US Residents Beware of Dangerous Offshore Products and Banking

From the beginning, 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 any of these people (and none of them are on the internet trying to sell you something), listen with both ears.

  1. I know that many US residents want to diversify their banking and portfolios to other countries. I do not blame them.
  2. I know many US residents are tired of the tax system and are looking for relief.
  3. I know many US residents know a little about “offshore”, especially with the barrage of tempting banking offers in Belize, Panama or “other jurisdictions”.

I’m going to tell you the truth.

It is almost impossible for a US citizen/resident to legally exit the US tax system. IT IS impossible for a US citizen to open a bank account that they control with more than $10,000 CUMULATIVELY ANYWHERE IN THE WORLD without reporting it in your regular tax return and a special filing that has you list banks and account numbers. Unless the bank is in the US.

There are a few ways around all of this. I haven’t seen any of those ways mentioned on the internet and my email is flooded with offers.

  1. It is almost impossible to obtain a bank account abroad without presenting a utility bill. If the utility bill is from the US, why are you trying?
  2. There is no use buying offshore companies (IBCs) unless you can get a bank account WHICH YOU DO NOT HAVE TO REPORT TO THE IRS.
  3. That immediately limits your total deposits worldwide outside of the US to less than $10,000. So why try?
  4. Managing an offshore bank account from within the US is not only stupid, it’s a death wish. In case you don’t watch the news, these government guys are very, very serious about catching people like you and making an example of you.

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

Rule: Don’t trust anyone else with your money unless you can also trust them with your life. Even in the US, the days of trust are OVER! For example, unless you have relatives in Panama that you trust, then you don’t know anyone you can trust in Panama. Panama is synonymous with anywhere. Banks and lawyers cannot be trusted. Period. There are no exceptions.

Rule of thumb: if you want to diversify your portfolio to an overseas location, GO TO THE PLACE and check it out. I’m not a fan of American banking, but I have to tell you, once you’ve been to a few of these places, you don’t want to change a $20 bill at a local bank, let alone leave your money there. You go to some restaurants and grocery stores and watch as they hold up each bill you give them to check that it isn’t a counterfeit. What does that tell you?


  • Find an HSBC near you in the US Open an account. Nothing to report.
  • When abroad, look for another HSBC. Present your bona fide US HSBC bank card and your account will open without a hitch. Do not put more than $10,000 in the account. HSBC stands for any solvent foreign bank with a branch on US soil. Most advisors say never do this. they are right. But since it is very difficult to get an offshore bank account as a US citizen without a reference letter from your US bank, I disagree with the experts. Get a bank account at a local branch of a foreign bank, and then open the real account with your US sterling credentials. Not perfect at the game of hide and seek, but not much anymore.
  • If you have real wealth, but not enough to want to spend $50,000 on real international lawyers, start reading about “dynasty trusts” and check out Nevada as a jurisdiction. These are bulletproof US entities that can survive a government or creditor challenge or death much better than an offshore trust.
  • If you are really serious, become a RESIDENT somewhere else. Not a citizen. Has resident. Much easier and it doesn’t cost a trillion dollars for a cheap passport. Once you are a resident, with the proper identification, you can open bank accounts in your new country of residence that are not linked to your US documents. Is there still a reporting requirement if I reach the limit? Yes.
  • If you so choose, you should explore “property tax” or “no tax” jurisdictions for your residence. See if your dream wish list can be combined with countries that have tax advantages.
  • If you’re satisfied, then buy a condo at a good price somewhere you don’t really care about living, and then rent it out. If you can get a mortgage on it, great. But foreign lenders generally want a 50% down payment. Make it a cheap condo. The condo provides you with the utility bill you will need to open a bank account. But once you’re “there,” sometimes the utility bill requirements go away because your official address is on your government ID. By the way, YOU CAN USE THE FUNDS FROM YOUR IRA to buy real estate abroad. If you’re nervous about the state of the US, clean out your IRA and buy real estate abroad. Need I tell you that due diligence is very, very important? Don’t buy anything that isn’t a place you have to live in. You may have to.
  • If you can’t afford a cheap foreign condo, then rethink the whole international thing and buy some gold coins or bullion before you have to register it.
  • If you are a bona fide resident of a foreign country, there is a huge exemption on US taxable income. Take it. That will save you a lot right there.
  • Don’t get too cute with encryption and secrecy. You hide in plain sight.
  • For God’s sake, if you’re not a billionaire, don’t give up your US citizenship. Just leave if you don’t want to stay. The times change. It is a good passport and with the tax exemption you will rarely pay more US taxes.
  • Learn how to earn money through a portable trade or occupation before you move outside of the US. Take your cash flow with you. And remember the bank limit of $10,000? That is the 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 have reported it even though you did not pay tax on it. it’s legal


  • There is absolutely no way to open a bank account for a COMPANY you own and put more than $10,000 in it and not report it, even if you don’t sign on the bank account. If you don’t report it, it’s a felony and prima facie tax evasion. No doubt you will also be accused of money laundering.
  • If you actually sign on the company’s account, even if you’re a minority shareholder, and there’s more than $10,000 and you don’t report it to the US, that’s also a felony and prima facie tax evasion. And money laundering.
  • If you file a US tax return and do not report foreign earnings? More problems.
  • If you set up a trust, but control it indirectly, it’s a crime if you don’t report it annually via a very nasty IRS statement that’s about 40 pages long.
  • If you set up a trust with real money in it, in an offshore jurisdiction, but don’t control it, you’re a fool. I hope you see the rock and the hard place established.
  • There are trustees you can trust. You don’t know any of them or you wouldn’t be reading this.


  • Many decent-sounding banks have low entry requirements. They don’t dig too deep before “accepting” your deposits. Good online service. encryption. Privacy. Multi-currency accounts. Your confidence grows. You move more funds there. Perhaps you’ve decided you’re going to play tax games and don’t exactly report all the money on some country’s tax return. Your balance builds up. One good day you reach, say, USD $100,000.00 and decide to withdraw $25,000.00. Suddenly, the “compliance” department freezes your account. They’ll want to see your passport copy again, your utility bill again (oh, did you let that rental condo go?), they’ll want a statement and proof of source of funds, and yes, they might even want to see a statement of taxes Folks, I’m not talking about a sediment bank in Belize. I’m talking to a good Swiss bank. And not a US citizen owner. And a year to untangle it.


These are difficult and dangerous times. Everyone wants your money, which very quickly amounts to a large part of your life. Your country. Other countries. Banks. Governmental agencies. County property tax authorities. State or provincial governments. Sales tax authorities. Added to that list of “official” pirates, you now have pirates abroad who want to sell you useless legal stuff.

Keep your money where it is. If you want to diversify, go somewhere and do something. As in going to explore options and then leaving. If you don’t have that kind of money and you’re still scared, join the club. And keep your money hidden in your house and/or buy some silver and gold.

There are NO third party investment opportunities. If you don’t take care of your money, it will disappear. Dont wait. All loans are bad loans. Invest in and near you.

The real bad times haven’t even started yet. This is, at best, the eye of the storm.

Author: Jack Campitelli, JD has lived and worked in several tax-advantaged foreign countries. He has taught asset protection inside and outside the US He knows most people in the business. His website is Suggested daily books of his are “Portable Trades and Occupations” and “Bye Bye Big Brother” available at ascolibooks com. If you want to start an Internet business as a portable trade, consider your Legal Guide for Websites

Jack is absolutely not available for consultation “offshore”!

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

by Jack Campitelli, J.D.

September 10, 2010

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