Financial crime, money laundering and investment fraud often take place in, or have connotations with offshore financial centers. These jurisdictions provide for an efficient environment and ecosystem to minimize transparency control. Offshore jurisdictions are sometimes seen as tax havens due to their lax approach towards business activities outside the country. However, from a perspective of alternative foreign direct investment local economies benefit substantially. Offshore financial centers benefit tremendously from their corporate infrastructure and inviting attitude towards foreign company formation. The downside of the industry is that illicit actors utilize these jurisdictions for different types of offshore fraud.
Offshore fraud may include money laundering and financial crime. As such offshore fraud considers bank failure, advance fee fraud, investment fraud and Ponzi schemes. All these types of financial crime have severe consequences for its victims. Even though the European Union provides for several safeguards, offshore fraud is often committed towards its citizens. As such, civil action by regulators and other authorities contributes to confidence in the financial system and may even indemnify victims of offshore fraud.
Fraudsters use different approaches to shield their true intentions. The incorporation of opaque business structures, often in several offshore jurisdictions make it hard to uncover money streams and distinguish legitimacy from illegal payments. It is for the uninformed investor not easy to regain access to funds held offshore when a fraudster is unwilling to surrender. Therefore, hiring professional assistance is recommended to limit losses and maximize repayment. As with most fraud, the longer a victim waits with taking action, the less likely full recovery becomes.