UK's Scientology's Tax Evasion and Money Laundering

Discussion in 'Legal and Government Actions Involving Scientology' started by mate, Dec 23, 2009.

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  1. mate

    mate Patron Meritorious

    I had posted the following observation on another thread, then realised that it deserves its own thread as it could get a major investigation underway, into the corporation of scientology in the UK.

    The Church of Scientology has registered the name, “Church of Scientology Religious Education College Incorporated”. This is a South Australian registered association (Registration Number A5172), which I believe has a registered office in the Church of Scientology of Adelaide at 18 Waymouth St, Adelaide, SA 5000.

    Overseas corporate accounts were set up with the National Westminster Bank in the UK. The accounts were/are called Church of Scientology Religious Education College Incorporated AOSHUK Finance Office No 1 Account, Church of Scientology Religious Education College Incorporated AOSHUK Finance Office Account No 2. As far as I can determine, the funds in those two accounts were dispersed to other overseas corporate accounts with the National Westminster Bank called the Church of Scientology Religious Education College Incorporated Main Accounts, Church of Scientology Religious Education College Incorporated Reserve Accounts, Church of Scientology Religious Education College Incorporated HCO Accounts of the various scientology organisations in the UK, however, most of the money was remitted to the US. None of the funds were remitted to Australia, whatsoever, and no tax was paid in Australia. It should also be noted that
    I suspect that the use of the name “Church of Scientology Religious Education College Incorporated” was chosen because it would have led the UK bank, the National Westminster Bank to consider it a genuine corporation rather than a registered association, and so bound by corporate law rather than having few, if any, rules. So as a result the bank would assume that income tax would be paid in Australia, which of course, it wasn’t.

    As I understand it, the system was set up in the early ‘70s, by Herbert G. Parkhouse who was the Deputy Guardian for Finance in the Guardian Office World Wide, and this was not only prior to the scientology corporation being granted tax exemption in Australia in 1983, but it was probably before the Whitlam Labor government recognized the Church of the New Faith, as the scientology corporation was then known in Australia, as a religious organization and could provide a marriage service in 1973.

    It should also be noted that Church of Scientology Religious Education College Incorporated was never registered as a charity nor did it apply for such.

    Not only is this tax evasion, but also it is money laundering.

    If I may be so bold, I would like to suggest to those of you, who are who are UK citizens, to provide this information to HM Revenue and Customs, your local member of parliament, and to members of the House of Lords.

    It is about time we had some action in the UK, don't you think?

    Regards, David.
     
  2. Daedle

    Daedle Patron

    I've tried to speak to my MP about it but I think he was too busy switching his primary/secondary home - I got no response to my 3 letters other than "Thanks for your letter - I've put you on my mailing list now."
     
  3. La La Lou Lou

    La La Lou Lou Crusader

    Hi Mate, but that doesnt include the IAS funds does it?

    I understood that they were all kept in the UK, and how about Sea Org Reserves?

    I doubt if it's all under one roof, should emagine that there's loads of banks.

    What a tragedy it would be if the bank it's all in went tits up!
     
  4. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    I haven't checked into this particularly, but surely "Incorporated" would be a protected name? In other words, a group could not get away with having the word as part of its name unless it were a legal corporation.

    Paul
     
  5. mate

    mate Patron Meritorious

    Hi Paul.
    In Australia, a "Corporation" is called a "Company" and is usually a Limited Liability (Ltd) Company or a Propriety Limited Liability (Pty Ltd) Company.The following link describes what an incorporated association is, in South Australia:

    http://www.ocba.sa.gov.au/Associations/

    Regards, David.
     
  6. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    Hi David,

    Thanks very much.

    Looking at that website, there is a link to a PDF on how to incorporate your new association and so forth: http://www.ocba.sa.gov.au/assets/files/Associations_Incorporation_Act_1985_web1.pdf. There are various ongoing statutory obligations listed there, which, knowing the CofS, are probably being flouted, one way or another.

