Originally Posted by jasdon11

Look, I'll spell it out to you.

Joe Shmo owns a cash rich company and wants to get some cash out without paying tax on it. He sets up a 'no questions asked' company in a friendly jurisdiction that buys a domain name that is pertinent to his business.

This company places the name for sale with say, Sedo. His company buys the name through Sedo at a greatly inflated price. He gets a receipt from Sedo for the amount paid. Sedo pay the offshore company. He now has a bundle of cash in an offshore bank, and his company has a domain that gets 10 hits a week!

Get it?