Caymans of the Rockies? No.

In 1999, Colorado passed the foreign capital depository act, which was designed to facilitate Cayman Islands style anonymity, creditor protection and tax evasion by non-U.S. citizens in Colorado. Getting into the legalized money laundering business was a bad idea that didn't pan out.

Backers tried to establish three institutions under the law.

One, Liberte International Corp. received a preliminary charter in 2001, but failed to raise its initial capital, and had its charter was revoked in December 2002.

American International Depository & Trust was established in 2003, but it was ordered liquidated last month because it was insolvent.

Tuus Financial was founded in 2005, and voluntarily shut its doors two months ago. It "has been dormant since August 2006, however, and garnered no deposits or funds. Its capital, provided by Geronimo, will be returned to the parent company."

Montana passed and then repealed a similar law.

Neither state secured any of the state revenue streams promised by backers. This isn't surprising.

No resident of the United States is eligible to be a customer, so there is no domestic customer benefit.

Money invested in this kind of institution (even in places like the Cayman Islands) gets invested on Wall Street in New York, not 17th Street in Denver. These kinds of institutions avoid investing in local businesses or real estate because they could be subject to state and federal taxes. In contrast, intangible assets held by non-residents are not subject to federal or Colorado income taxes. As a result, the local financial industry has no reason to support foreign capital depository institutions. Indeed, the local independent bankers association thinks that the law should be repealed.

A foreign capital depository run by a U.S. state is also unattractive to likely foreign customers. United States money laundering and anti-terrorism laws cast doubt on the legality of the entire enterprise of holding foreign assets in a manner designed to be secret and evade legitimate creditors. Since 9-11 stringent "know your customer" laws have been adopted that apply to both traditional financial institutions and less traditional ones (such as lawyers who hold client funds in trust accounts). The people who would be attracted to this kind of venture are people such as foreign organized criminals and foreign officials who sponsor terrorism, so know your customer laws make them nervous. Customers of an institution like this one are presumptively not protected by the same 4th Amendment protections that apply to U.S. citizens and residents, so they can be surveiled by U.S. intelligence agencies with secret national security letters under the Patriot Act.

Also, no state can grant any institution immunity from federal court subpoenas or the U.S. full faith and credit clause that requires recognition of domestic money judgements from sister states.

In any case, Colorado judges and citizens simply don't have the values that make similar tax havens abroad work. Legal protections from legitimate creditors, investigators and tax obligations only work if the people charged with carrying out those legal protection believe that some higher principle justifies protecting these wrongdoers. Judges can be very creative in circumventing laws that don't make sense. In tax havens, cynicism about the fair workings of the legal system, and the tremendous importance of the tax haven business to the local economy (along with a weak tradition of jury rights) encourages judges to go along with the unfairness present in particular cases. In Colorado, that level of cynicism is absent and the public benefit is negligible in a state with a vibrant diversified economy.

Even for financial advisers and attorneys who specialize in asset protection, there is little percentage in having foreign capital depositories in Colorado. The legal work can be done in Colorado (and often is by a handful of firms with that kind of practice) even if the assets to be hidden are invested in a traditional tax haven country. Also, an inability to serve domestic clients makes marketing a chore. People who want to hide their assets are also often ill equipped to get visas to come to Colorado to discuss their affairs. And, self-employed professionals in the business of helping people evade legitimate tax and creditor liabilities aren't always the most compliant in voluntarily disclosing and paying everything they owe to state and federal revenue officials. Even if the follow the letter of the law at home, they are likely to do everything they can do to minimize their liability.

These services also don't have a fat client base worldwide. A large share of the world's multimillionaires are Americans. The costs and risks involved in setting up these structures (and there are risks, some people who have done it have spent decades in prison for contempt of court) limit the number of clients in the world for whom they are attractive. Mere millionaires and members of the upper middle class can protect themselves quite adequately with liability insurance, and far less draconian domestic asset protection tools. These tools include conducting business through multiple corporations or limited liability companies, having clients and independent contractors sign liability waivers, entering into pre-nuptial agreements, and investing in creditor and tax protected vehicles like retirement accounts.