The best books to read to understand financial crime; How to steal it.

"Financial crime is as old as money. Hucksters were dreaming up Ponzi schemes centuries before Charles Ponzi gave his name to the ruse. Where there has been tax, there has been evasion. The looting of national coffers is as time-honoured as politics itself. But the late 20th and early 21st centuries saw an explosion in the scale, scope and level of sophistication of financial shenanigans, as globalisation fuelled the growth of offshore finance, and particularly the use of anonymous shell companies and trusts to shroud nefarious activity. This, in turn, has sparked a crackdown, albeit a fitful one, by governments--as well as leaks like the Panama Papers. However, as recent scandals from 1mdb to Wirecard attest, the battle to end financial secrecy and the dodginess it engenders is far from won. Here are five books to help you understand why.

Treasure Islands. By Nicholas Shaxson. Palgrave Macmillan; 272 pages; $18.99. Vintage; £10.99

Though it is more than a decade old, this remains the best introduction to the world of tax havens--or "secrecy jurisdictions", as Nicholas Shaxson, a financial journalist turned campaigner, prefers to call them. He is particularly good on Britain's "second empire": its network of overseas territories, from Jersey and Guernsey to the British Virgin Islands and Cayman Islands, whose growth was driven by moneymen from the City and Wall Street looking to create a tax- and regulation-free "elsewhere". Successive British governments, worried that such outposts would otherwise need subsidies, encouraged them. The book is one of the best primers on how the ne'er-do-wells' getaway vehicles work. They are often used in dizzying combinations and across jurisdictions to throw investigators off the scent.

The Despot's Guide to Wealth Management. By J.C. Sharman. Cornell University Press; 274 pages; $29.95 and £23.99

The book to turn to for the lowdown on "grand corruption": the theft of national wealth by kleptocratic leaders and their cronies, often in poor (albeit resource-rich) countries. It is a subject the author, a professor at Cambridge University, knows as well as anyone, having spent close to two decades studying offshore financial centres and the murky corporate structures used to hide ill-gotten gains. Why, he asks, is it so difficult to hold kleptocrats accountable? A big part of the problem is that financial crime straddles borders--money stolen from, say, Libya, typically goes on an offshore world tour before ending up in London property or a Swiss bank vault. Policing, meanwhile, is predominantly national. Recovering assets requires cross-border co-operation that is still largely absent. Jason Sharman makes a compelling case for governments to come together to solve the "inherent difficulty of international legal action in a world of sovereign states". We first reviewed his book in 2017.

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Butler to the World. By Oliver Bullough. St Martin's Press; 288 pages; $28.99. Profile Books; £20

Not all tax havens are palm-fringed. As this new book by a seasoned investigative journalist explains, Britain, as well as being the centre of a global offshore web, is itself a giant financial laundromat. Oliver Bullough argues that this is by design: Britain made a decision after the second world war, as its empire dwindled, to carve out a new role as a home for footloose international capital. These butlering services extended most eye-catchingly to Russian oligarchs and other cronies of Vladimir Putin (and probably the man himself, via proxies). No other country offers a comparable array of enablers; from banks and lawyers to public-relations firms and other "reputation managers". The book also lifts the lid on how obscure, seemingly innocuous corporate forms, such as the "Scottish limited partnership", can poison the financial well. We reviewed "Butler to the World" on publication. The author's previous book "Moneyland", a tour of the world's money-laundering hubs, is an equally informative and entertaining read.

American Kleptocracy. By Casey Michel. St Martin's Press; 368 pages; $29.99. Scribe; £18.99

America has led the world in combating cross-border financial crime, from tax evasion to the funding of terrorism. But it has failed to get its own house in order. Casey Michel holds a microscope to this hypocrisy, examining the hundreds of billions of dodgy dollars sloshing through New York property, Miami's financial centre, shell companies in Delaware and trusts in South Dakota. State-registered American trusts have become one of the biggest receptacles for corrupt capital, even as federal lawmakers have at last forced more transparency on the sorts of brass-plate companies in which Delaware has long specialised. For a closer look at the First State's chequered financial history, we recommend "What's the Matter with Delaware?" by Hal Weitzman (Princeton University Press).

Billion Dollar Whale. By Tom Wright and Bradley Hope. Hachette Books; 416 pages; $18.99. Scribe; £9.99

A rip-roaring case study in kleptocracy, focused on the $4.5bn looting of 1mdb, a Malaysian state investment fund. A scandal that ensnared not only national politicians and their bag-men but also Hollywood bigwigs and Wall Street heavy-hitters, most notably Goldman Sachs. The book lifts the lid on how white-collar criminals use financial complexity and the law itself, especially British libel and privacy laws, to stymie journalists, whistle-blowers and others seeking to expose their sins; and on the dangerous temptation to see financial crime as victimless because of its abstract nature: the billions misappropriated from 1mdb meant fewer schools, hospitals and other public services for ordinary Malaysians. The book also highlights the frustrations involved in bringing perpetrators to book. Despite the best efforts of authorities in America, Singapore, Switzerland and several other countries, the heist's suspected mastermind, Jho Low (who has denied wrongdoing), remains at large.” [1]

·  ·  ·  1. "The best books to read to understand financial crime; How to steal it." The Economist, 11 July 2022, p. NA.