Jersey’s Pandora’s Boxes #117

In edition 117 we take you to the tax haven of Jersey off the coast of France and the intruiging story of the discovery of 333 boxes of incriminating evidence of fraud. Those boxes have revealed some ugly truths about this small island tax haven that affect us all. The transcript is available here (some is automated and may not be 100% accurate)

“It’s like a movie set. Because what you think you’re looking at and what’s really happening are two very different things. For me, it’s about accountability. I want to see reform in Jersey. I want a spotlight on judges, on the police, on the entire justice system.” ~ Tanya Dick Stock

“We want to change the narrative. And what people need to understand is that when you bring that bad element onto your turf, it all comes with a cost. There’s a ying to the yang and it’s like a cancer. If you don’t deal with it, it will kill the host. You know, it’s inevitable.” ~ Darrin Stock

Featuring:

  • Tanya Dick-Stock and Darrin Stock
  • Produced and hosted by Naomi Fowler of the Tax Justice Network, with special thanks to investigative journalist Nicky Hagar.

You can hear the Taxcast edition on rising inequality and dysfunction in Jersey here.

You can also read more about this story on the following links:

https://www.institutionalinvestor.com/article/b1qwpnk6j1zv70/The-Heiress-the-Queen-and-the-Trillion-Dollar-Tax-Shelter

https://eic.network/blog/huge-new-tax-haven-leak-reveals-specialist-money-laundering-company  

https://www.thebureauinvestigates.com/stories/2020-10-05/lost-trust-leaked-files-expose-jerseys-inaction-on-fraud-scandal

Here’s a summary of the ‘Jersey’s Pandora’s Boxes’ story with some excerpts from the podcast:

Jersey is a beautiful place. It’s also a British Crown Dependency and tax haven, offering all sorts of financial secrecy. There’s an estimated £1 trillion sitting in this tiny island’s trusts, companies, funds and foundations. It’s a major artery into the City of London.

Now, picture St John’s Manor. a Jersey estate of 58 acres – a spectacular manor house with landscaped gardens, a lake, its own chapel, and a Japanese water garden.

Says Tanya Dick-Stock, the daughter of Canadian multi-millionaire John Dick, “It’s in many ways like a fairy tale, it’s got ponds and geese and chapel, and there’s nothing like it, the air is better, you sleep better, or I used to sleep better there and I really loved it. I’d hoped to grow old there.”

Her father John Dick has been immersed for years in court cases involving trusts, transactions, banks and law firms across the world. Much of them concern the activities of a Jersey trust company called La Hougue, which was once head quartered at St John’s Manor. Says Tanya, “For some reason different newspapers, news sources are still saying that my father allegedly owns La Hogue, or I’m alleging he owns La Hougue. No, I’m not alleging anything. A court of law, not one, but two have adjudicated John Dick owns La Hougue. It’s not me saying it, it’s a court of law.”

At some point her parents set up a trust: “I guess you could kind of look at it as an inheritance, actually the trusts were set up as part of my parents’ divorce settlement and so a large part of the marital assets instead of being divided between the two of them, they put them into trusts specifically for my brother and myself. There were three different trusts there and one of them, by my 40th birthday, I was to receive half of the trust assets and then my brother upon him reaching the age of 40 would have gotten his half. And how much was in the trust – we’ve tracked hundreds and hundreds of millions of pounds, so I think there’s at least half a billion – we’re not done calculating yet.”

It’s clear that Tanya didn’t have your average childhood, being from the family that she was. She says her father told her that the money in her trust had gone: “In 2010 he came to me one day and basically said, ‘bad news Tanya, uh, the trusts are bust, all the money’s gone and I’m really sorry about that.’ And I’m thinking, whoa, hold on! There is no way that this money can be gone! I want to know what happened! When I did start digging into it there was still about a hundred million in assets still in the trusts. At the end of the day, I was able to save about a hundred million.”

