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Traveling with owner blind credit/debit cards

Traveling with owner blind credit/debit cards

Our firm was recently asked if we could provide the financial portion of anonymous travel into the Zaire for a senior executive of a world-class mining company and his entourage. It was a wonderful opportunity, as investigators, to work on a transaction, and design that transaction to be resilient to tracing. In effect we were asked to make the transaction resilient to even our best efforts of tracking.

Traveling into high-risk countries, having a degree of anonymity, and still providing some semblance of comfort for your client, can be difficult and frustrating. It’s the safety, anonymity, comfort, effectiveness, budget, and protection tradeoff matrix. It often feels like trying to fit an elephant into the mouse cage.

Paying expenses as you go, while remaining anonymous, is difficult. Cash is a dangerous item to carry in large quantities. Establishing accounts in destination countries is often effective but can also announce your clients’ future presence. If the client is using his own credit card, then anyone can figure out who the VIP is in mere moments, with little effort.

To respond to this challenge we explored several options. A. Carry cash and pay as you go. For this entourage it would have required over $125,000 USD for the 22 day stay just for the cost of in-county travel, meals, and lodging. This amount of cash strips you of anonymity, and makes your client a guaranteed target for robbery. However, cash is an effective means of anonymous payment for small groups on short trips.

B. Establish a bank account in the destination county in advance of travel. Funds could be wired and banked in the destination country in advance of your client’s arrival. In the case in question, this was a viable option, since several world-class banks have locations in the Zaire. It was discarded when it was found that few have significant cash deposits on hand, that the banks had irregular hours due to the current political climate, and that the banks each have only one branch, in Kinshasa, that could handle what the client required. Consideration was also given to the fact that wire origination information was available to both the government and the bank’s personnel.

Since most of the local kidnappers work in concert with corrupt government officials, this, along with repeated trips of a foreigner to a local bank (who would have to show identification to obtain the funds), would have created circumstances whereby the clients could have been identified as a target. Much of this plan could be used in other countries, and possibly with other clients that are not NYSE traded companies and subject to a great deal of scrutiny. Another client could form two or three companies in between the client’s operational company, and the nominee company(ies) used to funnel the funds for use in the destination county.

C. The third option, the one we picked, was the use of secured credit cards. An advance was made by the client company to their travel agent as a prepaid expense. The travel agent forwarded the funds to a Nassau (Bahamas) based management company. The management company formed a new company, NewCo., and placed the advanced funds on deposit with a Jamaican Bank who issued the secured credit cards. Typically, 60 to 80% of the funds on deposit may be spent. It must be clear that the funds on deposit are not there to pay the credit card bills: They are security in case of default, and the client must pay credit card bills resulting from travel expenditures. The credit card statement and information shows a credit card issued by a Jamaican Bank with a Nassau, Bahamas, corporation as the owner and billing address of record. Eight cards were issued in the name of NewCo. There were no user names on the cards. The ownership of the cards could not be effectively traced from the face of the cards to the ultimate end user. The only serious drawback comes if you lose the cards: These cards are as good as cash, and whoever finds them will most likely use them.

This was an elaborate ruse used to keep the identity of the persons traveling as anonymous as possible. The cost was approximately $750 USD for corporate set up and $450 USD per card issued. Expensive as that seems, it represents a small fraction of the overall budget of the travel.

Other banks, and companies in other locations, can be used to complete a different ruse. The same can be done with some U.S. based card issuers, and the use of corporations formed in certain states or other jurisdictions that do not require any disclosure for the first year of operation. Also, with the advent of banking disintermediation around the world there are several similar types of services that can be done with non-bank financial institutions such as Merrill Lynch.

Do not use the same nominee company in the same region of the world twice. Ideally, the nominee company should only be used once and allowed to expire. We do not offer to perform this type of service under our name, or our company’s name, for the client. Rather, we coordinate the set up for the client, and direct the supply of third party suppliers of these services to our client. We don’t get in the middle of corporation set up or the funds transfer: The liability is too great for any potential reward. Rather, we use our position of trust to coordinate the suppliers with whom we work. The suppliers should be bonded to at least 30% more than the amount to be used in one “transaction.” Most of the service providers we have worked with have been bonded for $1 Million USD.

In this article the word resilient was used because no transaction is impossible to trace. There are only varying degrees of time and money required to trace a transaction to its origins. It is no different than building a fence. No fence is too high or difficult to climb. Some just require more time and effort than others.

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