I am not a lawyer, but I read something today that I thought was ingenious. Despicable but still ingenious. It had to do with a very high net worth individual who was a client of a Swiss-based company that protected his assets from being seized as part of a lawsuit.
This individual was in the financial services industry. His net worth was upwards of $500 million dollars. He contracted with a company out of Switzerland that literally rents all personal property to high net worth individuals. If I understand the concept correctly, the Swiss company actually owns everything that is typically considered personal property. Things like houses, cars, and boats. They can even own personal care items like hair dryers and clothing. Clients pay both an upfront fee and periodic installments which grant them exclusive rights to use these items in perpetuity or until the items reach the end of their serviceable life. Since the high net worth individual does not own the items, they cannot be seized as part of a judgment from a lawsuit or surrendered in bankruptcy proceedings. The article cited an example of a Canadian client who had his condominium and cars seized as part of a lawsuit. The rightful owner of the condo and cars was the Swiss-based asset protection company. They petitioned the Canadian court and the seized property was returned to the company. The company's client went back to enjoying exclusive rights to use the property.
While such an arrangement is ingenious, it seems like it is a sophisticated way to get away with fraud. Apparently, one of the of the convicted Enron executives was a client of this Swiss company and was able to resume using some of his protected property after he got out of jail.
Is this sort of thing legal?
This individual was in the financial services industry. His net worth was upwards of $500 million dollars. He contracted with a company out of Switzerland that literally rents all personal property to high net worth individuals. If I understand the concept correctly, the Swiss company actually owns everything that is typically considered personal property. Things like houses, cars, and boats. They can even own personal care items like hair dryers and clothing. Clients pay both an upfront fee and periodic installments which grant them exclusive rights to use these items in perpetuity or until the items reach the end of their serviceable life. Since the high net worth individual does not own the items, they cannot be seized as part of a judgment from a lawsuit or surrendered in bankruptcy proceedings. The article cited an example of a Canadian client who had his condominium and cars seized as part of a lawsuit. The rightful owner of the condo and cars was the Swiss-based asset protection company. They petitioned the Canadian court and the seized property was returned to the company. The company's client went back to enjoying exclusive rights to use the property.
While such an arrangement is ingenious, it seems like it is a sophisticated way to get away with fraud. Apparently, one of the of the convicted Enron executives was a client of this Swiss company and was able to resume using some of his protected property after he got out of jail.
Is this sort of thing legal?