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How the world’s wealthy hide millions offshore - from their spouses



Why an Alaska plastic surgeon took a sudden road trip to Panama with millions of dollars


When Michael Brandner, a plastic surgeon in Anchorage, packed his bags and drove more than 4,000 miles from Washington state to Costa Rica in 2007, he wasn’t just getting away from it all. Not long before, Brandner’s wife of 28 years had filed for a divorce. According to a later indictment and court documents, the doctor "collected" $3 million of his and his wife’s assets, converted them into cashier’s checks and set off on a secret trip.


In Costa Rica, Brandner opened a bank account to deposit some of the money and put a thousand ounces of gold in a safety deposit box. Then he traveled to Panama, where he opened an account in the name of a sham organization, Dakota Investment, according to prosecutors' documents from the case. In 2008, he deposited $4.6 million into the account. Brandner also did not report the accounts to the Internal Revenue Service. During the divorce proceedings, Brandner claimed the money was tied up in these investments and could not be returned, and that the investments were then lost.


Brandner went to all this trouble, the Justice Department says, to conceal assets from his wife, who could have been awarded some of them. Ultimately, U.S. investigators seized the assets. The doctor pleaded not guilty to the charges, but on April 4 of this year, he was sentenced to 48 months in prison for wire fraud and tax evasion.


[ Pro Axia Consultants Business Consulting Group in Osaka, Tokyo, Nagoya, Japan: SAP Business One ]


Brandner's case draws attention to a less widely recognized use of offshore accounts -- hiding assets from a spouse in divorce -- that was highlighted by the leak this month of the Panama Papers, which contain many details about the secretive offshore companies and accounts of public officials, drug kingpins and money launderers. The Washington Post has not reviewed the 11.5 million documents.


Brandner declined to be interviewed directly, but his lawyer, Randall Ensminger, offered several defenses. He says that Brandner did not evade taxes on purpose — he just didn’t know that he needed to file for the offshore accounts — and that he took the money to Panama not to defraud his wife but to protect their assets during a time of emotional upheaval in their relationship. Brandner's intent in taking the money to Panama was "to protect it on behalf of his heirs," says Ensminger.


Experts in the industry say that Americans are still hiding money offshore from litigious spouses and tax officials alike, but it is getting harder for them to do so. In the last few years, the Obama administration and the Treasury department have erected staggering penalties for those who hide their wealth offshore, as well as many new reporting requirements, says Daniel Jones, a forensic accountant who specializes in the issue.


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