Her father claims he was also the victim of fraud and other trustees of La Hougue have denied allegations put to them by many journalists, although through his lawyer a former trustee did admit in a US court to fabricating documents. Tanya and her husband Darrin Stock have been battling her father in the courts, and speaking out publicly for quite some time.

“You don’t put yourself through what we have for money and now it’s about justice and it’s about everybody else. It goes beyond a movie, if you saw a movie, you wouldn’t believe it” says Tanya.

Darrin Stock is Tanya’s husband: “People on that island are scared to death of the authorities there. And I mean, who wants to live that way? And you rapidly lose the gas to fight when it’s just about the money. I’ve heard enough stories now that I actually have nightmares about what I’ve heard and it bothers me so much. Why we’re doing these interviews is not for Tanya’s sake. We’re doing these interviews for the other people. We can be a voice. We can be an organiser. We can be the lightning rod to help bring change.”

“Since coming forward,” says Tanya “I’ve been contacted by a lot of victims, people who don’t have a voice and they have encountered some of the same things that I did, I am by far not the only one who’s been stolen from and defrauded.”

Darrin says “It took us almost three years to come to the conclusion that we were going to go public. And then when Tanya and I made the decision to go public, we decided we couldn’t go kind of public. Either you were going to do it all, or you just don’t do any. And so then we decided that we had to put our name to it.”

Speaking out publicly has meant laying out every aspect of their lives for
journalists to check up on, including former investment banker Darrin’s own dispute in the past over a tax bill in the United States.

Back in Jersey it’s almost ten years ago now that Tanya discovered the ‘Pandora’s boxes’ of incriminating evidence. She found them in St John’s Manor, the incredible place where she grew up. At the time she was preparing for her wedding there.

“In 2012 we were married on the 4th of July. And in the process of
planning for the wedding I was looking for a place that I could store all the boxes of Tiki torches and flower urns and all the stuff that was coming in and I needed a staging area. There was an old squash court and nobody used it. So I thought, well, that’s perfect, it’s close enough to the house, you know, so I got the master key out and I go running down there, I open the door and much to my dismay, I’m looking around and there are just boxes and boxes and boxes. Did you see Raiders of the Lost Ark? You know that last scene where they’ve got the Ark of the Covenant and it’s been boxed up and they’re wheeling it in to that warehouse with all the boxes, and the camera pans back and you just see more boxes, and more boxes. And that’s what it felt like, ‘cause they were piled as tall as I was, and my heart sank because I’m thinking ‘I need this space for my wedding!’ And they’re dusty and they’re dirty and there’s like dried leaves and spider webs and dead bugs. And I’m thinking, ugh, this is trash, I got to get rid of it. So my first thought is let’s toss it. And then I’m looking at the labels on the side and I noticed that there are trust names and some of them are my trust names.”

There were 333 boxes in total, and what turned out to be 350,000
documents. After the wedding and the honeymoon Tanya and her husband Darrin started to go through the boxes. There’s a treasure trove of evidence on some who used La Hougue’s services – tax cheats, a porn king and convicted tax fraudster, Russian and British oligarchs, there are even links to the famous missing Botticelli Madonna and Child painting from 1485, not to mention the disappearance of more than $100 million from the notorious US savings and-loans scandal back in the 1980s. As incriminating evidence mounted, Tanya’s husband Darrin followed the trail to Panama, the infamous tax haven exposed by the Panama Papers.

“La Hougue tried to move from Jersey in 2007, 2008,” he says. “La Hougue
changed its name to PanTrust and moved to Panama. PanTrust is the extension of La Hougue. So in 2015, as we’re digging into the boxes deeper and then we were like, well, maybe we should go to Panama, you know, and go down there. And everybody’s like, ‘Panama is so corrupt and you’ll never get anything out of it’ and we thought well, I mean, why not take a shot, right? So I myself flew down to Panama to meet with the regulator.

