June 28, 2011
Monique Perry Danziger, +1 202 293 0740 ext. 222
Investigative piece sheds light on lax US incorporation practices
CHEYENNE/ATLANTA – An investigative piece published by Reuters today, “A little house of secrets on the Great Plains” looks at the lax incorporation requirements of US states with a focus on Wyoming Corporate Services, “a business-incorporation specialist that establishes firms which can be used as ‘shell’ companies, paper entities able to hide assets.” The “little house” in this case, is a 1,700-square-foot brick house in holds more than 2,000 registered companies.
No states license mass incorporators, and only a few require them to formally register with state authorities. None collect the names and addresses of “beneficial owners,” the individuals with a controlling interest in corporations, according to a 2009 report by the National Association of Secretaries of State, a group for state officials overseeing incorporation. Wyoming and Nevada allow the real owners of corporations to hide behind “nominee” officers and directors with no direct role in the business, often executives of the mass incorporator.
“Today’s Reuter’s story makes the clear point that US incorporation practices are in contrast to our international obligations and the US government’s active denunciation of secrecy jurisdictions and anonymous corporations,” said Global Financial Integrity Legislative Affairs Director and Legal Council, Heather Lowe. “Criminals, kleptocrats, and tax evaders from around the world take advantage of these loopholes in US law to hide and launder illicit money here.”
Senator Carl Levin is expected to introduce legislation soon that would close these loopholes. The Incorporation Transparency and Law Enforcement Assistance Act is expected to contain provisions that will require disclosure of the beneficial owner(s) of companies and strengthen existing anti-money-laundering statues on the books.
“Last year’s version of this bill had the staunch support of law enforcement groups, immigrations and customs agents, and the US Department of Justice,” said Ms. Lowe. “They recognize that anonymous US corporations undermine their law enforcement efforts and that the US should not be a safe destination for the proceeds of crime, corruption, and tax evasion.”
For more information about the Task Force on Financial Integrity and Economic Development, Raymond’s itinerary in India, or media booking inquiries please contact Monique Perry Danziger, +1-202-904-3113.