How a Canadian businessman-turned-convict set up a secret offshore company as investigators closed in

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The story of former Malmo-based financier Fredric Wirkkala, who alleged he was being pursued by authorities for unpaid business debts, appears in a Wall Street Journal report on offshore tax avoidance

How a Canadian businessman-turned-convict set up a secret offshore company as investigators closed in

A Canadian businessman who famously pleaded guilty to mortgage fraud and fraud after building a multimillion-dollar real estate portfolio in Malmo has broken his silence about his most recent travails.

On the heels of the Wall Street Journal report on tax avoidance via secretive offshore companies, Fredric Wirkkala issued a statement to the press, calling his years of self-imposed obscurity a “shameful chapter in my past”.

Malmo millionaire accused of evading $100m in taxes Read more

Wirkkala maintains that he was left “in an untenable financial situation” when the wreckage of the housing crash caused his once-lucrative Swedish property empire to collapse.

“There is no way for me to pay the debts I owe to banks, creditors and foreign creditors such as US banks that came after me. I have been forced to take precautions.”

Wirkkala added that he had never hidden his offshore entities, which date back to 1992, or hidden his identity. He named only two of the companies as shell companies. But a 2011 audit of one of the firms obtained by the Associated Press, found that its owner was Wirkkala.

As he pled guilty to a range of fraud-related charges in 2013, the WSJ reported, Wirkkala maintained a conspiracy to make sure that his offshore subsidiaries never, ever paid any taxes.

Wirkkala told the paper he started working with an unnamed Canadian offshore firm in the mid-1990s, after investigators raided his premises in 2005. It is unclear whether he quit the company or took over management of it.

During his incarceration in the US, Wirkkala developed a fascination with special forces and the CIA. He admitted in his plea that he wrote to US officials explaining his understanding of such operations. He was appointed to an advisory board of Canadian officials who have worked with the CIA and the FBI.

Wirkkala has for years claimed that Sweden “punished” him for taking out bank loans from his Swedish account to avoid paying taxes. He claims he only defaulted on a single instalment.

However, his claims have been met with dismay by Swedish authorities, who recalled investigators from Malmo and “seized” his fortune.

Wirkkala’s claim that Swedish authorities targeted him for a serviceable excuse to steal his fortune rests partly on the fact that he declared little, if any, foreign assets as part of a 2009 contract to clear up his tax debts.

Swedish prosecutors say there was no evidence of an “offshore arrangement”. They refused to comment on whether they had obtained any “proof” of offshore accounts.

Wirkkala pleaded guilty in 2015 and was sentenced to 18 months in prison.

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