We’d gotten some legal counsel down there and what they had prepped me for was basically that we were going to go in and make a formal complaint to some junior person and then that was going to, you know, probably have a junior lawyer involved. And then it would take an hour or two, then we’d go. I walk in to the meeting and it was pretty obvious early on that something was afoot because they actually took us up to the main floor of where the headquarters of the regulator is, because in Panama, the trust world is regulated by the banking division and so the head of regulation is actually a cabinet level position. So you’re talking about an actual government agency that you’re dealing with, appointed by the president of Panama. I walk into this boardroom that’s got 40 people sitting at this table. I mean, the head of the investigation, the head of police, the head of banking, the regulator himself is there, their lawyers are there. And so we have, we have triggered something, we have walked into something and we don’t know what it is. Shortly after that meeting the Panama regulator terminates Pantrust’s trust license. The Panamanian regulator took the unprecedented step of issuing an unbelievably scathing letter of just the danger to society that this organisation is. Panama of all places where everybody said they would do nothing is the only jurisdiction that actually did something, which is the shocking part. And you look back at Jersey and you’re expecting them to actually be the ones that would be the upstanding white Knight. And they want nothing to do with this.”

Tanya’s father John Dick denies any involvement in fraud. Tanya does remember as a child going into her dad’s office and getting told off for playing with a load of old typewriters, old ink, old sheets of paper, stamps, all sorts of things. That’s significant because of some of the things they found in the boxes, as Tanya explains in the Taxcast:

“Some things you just know are wrong like, you know I ran across a memo and they were talking about ‘you need to be careful when you’re fabricating this document that you use old paper and old ink. So if they test it, they can’t tell that it’s a fake.’ And yeah, I think everybody pretty much understands that that’s bad.”

After going through the boxes with a team of experts Tanya and Darrin went to the police in Jersey, expecting them to investigate:

“I was told that Jersey places an affirmative duty on its people that if you see suspicious activity you are bound by law to go and report it. You don’t have a choice. So, you know, talk about suspicious activity, there was evidence of money laundering, fraud, identity theft, so Darrin and I, we went to the police and we filled out police reports, one of the detectives came to the squash court and he’s looking around all of these boxes and he says, ‘so all of these boxes are fraud?’ And we said, ‘yes’. And he goes, ‘so it’s not just like every day records and you know, a couple of bad documents thrown in?’ We’re like, ‘well, you know, we haven’t been through all the boxes, but no, I mean, it’s pretty chock-a-block with fraud.’ And so he takes the cover off one of the boxes, he reaches in, he pulls out a random piece of paper and it talks about shredding the documents, which is against the law, you have to keep the documents for trust companies. And it talks about shredding the documents, hiring commercial shredders, getting black bin bags and then burning them at the tip. So he looked at that and he went, ‘yep okay, I take your point.’ And then the police seized the documents and the detective said it was one of the worst cases he’d seen where there was such a plethora of evidence. And it went from him being very excited about prosecuting it to him going, ‘oh, by the way, I’m uh, kind of retiring.’”

Tanya and Darrin say it’s when when they began to engage with law enforcement and the courts in Jersey that the realities of a State captured by finance really started to show themselves. “There’s a culture in Jersey that they call ‘the Jersey way’,” says Naomi Fowler, the Taxcast podcast host, “you know, you don’t stand up and speak out against the kind of insularity and conflicts of interest that you get in a small jurisdiction like this, it’s one of the reasons so many small islands tend to become popular places for secretive finance sectors.”

“I never understood it until I found myself in front of two Jersey judges,” Tanya says. “They were both my father’s former lawyers for 20 some years. The head of the police commission, he was also my father’s former lawyer, I mean the conflict of interest is astronomical. When we started going through the boxes, I found another document too that made it very clear – the trustee of La Hougue, the guy who was doing the day to day stuff, there was a memo he sent to my father and one of La Hougue’s clients was very unhappy and had threatened to go to the Jersey regulator. There’s a memo that I found that was in the boxes where he writes to my father and he says, ‘well, one of our clients has threatened to go to the Jersey regulator. He’s very unhappy right now. And I told him that he could basically pound sand and I’m not worried about it because we’ll just immediately pay our way out of it as usual.’ I’m like – pay our way out of it as usual!?!”