    An incorporated association also needs to file a copy of its constitution, rules which it has to follow. Can we get access to that, do you know? I bet they're not following it. :)

    Paul
     
  7. mate

    mate Patron Meritorious

    Hi Paul.
    Note that on the PDF page 8, the association does not contain the word ‘Incorporated’ or the abbreviation ‘Inc.’ as part of and at the end of its name, however, I suspect that this requirement was part of the 1985 revisions of the act and was not retroactive.

    Also on page 8, we have,
    "Rules for your incorporated association
    An incorporated association must have its own set of rules that govern
    the day-to-day management of the association. A copy of these rules (also
    known as a constitution) must be lodged with the Office of Consumer and
    Business Affairs. The association’s rules are available to the public for
    payment of a fee."

    So I will call the South Australian Office of Consumer and Business Affairs later today.

    Regards, David.
     
  8. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    :woohoo:

    Paul
     
  9. mate

    mate Patron Meritorious

    Hi Guys.
    The S.A. Office of Consumer and Business Affairs does not have the early association documents in digital form as yet. For a small fee I can get an archive search they will then advise me of the total cost to photocopy it and when I've paid, it will be mailed to me. Apparently a search usually takes about two weeks and the total cycle about four weeks from the beginning of January.

    I will be getting on to it, on January 4th.

    David.
     
  10. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    Thanks very much David. This should be interesting. I bet this early association document will be in digital form soon. :)

    Paul
     
  11. mate

    mate Patron Meritorious

    The following article in the Advertiser, Adelaide’s major newspaper, opens up a new direction to tackle scientology’s tax evasion in the UK. The Liquor and Gambling Commissioner and his Minister Tom Koutsantonis, as well as the Productivity Commissioner, will be receiving full details.
    http://www.heraldsun.com.au/news/na...rgives-away-4900/story-e6frf7l6-1225814275430
     
  12. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    Hey David,

    Any update on this yet? :)

    Paul
     
  13. hartley

    hartley Patron with Honors

    I assume everyone is aware of previous investigations into the corporate structure of CoS(UK)? If not:

    http://solitarytrees.net/cowen/misc/ukstat.htm
    has data from 1998 and 2002 and

    http://www.timesonline.co.uk/tol/comment/faith/article1975105.ece
    from 2007

    Plus, there are UK Anons who have poked around as well, search and you will find. If nothing else, inquiries to the appropriate authorities alerts them to the existence of a highly dubious organisation that is undoubtedly playing the corporate shell game.
     
    Last edited: Jan 19, 2010
  14. RogerB

    RogerB Crusader

    Yes, all this title stuff can be tricky.

    I've had to operate in four legal jurisdictions as regards corporate law, this apart from owning "corporate" entities outside of the 4 jurisdictions I operated in.

    Up until about 1978 or so, the word "company" could be part of the title of an unincorporated partnership or even a registered business name of an individual in the UK and was the case in the Oz states I had businesses in.

    In the late 1970's the UK changed its designations and titling for incorporated businesses. PLC being dictated in the revised law to be used for publicly traded companies, and "Limited" reserved (and continued to be used) for privately own corporations.

    The word "incorporated" would have specific meaning and or no meaning depending on the jurisdiction it was used in. In England, it might simply signify that the entity simply has been incorporated with a charter . . . rather like a partnership agreement . . . and have no other legal meaning than that . . . or, as was the case when one had to register business names in England (which you no longer have to do) it simply is part of the business name as say, "Bill Bloggs & Company" Or, "The Nitpicker Business Association Incorporated."

    In the USA, in various states, the law requires the use of the words "Inc," or Incorporated, or "Corporation" or "Limited" which all signify that the business is a corporated entity, in legal terms, a "legal person" which means it is a synthetic person empowered to conduct business and has all of the rights and powers of a "real" person (that what the law actually says)

    I raise all this nonsense because it would be very easy for those who would wish to obfuscate and mislead to use these circumstances for banking purposes and possibly illegal money management purposes.

    What we have so far is that there is a South Australian business entity whose particulars as to name etc., we are checking. The question then becomes: is this S.A. entity the actual entity with the UK bank accounts? Or do we have an entity of some other jurisdiction "owning" the account or doing business with the UK bank. I am not up to date on the UK law in regards business names . . . but last I heard, one no longer is required to have one's business name registered in the UK . . . though limited liability corporations must be.

