US Residents Beware of Dangerous Offshore Products and Banking

US Residents Beware of Dangerous Offshore Products and Banking

Right from the get-go — this is my territory. I know the legalities and practicalities of the offshore world better than all but, maybe, 500 experts in the world. If you don’t know one of these people (and none of them is on the internet trying to sell you something) then please listen to me with both ears.

  1. I know many U.S. residents want to varied their banking and their portfolios to other countries. I don’t blame them.
  2. I know many U.S residents are tired of the tax system and are looking for relief.
  3. I know many U.S. residents know a bit about “offshore” especially with the bombardment of enticing banking offers in Belize, Panama, or “other jurisdictions”.

I’m going to tell you the truth.

It is nearly impossible for a U.S. resident/citizen to get out of the U.S. tax system legally. It IS impossible for a U.S. citizen to set up a bank account he controls with more than $10,000 CUMULATIVELY ANYWHERE IN THE WORLD without reporting it on his regular tax return and a special information filing that makes you truly list the edges and account numbers. Unless the bank is in the U.S.

There are some ways around all this. I have not seen any of those ways ever mentioned on the internet and my email is flooded with offers.

  1. It is nearly impossible to get a foreign bank account without presenting a utility bill. If the utility bill is from the U.S., then why are you already trying?
  2. There is no use in buying offshore companies (IBCs) unless you can get a bank account THAT YOU DON’T HAVE TO REPORT TO THE IRS.
  3. That closest limits your total world-wide non-U.S. deposits to less than $10,000. So why try?
  4. Managing an offshore bank account from inside the U.S. is not just stupid, it’s a death wish. In case you don’t watch the news, these government guys are very, very serious about catching people just like you and making examples of you.

Rule: Panama Foundations are stupid. First: if YOU get a bank explain it, you’re screwed. Second: if you let someone else open an explain you, you’re screwed.

Rule: You do not trust anyone else with your money unless you can also trust them with your life. already in the U.S. Trusting days are OVER! For example, unless you have family in Panama that you trust, then you don’t know anyone you can trust in Panama. Panama is a synonym for anyplace. You cannot trust edges or lawyers. Period. There are no exceptions.

Rule: If you want to diversify your portfolio to a foreign location, then GO TO THE PLACE and check it out. I’m not a fan of U.S. banking, but I gotta tell you that once you’ve been to some of these places, you wouldn’t want to change a $20 bill at a local bank, let alone leave your money there. You go to a few restaurants and grocery stores and watch them keep up every bill you give them up to the light to check it for counterfeiting. What does that tell you?


  • Find an HSBC near you in the U.S. Open an account. Nothing to report.
  • When you are oversea, find another HSBC. Present your U.S. HSBC banking bona fides and your account will be opened smoothly. Don’t put more than $10,000 in the account. HSBC is a synonym for any solvent foreign bank with a branch on U.S. soil. Most advisors say never do this. They’re right. But since it’s very hard to get an offshore bank account as a U.S. citizen without reference letter from your U.S. bank, then I respectively disagree with the experts. Get a bank account at a local branch of a foreign bank and then go open the real account with your sterling U.S. credentials. Not perfect in the hide-and-seek game, but not much is anymore.
  • If you have real wealth, but not enough to want to use $50,000 for real international lawyers, start reading about “dynasty trusts” and check out Nevada as a jurisdiction. These are bulletproof U.S. entities that can survive a government or creditor challenge or your death a lot better than an offshore trust.
  • If you’re really serious, become a RESIDENT someplace else. Not a citizen. A resident. Much easier and it doesn’t cost a kazillion dollars for an economic passport. Once you are a resident, with the proper I.D., you can open bank accounts in your new residence country that are not connected to your U.S. documents. Is there nevertheless a reporting requirement if you reach the limit? Yes.
  • If you’re so inclined, you should analyze “territorial tax” or “no tax” jurisdictions for your residency. See if your dream wish list can be equaled with countries that have tax advantages.
  • If you’re flush, then buy a good-deal condo someplace you truly wouldn’t mind living in and then rent it out. If you can get a mortgage on it, great. But foreign lenders usually want 50% down. Make it a cheap condo. The condo gets you the utility bill you’ll need to open a bank account. But once you’re “there” sometimes utility bill requirements go away because your official address is on your government I.D. By the way — YOU CAN USE YOUR IRA FUNDS for buying foreign real estate. If you’re nervous about the state of the U.S., clean out your IRA and buy foreign real estate. Do I need to tell you that due diligence is very, very important. Don’t buy anything that is not someplace you may have to live. You might have to.
  • If you can’t provide a cheap foreign condo, then re-think the whole international thing and go buy some gold coins or bullion before you have to register it.
  • If you’re a bona fide resident of a foreign country there is a huge exemption on U.S. taxable income. Take it. That’ll save you a pile right there.
  • Don’t get too cute about encryption and secrecy. You hide in plain view.
  • For Godsake, if you’re not a billionaire, don’t renounce your U.S. citizenship. Just get the hell out if you don’t want to stay. Times change. It’s a good passport and with the tax exemption you’ll rarely pay U.S. tax anymore.
  • Learn to make money via a portable trade or occupation before you move away from the U.S. You take your cash flow with you. And remember the banking $10,000 limit? That’s money you have IN A BANK ACCOUNT. Not money you make and then take out of the bank and keep at home or in a vault. Remember, you’ve declared it already though you didn’t pay tax on it. It’s legal.


