When huge sums are being diverted that rightfully belong to pensioners, expropriated for the users of a fraudster, people lose their trust in the financial system. They take their money out of the pension system and put it under the mattress, and the whole system falls apart. Big frauds impact on investor confidence, whether passive pensioners or active investors in stocks or holders of bank accounts. He added, In Russia, widespread corporate fraud is perceived as crippling the financial markets of the country. People don t want to invest.
People get their money into out of Russia into offshore bank accounts.
He explained, You see this type of arrangement where transfer pricing companies in offshore centers expropriate money from shareholders. In transfer pricing, managers set up a secret trading company offshore, route purchases and sales through it, and rake off the profits, cheating shareholders and tax authorities. The technique is used widely. The official of an international investigations firm says the latest idea is to open up offshore companies in series of three's. Money launderers set up a British Virgin Islands corporation, open a bank account in Curacao, airfreight the money to Aruba, have that wire transferred.