Before the police came to take all the boxes away Tanya and Darrin were able to copy a large chunk of the documents, The police later allowed them access to make further copies, as well as giving them a digital copy of what they had copied. They estimate they have about 80% of what they originally found and they are making much of that accessible to journalists through
the Organised Crime and Corruption Reporting Project to help facilitate further investigations.

“Jersey is like a movie set,” says Tanya. “Because what you think you’re looking at and what’s really happening are two very different things.

“Yeah,” says Darrin. “It’s important for other people to pay attention to what’s happening here, because this really affects everyone, the rule of law.“

“I’ve spoken to people who’ve lost their pensions, lost everything through scams that have used offshore secrecy and the impunity that can
exist in those places, and it’s been really devastating to them,”
 says Taxcast host Naomi Fowler. “But tax havens, secrecy jurisdictions also attract a lot of people doing unsavoury things, hiding criminal, proceeds, cheating on their taxes, that type of thing. And they’re not going to go to the authorities when they get ripped off. So, you know, you have this really big culture of impunity left right and centre. And there’s often a kind of panic to protect the jurisdiction from any negative publicity, from any scandal because they
don’t want to drive away the money.”

“Yeah,” says Darrin. “When we started pushing on this, we’ve run across some horrific crimes, I mean, it’s very black and white what had happened and Jersey would not investigate it. And on the surface, I think people look at that and they go, ‘Jersey’s trying to protect its good reputation.’ And the reality of it is, is they’re not, what they’re really trying to do is protect their bad reputation. Because what they’re trying to tell the underworld is ‘come to us and nothing will ever be investigated. You can do whatever you want and nothing will be investigated.’ And that’s the signal that they’re sending to the underworld to bring the business there. Where I think the average guy walking down the street sees or hears this rumour that Jersey is not doing an investigation and they’re like, ‘well, they don’t want to tarnish their image’ – you’re missing the point. It’s quite different. You know, we’ve been contacted by people in Jersey that have had their homes stolen. And that’s why Tanya was such a threat to them, sitting with boxes of some of the most incriminating evidence, and you know, the last thing they’re going to do is do an investigation.

What does it mean to us as a society? The system has been bastardised in a way. Now it works for the 2% and it punishes the other 98%. And what we want to be able to do is help Jersey spin it backwards, where it helps the other 98% and it punishes the 2% that are doing the crimes.

And what people need to understand is that when you bring that bad element onto your turf, it all comes with a cost. It’s like a cancer. If you don’t deal with it, it will kill the host, you know, it’s inevitable. They’re not going to investigate anything because any investigation is going to unearth what they don’t want the world to see. And that’s the tragedy. At some point, you get to a point of no return and I think that’s where Jersey’s gotten to – it’d be the last place you’d do business! We’re talking to the people in Jersey and the people of Cyprus and the people of the United States and the people of England, because what’s happening is the rot that’s in Jersey, and I could give you example after example after example of where they’ve exported it all over the world and absolutely decimated your courts, and you don’t even know it. This is a much bigger picture and it literally touches each and every person.”

“For me, it’s about accountability” says Tanya. ” I want to see reform in Jersey. I want a spotlight on judges, on the police, on the entire justice system.”

It’s now almost ten years since Tanya and Darrin first discovered these boxes of evidence in St John’s Manor, Jersey. In Panama, the authorities revoked La Hougue’s sister company’s licence so it could no longer operate from there. In the US there have been important admissions in court, and litigation is ongoing. In Jersey there have been no criminal charges, prosecutions, or regulatory penalties imposed. Tanya Dick-Stock now faces huge court costs and is blocked from participating in Jersey court proceedings. These Jersey rulings, with all their potential conflicts of interest, could prejudice, or at least influence courts in other jurisdictions.

Financial secrecy is at the heart of this unresolved scandal and it really needs to go. For that laws must change. And financial regulators and tax authorities must be independent, well funded and empowered to enforce those laws.

Do listen to the full story in the Tax Justice Network podcast. 

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