According to Bloomberg last year, about $450 million
belonging to top executives at billionaire hedge fund manager John Paulson’s
New York firm took a quick round trip to Bermuda.
In April, the executives sent the money to a reinsurance
company that they’d set up on the island 650 miles off the North Carolina
coast. By June, the Bermuda company, which has no employees and sells far less
reinsurance than the industry norm, had sent all the cash back to New York, to
be invested in Paulson & Co. funds.
By recycling the funds through Bermuda-based Pacre Ltd., the
Paulson executives are positioned to legally exploit a little-known tax
loophole, reduce their personal income taxes and delay paying the bill for
years….
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