How to Spot Offshore Scams
I was talking to a potential client – A US financial advisor – about Swiss investments. He half-joked, “it must be heavy carrying all that cash to Switzerland”.
I still hear such comments more often than you might think — even fifteen years after the effective end of Swiss banking secrecy.
The image of a briefcase full of cash crossing the Alps might have been true once, but it’s been dead for a long time. Switzerland today is one of the most tightly regulated financial jurisdictions in the world. Swiss banks that work with Americans follow US law to the “t”, and every legitimate account requires full identification, source-of-funds documentation, and tax compliance.
(I speak from experience – we regularly help clients through the Alps-sized pile of paperwork involved.)
That misunderstanding, though — the idea that “offshore” still means secrecy — is exactly what keeps so many scams alive. Offshore planning has never been more popular, but it’s also never been more misunderstood.
If you spend any time online researching second residencies, foreign bank accounts, or “asset protection,” you’ll find two kinds of advice.
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One comes from legitimate professionals who emphasize compliance, structure, and long-term planning.
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The other comes from self-styled “experts” selling what sounds like a shortcut: tax-free living, guaranteed investment returns, instant passports, or untraceable offshore accounts.
The first approach works. The second could get you in trouble.
The Offshore World Ain’t What It Used to Be
Before 2010, the offshore industry thrived on secrecy. Hidden Swiss accounts, nominee companies in the Caribbean, and mail-drop “trusts” were sold as privacy tools. Most were technically illegal — but they flourished until the US passed the Foreign Account Tax Compliance Act (FATCA) and the OECD rolled out the Common Reporting Standard (CRS).
Those laws ended banking secrecy almost overnight.
Unfortunately, they didn’t end the scams.
The same promoters who once peddled “private Swiss accounts” now market “zero-tax residencies,” “offshore insurance wrappers,” and “citizenships by donation.” The products changed. The pitch didn’t.
Each one sells the illusion of complete privacy, no reporting, and total control. Each one targets Americans who don’t realize the rules have changed.
Scammers Exploit What You Don’t Know
The typical offshore scam doesn’t start with greed. It starts with confusion.
An American hears that people are moving abroad to pay less tax, so they Google “tax-free countries.” They find a website offering a “lifetime tax residency” certificate for $10,000. It looks official, comes with embossed paperwork, and claims to make them exempt from both US and local taxes.
But it’s not true.
There’s no such thing as a paper-only tax residency. And nothing — not a residency card, not a passport, not a foreign address — removes you from the US tax system unless you formally give up US citizenship.
We’ve seen these fake programs pop up from Latin America to Eastern Europe. The common thread: the promoter promises no physical presence required. That alone should be a deal-breaker.
Yes, there are perfectly legitimate programs that sell “tax residency”, like Uruguay. But there’s always a cost – usually both time and money.
The Illusion of Sophistication
Another variation targets higher-net-worth investors.
You’ll be told you can “form your own private trust company” or “family office” offshore — complete with “total privacy” and “no reporting.” The sales pitch includes official-looking documents, a shell company registration, and assurances that “it’s fully legal.”
It isn’t.
A legitimate Private Trust Company (PTC) is a heavily regulated fiduciary vehicle, typically set up in the Cayman Islands, Jersey, or Guernsey. It costs $50,000–$100,000 to establish, must be administered by a licensed fiduciary, and is subject to inspection by the local regulator.
Scammers skip that part. They sell you a company that looks the part but has no trust powers and no legal standing — just a meaningless certificate.
In short, you’re not “managing your family assets privately.” You’re holding a stack of paper that won’t survive the first legal challenge.
Trouble in the Turks & Caicos
One of the first cases I worked on at The Nestmann Group — more than 12 years ago — involved a client who’d been pitched this exact idea.
He told me about a lawyer in the Turks & Caicos Islands who offered to set up a structure that supposedly provided “complete protection” and “no reporting.”
It sounded great. And at the time — still new to asset protection planning — I thought so too.
Thankfully, our founder, Mark Nestmann, saw through it immediately. His quick call saved that client a great deal of money, time, and frustration.
Fake Trusts, Fake Insurance, Real Damage
The “offshore trust” and “insurance bond” industries are fertile ground for abuse.
Scammers love phrases like “pure trust,” “common law trust,” or “private insurance.” The problem: none of those terms mean anything under US or international law.
A legitimate offshore trust must be formed under the laws of a recognized jurisdiction — such as Nevis or the Cook Islands — and administered by a licensed trustee.
The same goes for “offshore insurance.” Real Private Placement Life Insurance (PPLI) can be a valuable planning tool for qualified investors. But the fake versions — often called “life wrappers” or “insurance bonds” — are nothing more than unregistered investment accounts disguised as insurance policies.
If someone tells you it’s “tax-free,” “not reportable,” or “no longer subject to US law,” stop right there.
The Pattern Never Changes
In forty-plus years of helping clients plan internationally, we’ve seen the same core scams repeat in endless variations.
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In the 1990s, it was “secret Swiss accounts.” (Although people still ask.)
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In the 2000s, “offshore trusts.” (This one is still quite popular, although for different reasons.)
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In the 2010s, “Panama foundations.” (Not as common as it once was, but it comes up a couple times a month.)
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Nowadays, a lot of scams involve crypto.
The packaging evolves with the headlines. The deception stays the same: the promise of something for nothing.
What Actually Works
The truth is simple. Offshore planning done right is pretty boring — and legal.
Americans can still open foreign bank accounts, but those accounts must be reported to the IRS.
You can still set up foreign companies and trusts, but only under the laws of a recognized jurisdiction and with licensed fiduciaries.
You can still seek a second residency or passport, but only through legitimate, government-approved programs.
There’s no need to hide anything. The real offshore industry today is transparent, structured, and compliant — but it still offers genuine privacy, diversification, and protection when done properly.
That’s the difference between planning and pretending.
Why We Wrote This Report
We’ve spent the last 40+ years guiding Americans through the real offshore world — and helping them avoid the fake one.
Our new multi-part report, The 21 Biggest Offshore Scams (and What They Really Look Like), exposes the most common frauds operating right now in international finance and asset protection.
In Part One, we cover the scams most likely to target investors — from “zero-tax residencies” and fake trusts to unregulated investment programs and offshore “wealth managers.”
In Part Two, we’ll look at scams tied to passports, residencies, and foreign banking — the ones that exploit people searching for a legal escape route or “Plan B” abroad.
And in Part Three, we’ll examine foreign real estate scams — from fake developments and double-sold titles to guaranteed rental income schemes and fraudulent “residency-by-investment” offers.
These briefings are available exclusively to Nestmann Inner Circle subscribers. Inner Circle members receive in-depth analysis, early access to new planning opportunities, and practical guidance on how to build legitimate offshore strategies — without falling for the noise.
Get the Facts Before You Act
If you’re serious about protecting your wealth internationally, it starts with the truth.
Join the Nestmann Inner Circle today and get instant access to Part One: The 21 Biggest Offshore Scams (and What They Really Look Like).
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We have 40+ years experience helping Americans move, live and invest internationally…
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