| Industry | Banking |
|---|---|
| Founded | 1960s |
| Founders | Paul Helliwell, Burton Kanter |
| Headquarters | Nassau, Bahamas |
Castle Bank & Trust was a Bahamian bank that was involved in tax evasion, as well as covertly funneling funds for the Central Intelligence Agency (CIA). The bank was founded in the 1960s by Paul Helliwell, a former Office of Strategic Services and latter CIA officer, 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, a staging area for anti-Castro activities.
The bank had many clients, including celebrities, organized crime figures, and wealthy business owners. Some of the most notable included John Fogerty and other members of Creedence Clearwater Revival, who lost most of their wealth when the bank collapsed, Tony Curtis, Hugh Hefner, Penthouse, and members of the Pritzker family (owners of the Hyatt hotel chain). Reputed organized crime members that were customers included Moe Dalitz, Morris Kleinman, and Samuel A. Tucker.
In the early 1970s, the U.S. Internal Revenue Service started an investigation into the tax avoidance schemes used by the bank. The investigation was called Operation Tradewinds. The IRS was able to secretly photograph a list of the bank's clients, after being provided with a bank executive's briefcase that was taken from the executive's apartment by an IRS informant. As a result of this information, the IRS launched a new investigation, called Project Haven, into the tax affairs of the people on the client list. A prosecution of one of those clients eventually reached the United States Supreme Court as United States v. Payner. Project Haven was later suspended because the names of the clients obtained from the briefcase was an illegal search. The Department of Justice also dropped its investigation for the same reason.
According to The Wall Street Journal reporter Jim Drinkhall, the case was later dropped because of pressure from the CIA, which had been using the bank as a front to fund covert operations.
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. In 1982, attorney Calvin Eisenberg, another of Kanter's law partners, was convicted of advising in the preparation of false tax returns in a scheme using Castle Bank & Trust.
See also
- Air America
- Allegations of CIA drug trafficking
- Bank of Credit and Commerce International
- CIA involvement in Contra cocaine trafficking
- Nugan Hand Bank
- Panama Papers
- Riggs Bank
- War on Drugs
References
- ^ Drinkhall, Jim (24 April 1980). "CIA Helped Quash Major, Star-Studded Tax Evasion Case". The Washington Post. ISSN 0190-8286. Retrieved 18 July 2017.
- Are Bahamas Banks Offering Tax Haven? The Pittsburgh Press 30 December 1975
- Second Bahaman bank goes under Star-News 26 May 1977
- Law Agencies Probing Caribbean Tax Havens Sarasota Herald-Tribune 25 April 1976
- IRS Resumes Probe of Secret Offshore Accounts The Milwaukee Sentinel 27 December 1975
- Conflict at IRS? by Jack Anderson The Telegraph 25 October 1976
- "Attorney is Acquitted of Tax-Evasion Charges". The New York Times. 13 September 1977. p. 47. Retrieved 19 August 2020.
- Loop lawyer convicted in tax fraud scheme Chicago Tribune 25 February 1982
Further reading
- Lernoux, Penny (1984). In Banks We Trust. Garden City, N.Y.: Anchor Press. ISBN 978-0385183291. OCLC 230577909.
- Kwitny, Jonathan (1987). The Crimes of Patriots : A True Tale of Dope, Dirty Money, and the CIA. W.W. Norton. ISBN 978-0393336658. OCLC 17951806.
- Block, Alan A. (1991). Masters of Paradise: Organized Crime and the Internal Revenue Service in the Bahamas. Transaction Publishers. ISBN 978-0887383823. OCLC 1079860930.
- McCoy, Alfred W. (2003). The Politics of Heroin: CIA Complicity in the Global Drug Trade. New York, New York: Lawrence Hill Books. ISBN 978-1556524837. OCLC 1131449293.
- CBS Television "60 Minutes" The Castle Bank Caper 21 November 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.
- "Congressional Oversight of the Internal Revenue Service" (PDF). 94th Congress, U.S. House of Representatives Congressional Record. CXXI (1st Session ~ Part 28). Congress.gov: 35983–35984. 11 November 1975.
