End Anonymous Shell Companies

"A months-long joint investigation between NBC Bay Area and NBC News found thousands of foreign students may have used false employment records at more than a dozen potential shell companies to illegally stay in the country after attending American universities...[using] the companies as steppingstones to land jobs at major U.S. firms..."

"Without naming China, the Pentagon's acquisitions chief warned Thursday of foreign adversaries using shell companies to buy into struggling small defense firms during the coronavirus pandemic. 'We see a lot of shell companies coming in where the beneficial owner ends up being one of our adversaries," Ellen Lord, the undersecretary of Defense for Acquisition and Sustainment, said in a Pentagon teleconference..."

"The jury, which deliberated for one day after a month of testimony, found that the Alavi Foundation, which owns 60 percent of the 36-floor skyscraper at 650 Fifth Avenue, violated United States sanctions against Iran and engaged in money laundering through its partnership with Assa Corporation, a shell company for an Iranian state-controlled bank that had owned the remaining 40 percent..."

“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..."

“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..."

“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..."

“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…"

“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…"

“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..."

“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..."

“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..."

“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..."

“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..."