Officials in South Dakota have figured out how to make up for the complete collapse of their oil fracking industry. They are morphing the Peace Garden State into a major offshore banking center.

South Dakota is not alone. Some 200,000 corporations, limited liability companies, and family trusts, are registered in remote Stateline, Nevada on the sparkling shores of Lake Tahoe.

And there has been a sudden outbreak of expensive John Lobb shoes, Turnbull & Asser shirts, and Brioni suits in rustic Cheyenne, Wyoming, as foreign bankers and their high paid tax attorneys descend on the city in droves.

Meet the United State of America, the new tax haven capital of the world.

Friends in the business tell me that accounts in Switzerland, the Cayman Islands, and the British Virgin Islands are being closed down by the tens of thousands and moved to the US shores.

Almost all of this money is being transferred by wealthy European, Middle Eastern, and Chinese families who are more interested in in “return of capital” than “return on capital.”

It’s best to pay a few dollars in American taxes than have your money expropriated by a corrupt and covetous foreign government, have your children kidnapped, or get stood up against a wall and shot.

The move is being prompted by the Obama administration, which pushed through the Foreign Account Tax Compliance Act of 2010, known as FACTA.

Its goal was to flush out wealthy Americans hiding income and assets abroad. The law saddles offshore banks with hefty penalties and fines for helping US citizens avoid the IRS.

Only last year, Rothschild Bank was hit with a $11.5 million fine for helping 300 Americans hide $794 million in assets.

The law has had the unintended consequence of bringing rich foreigners into compliance as well. It is almost impossible now to open a bank or brokerage account in a country that is not FACTA compliant.

You are really limited to the dubious domiciles of Nauru, Bahrain, and Vanuatu, all favorites of organized crime, drug dealers, and terrorist groups.