    The key to this issue is, what does the UK bank think or see the account holder as, and what is the UK law on collecting monies from UK residents for services rendered in the UK and how must they be accounted for to the government, and ditto for monies claimed to be collected overseas.

    Paul, to your knowledge in regards services and or books, meter sales etc., in the UK; did the org have to collect VAT and account for such to the government?

    Rog
     
  15. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    When I was FBO AOSHUK around 1974/5 we collected VAT at the standard rate and every week I wrote a check for the amount collected to the VAT Reserve Account (a local account). In that way the money was set aside so that if we had to pay it, it was there. I don't recall if it was ever paid to the government or not. Each income invoice showed the correct amount for VAT, and regular audit packs were made up, so the records were in order too. Again, I don't know what was actually reported, but at that time it all seemed to be in order.

    Paul
     
  16. RogerB

    RogerB Crusader

    Well that indicates they were registered and operating in the UK as a business, or at least covering the bases in the event they had to cough up when pressed by the government.

    That info above by Hartley I did not see till after I posted. It tends to indicate “Church of Scientology Religious Education College Incorporated” is registered to do business in both S.A. and the UK. In other words, there is an Oz entity and a UK entity.

    So the question becomes, which one of the two is doing what with how much of the lolly where . . . that will be a bitch to untangle unless by way of some sort of government investigation with powers of subpoena.

    Rog
     
  17. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    I would think that any CofS UK invoice would have a VAT Registration Number on it. Isn't there a database somewhere one can access to see the exact entity corresponding to that number? There can't be two different official entities with the exact same name.

    Paul
     
  18. RogerB

    RogerB Crusader

    Yes, not registered in the same jurisdiction . . . if registration of the type of entity in question is required. We have been talking two exactly the same titled entities but "domiciled" or "registered" in different countries . . . that is very common. When I came to the US I owned Management Science Associates registered in London, and ditto registered here in the US. In law they were/are two distinct entities.

    According to Hartley's and Mate's info we have exactly the same name registered in two jurisdictions.

    I raised the VAT question to ascertain how the COS was playing things vis a vis the government in terms of visibility of cash flow.

    Tomorrow, I'll try and do an internet search on what Companies House UK says about Business Names et al. My memory tells me it is no longer required to register them. But the style of business entity the COS uses might require it or otherwise legal advice was that it was prudent to use a style that could be registered . . . hence Hartley's info showing the name appearing at Companies House. I'm out of date up there . . . I used to have agents doing checks there full time in my old days 30-35 years ago.

    The other side of the coin is that it is not uncommon to have a foreign business entity having a banking account in the UK, or any other country for that matter.

    Rog
     
  19. Dulloldfart

    Dulloldfart Squirrel Extraordinaire

    Hmmm. In that case, I'm confused, which is probably the idea of course. :)

    AOSHUK sent no money to Australia at all that I knew of. It operated as a UK operation. The letterhead said it was registered in Oz, and whatever paperwork existed existed, but to all intents and purposes it seemed to be a UK deal. I don't know if they pay VAT or not.

    It will be interesting to see the paperwork David comes up with, to see what they filed for an official constitution back in Oz.

    Paul
     
  20. mate

    mate Patron Meritorious

    Thank you hartley for those two references, they yielded some very important pieces of information. First we have the reason for setting up COSRECI. Initially it was to protect assets from an unfavourable Wollershein ruling, and then to protect UK assets by putting them under an Australian incorporated association, which would be seen as a corporation and deviously gaining tax exemption in the UK, under reciprocal UK-Australian tax rules.

    http://solitarytrees.net/cowen/misc/ukstat.htm

    I wonder if key US assets are ultimately owned by COSRECI.

    http://www.timesonline.co.uk/tol/com...cle1975105.ece

    This comment in the Times raises speculation as to who really owns COSRECI? Is it possible that the association members have signed undated resignations, other than Miscavige? I suspect that getting a membership list would be very revealing.

    Just a thought.

    Regards, David.
     

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