“Shell companies have come under attack for obscuring illicit money flowing into real estate. But it turns out they’re also a problem for the Pentagon. Some Defense Department suppliers have used such front companies to fraudulently win manufacturing bids, according to a U.S. Government Accountability Office study of Defense Department contractors..."Read More
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GAO Reports Shell Company Threat to Department of Defense
A recent report by the GAO identified anonymous shell companies as a national security risk to the Department of Defense.
The report found foreign manufacturers were using shell companies to supply defective military parts and acquire sensitive data.
The Corporate Transparency Act Legislative Status
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“With House committee passage of the Corporate Transparency Act, and the introduction of a Senate companion bill that enjoys bipartisan support, the momentum is now firmly behind an effort to finally close legal loopholes that allow criminals to hide behind anonymous shell companies…The solution presented in these bills is amazingly, shockingly simple..."Read More
“By many accounts, the U.S. is one of the largest havens for money laundering and tax evasion. A United Nations report, confirmed by the Treasury Department, estimated $300 billion in illicit proceeds flowed through the U.S. financial system in 2010…The U.S. is a popular destination for despots to deposit ill-gotten gains in large part because of its corporate registration systems, or lack thereof..."Read More
“The U.N. Office on Drugs and Crimes estimates that global illicit proceeds total more than $2 trillion annually, and proceeds of crime generated in the United States were estimated to total approximately $300 billion in 2010. For an illegal enterprise to succeed, criminals must be able to hide, move, and access these illicit proceeds—often resorting to money laundering…"Read More
“The United States has become one of the go-to destinations for the creation of anonymous shell companies, allowing human traffickers, terrorists, money launderers, sanctions evaders, kleptocrats, and other criminals to promote criminal activities...banking laws designed to detect and combat money laundering and illicit financial activities haven’t been updated comprehensively in decades…"Read More
“Companies are incorporated at the state level, but federal lawmakers are searching for a way to oversee the process. They have tried for a decade to pass a bill that would require companies to identify their owners at the time they are formed, but certain states, including Delaware, have balked...Earlier this month, however, a key Delaware official endorsed proposed federal changes..."Read More
“Banks face increased challenges in complying with anti-money-laundering laws that could be mitigated if states mandated the collection of accurate information on owners when a corporation first registers as an LLC, Comptroller of the Currency Joseph Otting said Monday. Otting called for the creation of a database that would allow financial institutions to obtain and validate information..."Read More
“The anonymous shell company—which has no identifiable owner and exists only to hold or transfer value—lurks beneath many of America’s mounting problems. The opioid crisis? Shell companies are used to mask the shipping and distribution of fentanyl, which is mostly manufactured in China. Election interference? Russia used shell companies to funnel money and information to the Internet Research Agency, which fed the trolls involved in nefarious internet political influence schemes..."Read More
“We need to be able to figure out an efficient and prudent way that we have access to beneficial ownership,’ said Mr. Mnuchin. ‘We’ve got to figure out this beneficial ownership [issue] in the next six months,’ he added. ‘I don’t want to be coming back here next year and we don’t have this solved. International watchdogs have flagged U.S. failures on incorporation transparency..."Read More
“Nearly 2 million corporations and limited liability companies are registered each year in the United States, at the state level. Few states require companies to disclose their true owners, with Delaware and a few others turning the registration of anonymous companies into big business...Tax Justice Network last year named the United States the globe’s second most financially secretive jurisdiction..."Read More