Corruption and the resource curse: The case of Timor-Leste

In Timor-Leste, one of the newest nations in the world, a case of corruption is explored in this chapter, which is associated with the resource curse of official corruption. The case involves an expatriate tax lawyer who worked for the Ministry of Finance and orchestrated a 'taxation miracle' for 'his' adopted country. He was charged for a $3.51 million wire-fraud by the United States Department of Justice and subsequently sentenced to six years of imprisonment. However, the case was found to be more complex than simple fraud and official corruption. The findings indicate that the key elements that led to the fraud were a series of misadventures arising from issues of hiring, management, cybercrime, and weak internal controls. It has also been suggested that the fraud was allowed to perpetuate due to the collusion of several multinational resource companies, costing the Timor-Leste taxpayers as much as $176 million.