IRS VS. CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-01208R000100100061-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: June 2, 2011
• Sequence Number: 61
• Publication Date: April 18, 1980
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2011/06/04: CIA-RDP90-01208R000100100061-5
ARTICLE
ON PAGE-
a few well-known organized-crime figures as-
ivell. The account holders controlled about a
quarter of a billiondollars' in. assets. To the
jubilant agents the list presented the. possl::
bility of the single. biggest tax-evasion-strike
in IRS history.
.,=,'._ _: ?.. :'
returned to. the woman's. apartment and;:for.
the time being at least4* the banker:was none'
the wiser. .:`r
A Rich Haul::;;
The photographed documents were "a:re-
velation. One of them was a.computer print--
out of the bank's account. holders-some::308
names, including not only nationally,known.
U.S. businessmen and.entertainers but"quite.
NASSAU; Baliamas -One of 'the more tii .
Mating business stories that somehow man-'
' aged to reach the public prints in-the last
decade was thelgreat-Castle Bank caper.
Remember? It-. was .. the: escapade'.: in
which two Internal. Revenue Service agents
outdid themselves as sleuths only.'to;?have
their chief throw.'out-their hard-gained..evi-
Bence of possible., massive `tax:.evasion.: as
inadmissible: ^i 'r r
For years... IRS'.' agents.-had-been. rying
without muchhsuccess;=to:?obtain.documen=
tart': proof that Americans were using off-
shore barks in. the Caribbean to.bide- income
and: evade taxes.: One of. the suspect banks
was the privatelyoxned. Nassau-based Cas
.tie Bank;&'.Trust,-(Bahamas)- Ltd _?So.on&
night in 1973, :while an official of. the Castle
Bank was having . dinner. at a posh Key 'Bis-
cayne. - Fla.,- restaurant: with: a woman an
IRS informant had hired-as a decoy,the in-:
formant let himself into her:apartment, took
the banker's. briefcase and gave. it;to??two
IRS agents. After: photographing the brief-.?
case's contents..the agents had the briefcase
THE WALL STREET JOURNAL
18 April 1980
Their elation eventually faded, ho'
after Donald Alexander, then the IRS
missioner., announced that Project - F.
.as the Caribbean investigation wac
was being suspended because the sui
tious acquisition of the list was an
search-.' The Justice Department,
tlaunchei agrand-juryinvestigation
the IRS dropped out of the picture, s
'977 that it, too, was bowing out bec2
;federal district court judge had rule
A he list had been illegally obtained.-
It
It now appears that pressure fro.
Central Intelligence Agency, rather tht
Iegal problem, was what caused the J
Department to drop what. could have
the biggest tax-evasion case of all
Nloreover,..the supposed. legal obsta
using the Castle 'Bank depositors': ifs
questionable at- best-the- governme
ready had in its possession the same I
.gaily obtained. :: ;L :.....
What caused the Justice' Departm
back off seems to have been the CIA's
ment that pursuit of the Castle Bank s
endanger "national security." This was m-
. oived because the bank, besides its possible
use as a haven for tax evaders, was the con-
duit for millions of dollars earmarked by the
CIA for the funding of clandestine opera-
tions against Cuba and for other covert in-
telligence operations directed at countries in
Latin America and the Far East. A major
tax-evasion investigation of the bank proba-
bly would have endangered these CIA opera-
The case has current significance be-
cause Congress at the moment. is consider-
ing a new CIA-'charter that would give con-
gressional committees and: the- courts. ad-
vance notice of:.such :undercover: or `front
operations:"
Castle :.Bank-was : set: up."and principally
controlled:by'the late Paul' Lionel 'Edward
Helliwell; -a .Nliami*. lawyer.' Mr Helliwell,-
who had longstanding ties to the U:S: intelli
gence community, was instrumental in help
ing to direct a network of CIA undercover
operations and -"proprietaries," ..(A .proprie-
tary is- a. concern secretly set up :and con-.
trolled by the CIA, ostensibly as a legitimate
business.T.;:.:.,;?: ...... ..: ..:::.`,~' ?::.;.:.
Despite' repeated requests for. comment,'
officials at the-CIA. Justice Department and
.the Helliwell law firm refuse'to discuss the
'case. Castle -Bank, which' closed its opera-
tions in the- Bahamas and Cayman Islands
in 1977.: is currently based in Panama, but
apparently ? has' no offices. there.: Although
the government. has never - released the
..names of 'Castle. Bank's 1973 'account hold?-
'ers, a copy of the list was reviewed'by this
.-ice -... _....-...~
names of foreign entities, mostly Bahamian
''or Panamanian. according to the list. Other
documents in Nassau show that the common
thread of these companies is that they were
mostly formed or controlled..by Paul iielIi-
well and.his associates.
The gruff Mr. Helliwell, 62 when he died
on Christmas Eve. 1976, from emphysema
complications, was no stranger to the mur.'cy
world.of spying. During World. War II, he?
was chief of special intelligence in China for
the Office of Strategic. Services, or OSS, the,
forerunner of the CIA.
Colleagues from those days- recall that'
Mr. Helliwell, then a colonel; regularly used
to buy -information with five-pound ship-
ments'of opium ("three sticky brown bars,"
according to one man). They also say he r.1n
an operation code-nained "Deer Mission," in
which OSS personnel secretly parachuted
into Indochina`to treat Ho Chi Minh for ma-
laria.
In 1951; -,Mr.- Helliwell helped set, up and
run Sea Supply Corp., a concern- controlled
by the CIA as a front. For almost?10 years,
Sea . Supply- was used -to-, supply huge',
amounts of weapons and equipment to 10,0)0
Nationalist Chinese troops in Burma-as well
as to Thailand's police.
One former federal official' who-helped
scrutinize Castle says,' "Castle was one of!
the CIA's-finance channels for operations
against Cuba." Mr.. Helliwell reputedly was
one of the. paymasters for the. ill-fated Bay
of Pigs invasion in 1961, as well as for other
"extensive" CIA ' operations. throughout
Latin America-..In particular. the: former
federal official 'says,.: Mir::. Helliwell was
"deeply.involved" iii-financing a series of
covert forays between 1964 and 1975?against
Cuba by CIA operatives working from An-
Bros Island; the largest of the. Bahamian is-
II- Sanitized Copy Approved for Release 2011/06/04: CIA-RDP90-01208R000100100061-5 __ ~T,Ttr .TI