Italian Police Break Up Antarctic Tax Haven Citizenship Scam

By: William Hoke

Italian police have arrested 12 individuals for their alleged roles in selling citizenships to a bogus country in Antarctica that they claimed has a 5 percent income tax rate.

In an August 18 statement, the national police agency said the group duped over 700 people into paying between €200 and €1,000 each to become citizens of the Antarctic Theocratic State of St. George. “To validate the existence of the state, the members of the criminal group created a whole series of various institutions, an official gazette, a website, as well as identity documents that were also valid for expatriation,” it said.

In addition to the low tax rate, buyers were told they had “the possibility of receiving funding for one’s own research projects, of benefiting from a leaner bureaucracy for one’s own businesses, and of receiving government documents to circulate freely in Italy and abroad,” the police agendy said. “In at least two cases, the sale of land in Antarctica was accompanied by a title of nobility.”

Citizenship in the icebound state would also allow medical professionals who had been suspended or removed from Italy’s national register to resume their careers, according to the statement.

The fraud netted approximately €400,000, with the proceeds laundered through a foreign account in Malta, the police said.

While the police statement didn’t include the names of the suspects, the Corriere della Sera newspaper reported August 18 that the leader of the fraud scheme is Mario Farnesi, a former high-ranking official in Italy’s financial police agency.

An internet search turned up a November 30, 2018, copy of the Italian-language edition of The Antarctic Tribune, which claimed to be a “news magazine owned by the Sovereign Antarctic State of Saint George, registered at the civil court of the City Station of Saint Anne.” The publication gave its location as 75 degrees 34 minutes south latitude and 140 degrees west longitude. The closest outpost of civilization to those coordinates is an abandoned Russian research station 70 miles away. The nearest population center is 2,300 miles to the northeast, in Tierra del Fuego, at the bottom of Argentina and Chile. (The website and an email address indicated for the publication are no longer valid.)

Andrea Carinci, a tax professor at the University of Bologna, told Tax Notes that the scam appears to have been elaborate. “They organized a very well-structured fraud with fake offices, fake documents, and fake agents,” he said.

Stefano Grilli, a lawyer with Withers in Milan, said he wasn’t surprised that so many people were taken in by the fraud. “The world is full of dummies,” he said.

“People can believe anything,” Carinci said. “Just think about the people who believe the Earth is flat. If you promise to reduce taxes and [do] other things that are desired by certain people, and you do it for a reasonable price, you can find many followers. People think that anything is possible. Many [of them] probably have no idea where Antarctica is.”