  • There is absolutely no way to open a bank explain a COMPANY you own and put more than $10,000 in it and not report it, already if you don’t sign on the bank account. If you don’t report it is a serious felony and prima facie tax evasion. Undoubtedly you’ll also be charged with money laundering.
  • If you truly sign on the company account, already if you’re a minority shareholder, and there’s more than $10,000 in it and you don’t report it to the U.S., it’s also a felony and is prima facie tax evasion. And money laundering.
  • If you file a U.S. tax return and fail to report foreign earnings? More trouble.
  • If you set up a trust, but you indirectly control it, it is a crime if you don’t report it yearly via a very obnoxious IRS filing that’s about 40 pages long.
  • If you set up a trust with real money in it – in an offshore jurisdiction – but you don’t control it, you’re a fool. I hope you see the rock and hard place set up.
  • There are trustees you can trust. You don’t know any of them or you wouldn’t be reading this.


  • Lots of decent-sounding edges have low entrance requirements. They don’t drill down too deeply before they will “accept” your deposits. Nice online service. Encryption. Privacy. Multi-money accounts. Your confidence grows. You move more funds there. Perhaps you’ve decided you’re going to play tax games and you don’t exactly declare all the money on some country’s tax return. Your balance builds up. One fine day it hits, say, USD$100,000.00 and you decide to pull out $25,000.00. Suddenly your account is frozen by the “compliance” department. They will want to see you passport copy again, your utility bill again (oh, you let that rental condo go?), they’ll want a declaration and proof of the origin of the funds and, yes, they might already want to see a tax return. Folks, I’m not talking about some piece o’ sludge bank in Belize. I’m talking a nice Swiss bank. And not a U.S. citizen owner. And a year to get it untangled.


These are troubled and dangerous times. Everyone wants your money – which equates very quickly to a large chunk of your life. Your country. Other countries. edges. Government agencies. County character tax authorities. State or provincial governments. Sales tax authorities. additional to that list of “official” pirates, you now have offshore pirates who want to sell you legal useless stuff.

Keep your money where you are. If you want to diversify, truly go someplace and do something. As in go analyze options and then get the hell out. If you don’t have that kind of money and you’re nevertheless scared, join the club. And keep your money hidden in your home and/or buy some silver and gold.

There are NO third party investment opportunities. If you don’t watch your money, it will disappear. Do not lend. All loans are bad loans. Invest in and near yourself.

The real bad times have not already begun. This is, at best, the eye of the storm.

Author: Jack Campitelli, J.D. has lived and worked in a number of tax-advantaged foreign countries. He has taught asset protection inside and outside the U.S. He knows most of the folks in the biz. His website is His suggested books de jour are “Portable Trades and Occupations” and “Bye Bye Big Brother” obtainable at ascolibooks com. If you want to start a internet business as a portable trade, then consider his Legal Guide for Websites

Jack is absolutely not obtainable for “offshore” consultation!

Copyright 2010 by RioneX IP Group LLC. All rights reserved. This material may be freely copied and distributed unprotected to inclusion of this copyright notice, author information and all the hyperlinks are kept intact.

by Jack Campitelli, JD

September 10, 2010

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