Offshore Bank Is FDIC Insured: Is This Bank Protected From Client’s U.S. Civil Creditors?

New client is confident he has protected a substantial of cash proceeds from the sale of a business by depositing the money in a bank branch in his native country of Ecuador. He is confident that none of his creditors could figure out how to domesticate a U.S. civil judgment in Ecuador. Even if they could domesticate a U.S. judgment in his country, the creditor would have to bribe the right government officials to levy on his account. I told him that most of my other asset protection clients would not feel comfortable having so much money in an Ecuadorian financial institution. No problem, he said, this Ecuador bank is covered by our FDIC insurance.

Really !?!. Does this dude think the U.S. government insures banks that are wholly offshore institutions with no U.S. presence? Isn’t more likely that this client has deposited his money in the Ecuadorian branch of a U.S. bank or at least a bank with offices or branches in the U.S. where the creditor can easily serve a writ of garnishment. General rule: if its FDIC insured it’s probably not an “offshore bank” beyond the reach of your creditors.

Last updated on May 22, 2020