Loan-back

Quick meaning: Loan-back is a noun meaning A money laundering or tax avoidance scheme in which money is deposited in an offshore bank and then borrowed back by a shell company controlled by the holder of that bank account.

Meaning

A money laundering or tax avoidance scheme in which money is deposited in an offshore bank and then borrowed back by a shell company controlled by the holder of that bank account.

Example Sentences

He told them about the great secrecy havens – Switzerland, the Netherlands Antilles, the Cayman Islands, Liechtenstein – about dummy corporations and the byzantine loan-back systems which criminals had devised to cover their tracks.

It was Lansky who pioneered the “loan-back” technique. Money was moved in the form of cash, traveller's cheques, or bearer bonds for deposit in numbered Swiss accounts. The money then returned home in the form of "loans" to the person who had initiated the cycle, who would replay the loan with interest, deducting the interest from his taxable income as a business expense. Multinational corporations continue to use a variant of this scheme to reduce their tax obligations.

Word Forms

• loan-backs

Related Words

Related dictionary entries include loanback, loan, onloan, on-loan, leaseback, set-off.

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