Castle Bank & Trust

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Group.png Castle Bank & Trust  
Founder • Paul Helliwell
• Burton Kanter
Interests Money Laundering
A notorious bank used by the CIA.

Castle Bank & Trust was a notorious Bahamian bank that was involved in tax evasion, as well as covertly funneling funds for the Central Intelligence Agency. The bank was founded in the 1960s by Paul Helliwell, a former member of the Office of Strategic Services, and Burton Kanter, a tax lawyer.

The bank was used by the CIA to funnel money for covert military operations, including those at Andros Island (Bahamas), a staging area for anti-Castro activities.

Activities

The bank had a number of clients, including celebrities, organized crime figures and wealthy business owners. Some of the most notable included John Fogerty (of Creedence Clearwater Revival), who lost most of their wealth when the bank collapsed, Tony Curtis, Hugh Hefner, Penthouse (magazine), the daughter of Chiang Kai-shek, and members of the Pritzker family (owners of the Hyatt hotel chain).[1] Reputed organized crime members that were customers included Moe Dalitz, Morris Kleinman, and Samuel A. Tucker.[2][3][4][5]

Investigation

In the early 1970s, the U.S. Internal Revenue Service started an investigation into the tax avoidance schemes used by the bank, entitled "Operation Tradewinds". The IRS were able to secretly photograph a list of the bank's clients, while a bank executive was dining in Miami with an IRS informant. As a result of this information, the IRS planned to initiate a new investigation, called Project Haven, into the tax affairs of the people on the client list.[6] A prosecution of one of those clients eventually reached the United States Supreme Court as United States v. Payner.

The Wall Street Journal reports that the investigation was dropped because of pressure from the CIA.[7] The bank collapsed in 1977. The CIA then used Nugan Hand Bank for funding some of their covert activities, as they had done with Castle Bank & Trust.[8]

Burton Kanter was tried, but acquitted in 1977 in a case involving tax evasion on the sale of a Reno, Nevada hotel using an account at Castle Bank & Trust. However, his law partner, Roger Baskes, was convicted in the case.[9]


References

  1. New York Times January 30, 1977 "The I.R.S. and Its Briefcase Caper"
  2. Are Bahamas Banks Offering Tax Haven? The Pittsburgh Press December 30, 1975 [1]
  3. Second Bahaman bank goes under Star-News May 26, 1977
  4. Law Agencies Probing Caribbean Tax Havens Sarasota Herald-Tribune April 25, 1976 [2]
  5. IRS Resumes Probe of Secret Offshore Accounts The Milwaukee Sentinel December 27, 1975 [3]
  6. Conflict at IRS? by Jack Anderson The Telegraph October 25, 1976
  7. CIA Helped Squash Major, Star-Studded Tax Evasion Case by Jim Drinkhall Wall Street Journal April 24, 1980 [4]
  8. "Project Haven" bank closes in Bahamas The Miami News May 2, 1977
  9. New York Times September 13, 1977 "Attorney is Acquitted of Tax-Evasion Charges"
  • Masters of Paradise: Organized Crime and the Internal Revenue Service in The Bahamas By Alan A. Block ISBN 1-56000-971-3
  • The Politics of Heroin: CIA Complicity in the Global Drug Trade by Alfred W. McCoy ; New York: Harpers and Row, Publishers Inc., 1991 ISBN 1-55652-483-8
  • The Crimes of Patriots: A True Tale of Dope, Dirty Money, and the CIA by Jonathan Kwitny ; New York: W.W. Norton, 1987 ISBN 0-393-33665-4
  • In Banks We Trust by Penny Lernoux ; Anchor Press/Doubleday 1984 ISBN 0-385-18329-1
  • CBS Television "60 Minutes" The Castle Bank Caper November 21, 1976
  • "Oversight Hearings into the Operations of the IRS (Operation Tradewinds, Project Haven, and Narcotics Traffickers Tax Program)," Hearings before a Subcommittee of the Committee on Government Operations, House of Representatives, 94th Congress, 1st Session, Oct. 6, Nov. 4 and 11, 1975.


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