The firm’s managing partner was not having a good spring. Every day there was another story about Mossack Fonseca and the Panama Papers, and generally making bad press for lawyers who earn their daily bread with offshore accounts. Just today there was a story about multibillionaire who was building a vacation home on the Moon but had not paid any tax since 1991.
An associate knocked at the half-open door and walked in.
“Sir, you wanted to see me?”
“Yes, yes,” said the partner. “Come in. Can you believe these stories? The way they write these things, you’d think that hiding assets to pay less tax was wrong. Don’t they know that tax evasion is what made this country great?”
“They should study their history, sir.”
“We need to come up with a response to this. This firm has been in this business two hundred years. Our first clients hired us to avoid taxes under the Stamp Act. We can’t very well just give up on our core business. But we can’t lead our clients into potential prison-situations, either. What we need is a creative solution, a way to hide assets that will not be noticed by the IRS or those nosey journalists.”
So began the great transition from hiding the clients’ assets in offshore accounts, to hiding the assets underneath beds. The firm built a giant warehouse in the middle of nowhere, and filled it with beds, and stored the clients’ money under the beds. The clients had no idea where the money was, thinking that names like “Queen Size with Headboard, LLC” were for holding companies.
To deflect any suspicion that might be raised by so many beds being shipped to a remote location, the firm established a bed ‘n’ breakfast on the grounds of the warehouse, and invited real, paying guests to sleep on the beds that, unbeknownst to the guests, hid the assets of the firm’s clients.
The guests however became very uncomfortable. They began to complain about the beds. “My bed felt like there was a large lump in it. I would like to be moved.” So the firm had to move these people to beds that did not have as much money hidden under them. This would be fine, unless the firm’s real client needed to stash assets in the middle of the night.
This happened more often than one would have believed. The firm would have to move the bed ‘n’ breakfast guest to another room while the additional funds were stored underneath the guest’s bed. The guest would usually be irate. “What do you mean you need the bed? I’m a paying guest! I was very cozy in there. I had the pillows set up just the way I like and now I have to leave so you can put someone else in there. Nice hotel you’ve got here – pulling a paying guest out of bed because you have someone more important who needs to sleep.”
Although the firm would give the guest its sincerest apologies and would even take a large percentage off the final bill, apologies and discounts go only so far in the hospitality business, and gradually the guest complaints for being moved in the middle of the night grew to such a large number that the government launched an investigation, believing that this was a case of discrimination against less-important guests.
It did not take long for the Internet outrage to arise. Hashtags like #SecondClassSleeper and #NoBedNBreakfast abounded and every day there were more and more calls from around the nation and the world for the President of the hotel to step down and for the hotel’s Board of Directors to adopt an “all guests are created equal” policy and be subjected to periodic audits and sensitivity training.
Of course there was no hotel president or board of directors because there was no hotel at all. It was just the law firm operating the hotel as a front for its asset hiding business on behalf of wealthy clients. The law firm’s management committee realized it had no choice but to admit that it wasn’t really a hotel. Perhaps they would all go to jail for tax fraud, but anything was better than sensitivity training.
When they did admit the truth, though, no one seemed as excited anymore. Once they realized this was just a boring tax evasion issue they tuned out. Even the government officials leading the investigation became bored and looked for someone else to bother.
But the law firm’s victory was short lived. Although the threat of government prosecution was past, the firm’s clients were disappointed in the business model. They had imagined their money in Swiss bank accounts and Cayman Island corporations that existed not even on paper, but on pieces of onion skin. Once they knew that their money was just sitting under beds with strange people sleeping atop them, they withdrew their money and spent it all on greeting cards. The experts were all predicting a bear market that year anyway.