Elvis Stojko took out $ 6.5million life insurance on his parents and says he has no idea why it ended up overseas
Elvis didn’t feel like a king. The three-time world champion figure skater saw his hopes for an Olympic gold medal at the 1998 Winter Games dashed by injury. For years, he says, it left him feeling like a failure for Canada and shaken by doubts.
Even the silver lining of over $ 1 million in prizes and endorsement money from his many gravity-defying hits on the ice provided little to the joy. So, in the early 2000s, Elvis Stojko packed his bags, left the money in the hands of a lawyer he trusted, and moved to Mexico to “try to heal,” he says.
“Thanks to all the past issues, failure and doubt as an athlete, my financial matters weren’t really on the top of my mind,” Stojko told CBC News last week in an email.
It turns out that the small fortune he left behind – a life insurance policy on his parents, worth up to $ 6.5 million upon their death – eventually emigrated as well.
The relocation of Elvis Stojko’s assets is revealed in the Pandora Papers, considered the biggest financial data leak from tax havens. Obtained by the Washington-based International Consortium of Investigative Journalists and shared with its media partners around the world, including CBC News, the 11.9 million files raise the curtain on billions of dollars in wealth held in offshore accounts by politicians, celebrities, royals. , criminals – and many athletes.
Stojko is one of them, although there is no indication in the leaked documents that anything he did was illegal. However, the documents do highlight the ways in which offshore transactions like the one that brought 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 Montreal lawyer named TR Anthony Malcolm. Passionate about Scottish heritage who wore kilts to family weddings and led the town’s St. Andrew’s Society for several years, Malcolm was known as a specialist in tax havens.
“He was the kind of lawyer you would go to when you wanted to move money out of the country,” said Robert Salagan, a musician from Laval, Que., Whose ex-wife worked as secretary of Malcolm for almost 20 years.
At the time, Malcolm was in hot water. His name had made headlines for his role in a major investment scandal in Canada, the collapse of the $ 800 million hedge fund Portus Alternative Asset Management. At the behest of one of the founders of Portus, Malcolm funneled the company’s money into accounts in the Caribbean, before some of it disappeared. Unlike the founders of the company, he has never been charged with criminal wrongdoing.
Stojko said he had met Malcolm long before, in the mid-1990s, and the lawyer had become “like a second father” to him.
“Mr. Malcolm took care of all the financial matters as it was a pain point for me as it related to my skating failure,” Stojko replied via email in response to the questions. “I trusted him with the details knowing they were over my head.”
Some of these details appear in the Pandora Papers. Leaked files show that in 2007, a year after Stojko retired from skating, Malcolm established a trust in Belize called the Quad Trust, echoing Stojko’s signing jump. Then they changed the life insurance policy for Stojko’s parents: instead of donating the proceeds to a special fund managed by Skate Canada that athletes can use to legally protect their income and protect their amateur status, the police would pay the money to the Quad Trust.
In its founding documents, the Quad Trust designated the Red Cross and The Salvation Army as the only entities eligible to receive any of these insurance sums or other assets. But soon after, charities were crushed in favor of Stojko and, in the event of his death, two of his friends.
Stojko told CBC he had no idea why this had happened and simply left the details to his lawyer. “I was in no mood to question his recommendation at the time, and I was not involved in any decision regarding the details,” he wrote.
He also said he had no idea why Malcolm chose Belize and didn’t even know he had until CBC brought him to his attention.
“While I was vaguely aware that he had created a trust, I had no idea it was in Belize,” Stojko said. “I’m an athlete and an artist, not a financial professional and honestly I hate dealing with this.”
At the time, said David Duff, professor of tax law at the University of British Columbia, Belize was a country with “little or no income taxes.”
“So it’s a good place to park money and earn tax-free income. There were also, during the period you’re talking about, privacy laws that prevented information sharing.”
Another tax expert, Calgary lawyer Jonathan Garbutt, said the Belize trust would have protected Stojko from anyone in Canada trying to extract money from him. “You’re going to be able to protect your assets from Canadian family law, litigation against you in Canada that may or may not be earned, or, you know, people who are just trying to shake the money tree.”
Malcolm, who usually dictated letters to his secretary and mailed them, stressed the need for discretion in a letter sent to the trustees of the Quad Trust in Belize.
“Please keep these records in a safe place with your records and in complete discretion and confidentiality, free from any public inspection or indeed any inspection whatsoever, except by the insured, Mr. Stojko,” said writes Malcolm, who died in 2013.
Garbutt said this was an odd instruction to give to directors of an offshore trust, as tax havens usually already have strict confidentiality rules.
But Stojko said the instruction made perfect sense for him. “It should go without saying that as a personality with a public profile, my lawyer respected and sought to protect my desire for confidentiality with regard to my personal affairs.”
Skate Canada will not comment
As any eventual insurance payment – valued at up to $ 6.5 million – was transferred from Skate Canada’s tax-deferred amateur athlete trust fund, the organization had to approve the transaction.
CBC News asked Skate Canada if there were any concerns about Stojko’s assets being sent to an overseas tax haven, or about the attorney simultaneously handling the skater’s finances and pushing them back. charges of aiding massive hedge fund fraud.
Skate Canada, which received over $ 1.5 million a year in federal funding during those years, declined to comment, saying it “has no value to add to the subject.” Its then CEO, attorney William Thompson, said in an email that all money Skate Canada holds in its amateur athlete fund is “administered in the name and under the direction of the affected athlete and the athlete is free to engage in his own planning. ”
The whole arrangement ended in 2012. Stojko said he told his lawyer’s office that “it was really no use” for him, so he asked them to shut it down.
He said he was unsure if his trust had ever been audited and, in response to a question about whether his trust had ever paid taxes in Canada or Mexico, he said said he was “not really involved” and relied on “his lawyer’s claims that everything was being done in a consistent manner.”
Garbutt, the Calgary tax expert, said the trust probably wouldn’t have been subject to tax in Canada or Belize anyway.
In 2014, Stojko returned to Canada with his wife, a Mexican national figure skating champion.