanction the idea behind it was originally devised by an apple b. Employee who now works for a stereo. I brought in some new ideas to make it even more efficient and most safe than previously and i cocreated all those in the reputation just great everybody who registered the aircraft told their friends about how good it was and so on and said if you use with custom say that they know when theyre coming they level the paperwork ready as soon as the aircrafts on the ground indiana man they will complete the paperwork so there is what are you going to europe if the customs man comes at to you and says what is the status of the at craft show in this fall and hes satisfied that the v. A. Ts being paid and theres no text you. Two hundred fifty Million Euros worth of taxes that are lost to europe with that money the e. U. Could double its aid programs for natural disasters such as floods or earthquakes. The applebee files also contain many references to berlin. The city has become a magnet for investors and speculators the for an extra a dog laundry list Investment Company has been snapping up rental properties all across the city. Resistances that he had this year he has to be since the start of the financial crisis real estate is considered a sound investment just any time. Dont you know its not here in charlotte books in the midst of gentrification is in full swing. Yeah. And buying off the renovations rents roughly forty one percent higher than they were under the previous lease. These hefty profits are helping to make berlin and investors paradise. Trying to break already has more than seven thousand eight hundred apartments on its books profit and a steady increase in value are all that matter. The renters are largely irrelevant. In recent years investors such as venue excrete have caused rents in the city to skyrocket. Show the independent financial and tax expert christoph trial fetta the statistics we compiled about for an exploration. Of this building was bought by for an expressway what do you think the reasoning is behind the purchase of such a relatively modest looking building a movie id stay. Off an experience even ten years ago when i bought a series of buildings at a price of just under one thousand euros past. I was an open meeting and i guess the no one is being renovated a unit in a building like this can be sold for four five six thousand euros passed. Me a call from. A very attractive profit. But it seems thats not enough because theres also a scheme to avoid paying taxes on those profits. And once again appleby is in the thick of it. Our research showed that appleby administers a letter box company for a phone explaining on the island of jersey the profits earned in berlin through real estate appreciation and dire rents are registered in jersey last year alone this amounted to some forty nine Million Euros. The tax rate on the island zero percent the how exactly do firms like for. Express managed to shift profits abroad. And behind finishing phrase not just an Investment Company its a whole slew of companies that are all linked in that sign contracts with. Players more aggressive in avoiding taxes and some other investors that patsys real estate in balance being called maggie. And germany also does its part in making itself an attractive tax haven heres how it works when real estate is purchased the buyer is supposed to pay a Land Transfer tax but theres a trick to avoid this tax too its called a share deal. If for example for an expression doesnt purchase one hundred percent of a building but allows others to retain small shares in it no Land Transfer tax is owed absurd on the face of it but true so furnish prey and stalls to people as straw men and issues them loans so they can purchase a small share in the building through a single dio clinics saved four point four Million Euros. Were at for an experience of official berlin address theres not even a sign an Accounting Firm receives mail for the company here a letter box company right in the middle of berlin. We receive a letter from for an expression that says the company is above board in all its dealings and follows the law. With a single share deal for an extra brady avoided four point four million in tax that money would have allowed berlin to renovate this decaying school building. How much tax do you estimate that real estate firms avoid paying through such share deals here in berlin is a special mission and its probably in the hundreds of millions of euros of course the city would like to have those hundreds of millions which is why were taking the matter to the point as to the bonus odds and its at either one this or was the government asleep at the wheel for five when i did off will be again we could have reacted sooner but when we started talking about this issue on the federal level two years ago it was already apparent that this was New Territory for us and that many didnt want us to talk about it doesnt it is the money is donated. Its a depressing story first the state practically encourages tax avoidance then you tweedles its thumbs and now its frantically racing to catch up with the tax dodging. 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