South Dakota’s lawmakers have insisted they don’t need to look into the state’s trust industry or enact new regulations to prevent the trusts from helping bad guys hide their money, because the trusts are all on the up and up. But we’ve already learned of one big trust helping launder drug money and not vetting its customers. Now dogged reporter Lee Strubinger gets an IRS agent on the record saying South Dakota trusts are holding assets for sanctioned Russian oligarchs:
Tom Larson, a supervisory special agent with the Internal Revenue Service, said the department has ten to 12 agents who are devoted to locating assets owned by Russian oligarchs who are subject to sanctions.
During an interview on SDPB’s In The Moment, Larson said some individuals are holding money outside of Russia right in South Dakota.
“We’ve found that some of that stuff is being held in trust in South Dakota,” Larson said. “We’ve had some of those agents who’ve worked with agents we have here to go and interview those people who run those trusts, and try to unravel where that money is coming from and who is the owner of it, the beneficial owner of it.”
…It’s unclear what South Dakota trust companies are holding these Russian assets, and at what level. Larson said the cases that have touched on South Dakota trusts are still under investigation [Lee Strubinger and Lori Walsh, “IRS Investigating Cases of Sanctioned Russian Assets in SD Trusts,” SDP Radio, 2023.09.08].
No wonder Governor Kristi Noem is pressuring other big South Dakota Republicans to back Donald Trump: she needs Trump back in office so he can pardon all the high-financiers on Phillips avenue for doing business with sanctioned Russians!
Noem may face a more complicated political question over the Chinese assets Agent Larson says the IRS is finding in South Dakota trusts:
“We also see a lot of Chinese individuals, business owners, and such, they want to keep their money out of the country—out of China, that is,” Larson said. “So they look at the US as a safe place to hold their money, but they also don’t want the Chinese government to know where the money is. So, they’re also doing it in trust in South Dakota because of the privacy laws that South Dakota has” [Strubinger and Walsh, 2023.09.08].
Noem has said she doesn’t want the state doing business with predatory Communist China. But the assets Larson is talking about here aren’t Chinese government assets; they are assets of individual Chinese investors using South Dakota’s trusts for what God and Republicans intended: hiding their money from their government so they can’t be taxed or regulated or otherwise bothered. Noem may thus want to spotlight those Chinese assets (well, not too brightly: Xi Jinping is watching) as evidence that even Chinese moneymakers recognize that South Dakota is a haven for freedom from socialism.