Elvis Stojko took out $6.5M in life insurance on his parents and says he has no idea why it ended up offshore
Elvis wasn’t feeling like a king. The three-time world-champion figure skater had seen his hopes for Olympic gold at the 1998 Winter Games dashed by injury. For years afterward, he says, it left him feeling like a failure to Canada and racked with self-doubt.
Even the silver lining of more than a million dollars in prize and endorsement money from his many gravity-defying successes on ice provided little cheer. So in the early 2000s, Elvis Stojko packed up, left the money in the hands of a lawyer he trusted, and moved to Mexico to “try to heal,” he says.
“Dealing with all the past issues, failure and doubt as an athlete, my financial matters were not really at the forefront of my mind,” Stojko told CBC News last week in an email.
It turns out the small fortune he left behind — a life insurance policy on his parents, potentially worth up to $6.5 million upon their demise — eventually emigrated, too.
The offshoring of Elvis Stojko’s assets is revealed in the Pandora Papers, said to be the biggest ever leak of financial data from tax havens. Obtained by the Washington-based International Consortium of Investigative Journalists and shared with its partner media outlets around the world, including CBC News, the 11.9 million files pull back the curtain on billions of dollars in wealth held in offshore accounts by politicians, celebrities, royals, criminals — and numerous athletes.
Stojko is one of them, though there is no suggestion in the leaked records that anything he did was illegal. However, the documents do highlight the ways offshore transactions like the one that took his money to a trust account in the Caribbean can put a premium on secrecy, at the expense of scrutiny.
Lawyer named in hedge fund scandal
The mastermind behind Stojko’s financial planning was a lawyer from Montreal named T.R. Anthony Malcolm. A Scottish heritage enthusiast who wore kilts to family weddings and headed the city’s St. Andrew’s Society for several years, Malcolm was known as a tax haven specialist.
“He was the kind of lawyer you went to see when you wanted to move money out of the country,” said Robert Salagan, a musician from Laval, Que., whose ex-wife worked as Malcolm’s secretary for nearly 20 years.
At the time, Malcolm was in some hot water. His name had appeared in newspaper headlines for his role in a major Canadian investing scandal, the collapse of the $800-million Portus Alternative Asset Management hedge fund. At the behest of one of Portus’s founders, Malcolm had funnelled company money into accounts in the Caribbean, before some of it disappeared. Unlike the company’s founders though, he was never accused of any criminal wrongdoing.
Stojko said he met Malcolm long before, in the mid-1990s, and the lawyer became “like a second father” to him.
“Mr. Malcolm looked after all financial matters since it was a point of pain for me since it was attached to my skating failure,” Stojko emailed in response to questions. “I trusted him with the details knowing that they were over my head.”
Some of those details emerge in the Pandora Papers. The leaked files show that in 2007, a year after Stojko retired from skating, Malcolm set up a trust in Belize named the Quad Trust, echoing Stojko’s signature jump. Then they changed the life insurance policy on Stojko’s parents: Instead of paying out the proceeds to a special fund run by Skate Canada that athletes can use to legally shelter income and protect their amateur status, the policy would pay the money into the Quad Trust.
In its founding documents, the Quad Trust named the Red Cross and Salvation Army as the only entities eligible to receive any of that insurance money or other assets. But shortly after, the charities were overwritten in favour of Stojko and, in the event of his death, two of his friends.
Stojko told CBC he has no idea why this happened, and simply left the finer points up to his lawyer. “I was not of a mind at that time to question his recommendation, nor was I involved in any decisions regarding the details,” he wrote.
He also said he has no clue why Malcolm chose Belize, and indeed didn’t even know that he had until the CBC brought it to his attention.
“While I was vaguely aware of him setting up a trust, I was not aware that it was in Belize,” Stojko said. “I am an athlete and an artist not a financial professional and honestly, I hate dealing with it.”
At the time, said David Duff, a tax law professor at the University of British Columbia, Belize was a country with “low or non-existent income taxes.”
“So it’s a good place to park money and earn tax-free returns. It also, during the period that you’re talking about, had confidentiality laws that prevented sharing of information.”
Another tax expert, lawyer Jonathan Garbutt of Calgary, said the Belize trust would have shielded Stojko from anyone in Canada trying to get money from him. “You are going to be able to protect your assets from Canadian family law, from litigation against you in Canada that may or may not be deserved, or may or may not be legitimate, people just trying to shake the money tree.”
Malcolm, who typically dictated letters to his secretary and sent them by post, stressed the need for discretion in a missive mailed to the Quad Trust’s administrators in Belize.
“Kindly keep these records in safekeeping with your records and in complete discretion and confidence, not open to any public inspection or, indeed, any inspection whatsoever, except by the insured, Mr. Stojko,” wrote Malcolm, who passed away in 2013.
Garbutt said it’s a bizarre instruction to give to the administrators of an offshore trust, since tax havens usually already have strong confidentiality rules.
But Stojko said the instruction made perfect sense to him. “It should be self-evident that as a figure with a public profile my lawyer respected, and sought to guard, my desire for privacy with respect to my personal matters.”
Skate Canada won’t comment
Because any eventual insurance payout — worth up to $6.5 million — was being transferred away from Skate Canada’s tax-deferred amateur athlete trust fund, the organization had to sign off on the transaction.
CBC News asked Skate Canada whether there were any concerns about sending Stojko’s assets to an offshore tax haven, or about the lawyer who was simultaneously handling the skater’s finances and fighting off accusations of helping a massive hedge fund fraud.
Skate Canada, which was receiving more than $1.5 million annually in federal funding in those years, would not comment, saying it “does not have any value to add to the topic.” Its then-CEO, lawyer William Thompson, said in an email that any money Skate Canada holds in its amateur athlete fund is “administered on behalf of and at the direction of the relevant athlete and the athlete is free to engage in their own planning.”
The whole arrangement wound down in 2012. Stojko said he told his lawyer’s office that “it really served no purpose” for him so he asked them to close it.
He said he didn’t know whether his trust was ever audited, and in response to a question about whether his trust ever paid taxes in Canada or Mexico, said he had “no real involvement” in it and trusted his “lawyer’s assertions that all was being done in a compliant manner.”
Garbutt, the tax expert from Calgary, said the trust probably wouldn’t have faced any tax liability in Canada or Belize anyway.
In 2014, Stojko moved back to Canada with his wife, a Mexican national figure skating champion.
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