• South Dakota is home to the assets of individuals previously accused of financial crimes, according to the new Pandora Papers.
• “South Dakota now competes with notoriously opaque jurisdictions in Europe and the Caribbean over financial secrecy,” the Washington Post reported.
• The documents reveal that $ 360 billion in client assets are in trusts in South Dakota.

South Dakota’s financial secrecy laws have made the state a favorite haunt for foreigners who wish to conceal and protect their assets, with tens of millions of dollars linked to people accused of financial crimes and violations of human rights. human rights, according to new public documents.

The Pandora Papers, leaked to the International Consortium of Investigative Journalists (ICIJ), explore the secret offshore system that the rich and in power use to protect their money. The millions of pages of documents were shared with media partners including the Guardian, BBC Panorama, Le Monde and the Washington Post.

The documents reveal that $ 360 billion in client assets are in trusts in South Dakota. Over the years, South Dakota state lawmakers have approved legislation drafted by trust industry insiders, protecting their clients’ finances and adding additional benefits, according to the ICIJ. Over the past decade, the total amount in these accounts has quadrupled from $ 57.3 billion.

“South Dakota now competes with notoriously opaque jurisdictions in Europe and the Caribbean over financial secrecy,” the Washington Post reported.

In 2019, for example, family members of the former vice president of the Dominican Republic, who once ran one of the country’s largest sugar producers, finalized several trusts in South Dakota. The trusts held personal wealth and shares in the company, which has been accused of human and labor rights violations, including illegally razing the homes of impoverished families to expand plantations.

Sioux Falls, South Dakota, with a population of less than 200,000, houses tens of millions of dollars in trusts owned by people and companies accused of human rights abuses and other wrongdoing , reports the Post.

South Dakota is so attractive to the ultra-rich because they want the best security, the best income, and the lowest costs, according to the paper.

State laws have evolved to allow greater financial security to protect asset holders, the Guardian explains. In a normal bank, the government taxes the interest earned on the account. Even though this money is protected from taxes, it can still be lost through divorce or legal proceedings.

However, in South Dakota, all assets are protected from any civil claims, reports the Guardian. Assets are not protected against criminal investigations. Because the state has no income tax, no inheritance tax and no capital gains tax, finances there are also immune from the government, the outlet said. .

81 of the offshore accounts detailed in the Pandora Papers are in South Dakota, making it the state with the highest number of trusts in the report, according to the ICIJ.

“Trusts established in South Dakota and many other states in the United States remain hidden, despite the enactment this year of the Federal Business Transparency Act, which makes it more difficult for owners of certain types of businesses to hide their trust. identity, ”the ICIJ said.

News organizations involved are expected to release more details on the Pandora Papers in the coming days.