How To Get Away With Murder (If You’re Ultra-Wealthy)

By Gideon Cionelo.

“No one is above the law.” Presidents, protestors, and prosecutors often repeat this talking point because it emphasizes fairness and equal justice—integral parts of any legal system. But is it true? Well, not always. If you’re ultra-wealthy, you can purchase access and protection that virtually places you “above the law.” How does this happen? Let’s walk through each step.

 

Step One: Become Ultra-Wealthy

 

Most people aren’t born with tens of millions of dollars to their name, so becoming ultra-wealthy is the first task. Perhaps you can reach this point after a lifetime of good luck, genius, and hard work—but that’s difficult. Corruption is much easier. While corruption takes many forms, the most common path is to leverage personal and professional connections within a poor country that has valuable public resources or sought-after services.

 

Consider Isabel dos Santos, Africa’s richest woman and the daughter of the former Angolan President. In 1999, Isabel’s father circumvented the public bidding process for Angola’s telecommunications spectrum and unilaterally granted the contract to a public-private joint venture—one in which Isabel conveniently owned a 25% stake. With cell phone use skyrocketing since, that 25% stake is now worth at least $1 billion. Deals like this continued, including one where Isabel ended up with a 24.5% stake in a public-private partnership with Angola’s diamond-mining company, yielding her millions of dollars in annual dividends.

 

Step Two: Protect Your Wealth

 

Once you’re a multi-millionaire, the next step is to protect your wealth. There are many places in the world where you can launder and hide your money, but eventually you’ll want to rest it in a world-class safe haven. Like South Dakota. This state of fewer than one million people holds over $355 billion in trusts. How does this overlooked state accumulate more wealth than the entire GDP of Denmark? A unique legal device: the South Dakotan trust.

In South Dakota, assets in trusts are safe from nearly everyone. An ordinary person usually stores their money in a bank, where the government taxes what little interest it earns and it remains vulnerable to judgments from divorce and other legal proceedings. This is not the case in a South Dakotan trust. There, your assets are protected from claims from ex-spouses, creditors, former business partners, litigious customers, and basically everyone else. The trust can even shield away the government. There is no income tax, inheritance tax, or capital gains tax in South Dakota. So while your assets are susceptible to criminal prosecution, information cannot leak out in a way that would trigger criminal or tax investigations. With a clean paper trail and South Dakota’s guaranteed promise of secrecy, no one will find your assets here.

 

Step Three: Purchase Diplomatic Immunity

 

Thus far, you’ve already avoided taxes, government reporting systems, and legal claims through tools and resources only available to the wealthy. But to act with impunity and be above the law, you need diplomatic immunity. There are different ways to get this, but for the ultra-wealthy, the most popular method is through an ambassadorship. During the Nixon administration, an American ambassadorship to Costa Rica cost about $250,000. That price is now generally around $1 million. But you may want to avoid the international spotlight of a U.S. ambassadorship. And that’s fine; even as a non-citizen you can purchase an ambassadorship (and the diplomatic immunity it comes with) from a litany of smaller countries.

 

That was the plan for Ali Reza Monfared, who bought his ambassadorship from the Commonwealth of Dominica with $200,000 in campaign donations. Although Dominica is a small Caribbean country, the power of a diplomatic passport and diplomatic immunity is universally respected. Monfared, who embezzled millions from his home country of Iran, used his diplomatic immunity to evade law enforcement in Dominica and extradition to Iran. Unfortunately for Monfared, his money soon ran out. With too many unpaid bills, Monfared overstayed his welcome in Dominica, and after leaving the country, Iranian authorities eventually tracked him down.

 

Still, diplomatic immunity has protected others charged with far worse than embezzlement because nations refuse to challenge the international precedent set by the Vienna Convention. For example, Raymond Davis avoided criminal prosecution with diplomatic immunity after killing two men in Pakistan. American Anne Sacoolas used diplomatic immunity to avoid criminal prosecution after she drove on the wrong side of the road and killed a motorcyclist in the U.K. And an unknown foreign diplomat stationed in the U.K. escaped multiple criminal charges for rape after his home country denied the U.K’s request that it withdraw immunity.

 

The Anti-Money Laundering Act of 2020

You may be wondering how we could ever fix this. There are over two hundred countries in the world, and many are desperate for investment or led by politicians eager to sell citizenships, ambassadorships, and diplomatic passports. And even when the law seems to catch up to ultra-wealthy criminals, many somehow maneuver their way out. Isabel dos Santos, mentioned above, is a prime example of this. Although multiple jurisdictions have frozen $1.3 billion of her assets pending litigation, she still can travel freely between her luxurious London residence, private island in Dubai, and yacht worth $35 million. Isabel also likely has untraced bank accounts and assets that may never be recovered. Aided by western-juggernaut firms—like Boston Consulting, McKinsey & Company, and PricewaterhouseCoopers—Isabel’s financial transfers, trusts (perhaps in South Dakota), and laundering schemes are likely impressive and expansive.

 

In January 2021, hoping to address this problem, Congress overrode President Trump’s veto of the National Defense Authorization Act, passing into law the Anti-Money Laundering Act of 2020. This Act is the most significant anti-money laundering legislation passed by Congress in over twenty years. Among other things, the Act expanded whistleblower rewards and protections, established a federal reporting system that targets new shell companies, created the new crime of intentionally deceiving or withholding information from a financial institution, and expanded the government’s subpoena power over foreign banks. Whether this Act will rein in people like Isabel dos Santos remains to be seen. But no one should be above the law, so let’s hope this Act is not merely another law on the books that ultra-wealthy criminals avoid.

"Man with pile of money on desk" by Toronto History is licensed under CC BY 2.0

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By Gideon Cionelo

J.D. Candidate 2022

Gideon is an ASLJ Staff Writer and 2L at ASU’s Sandra Day O’Connor College of Law. Prior to law school, he was a private investigator in New Mexico and a volunteer with non-profit organizations in the Philippines, Tanzania, and Uganda. In his spare time, he enjoys traveling, following his favorite sports teams, and spending time with his wife and their two dogs.

The opinions expressed herein are those of the individual contributors to the ASLJ Blog and should not be construed as the opinions of the Arizona State Law Journal or the Sandra Day O’Connor College of Law at Arizona State University.