Incorporation Transparency

FACT Sheet: Business Case for Ending Anonymous Companies (December 2018)

Anonymous companies are behind just about every financial crime.  They are the vehicle of choice for laundering money obtained through illicit activity.  Schemes involving terror financing and the trafficking of drugs, illegal weapons, and humans all use anonymous companies to move money, fund operations, and allow bad actors to escape with the proceeds of their crimes and impunity.

The pervasive use of secret shell companies has also begun to impact the broader economy.  As such, more and more businesses are speaking out.

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Statement on Matthew Whitaker

WASHINGTON, D.C. – In response to the news stories about Acting Attorney General Matthew Whitaker receiving payments from an anonymous company called the Foundation for Accountability and Civic Trust (FACT), the Financial Accountability and Corporate Transparency (FACT) Coalition, which has called for greater transparency and an end to anonymous companies, put out the following statement.

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The Paradise Papers: A Year Later

By Jacob Wills

This week marks the one-year anniversary of the release of The Paradise Papers, a leak that included 13 million documents from a large offshore law firm.  The leak detailed a number of tax avoidance techniques used by the wealthy and multinational corporations to avoid taxes.  At the same time, Congress was rushing to pass the Tax Cuts and Jobs Act.

In light of the Paradise Papers revelations, we encouraged lawmakers to carefully review the information from the leak and consider whether their overhaul would address the tax dodging practices exposed.  They chose not to do so.

Unlike the earlier Panama Papers story, where Americans were notably absent, the Paradise Papers had clear U.S. connections.  There was extensive data on the tax avoidance schemes of at least 31,000 U.S. citizens, residents, and companies including household names like Apple, Nike, and Uber.  Rather than consider lessons to be learned around how policies might work in practice, lawmakers chose to ignore the warning signs.  The tax law passed just over a month later with minimal attention paid to any of the insights to be gleaned from the leak.  It should not be surprising that the law continues to encourage multinational corporations to engage in offshore tax schemes.

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Shell Companies Allow Robocallers to Make Billions of Illegal Phone Calls

By Adam Felsenthal

Back in June, the Federal Trade Commission (FTC) formally filed a complaint alleging that TelWeb, a telemarketing system, used multiple shell companies to bypass laws against telemarketing robocalls. TelWeb has been the target of other lawsuits by the FTC.  The investigation alleges that the system was used to conduct billions of illegal phone calls by telemarketers through an enterprise of shell companies.

The fact that this same system has been the target of so many separate investigations is evidence of a larger problem — companies can be formed in the United States without disclosing their beneficial ownership information (the people who truly own them), allowing criminals to quickly rebrand and jump right back into doing the same illegal activities under a fresh new corporate name. TelWeb was able to use multiple shell companies throughout its scamming system, and the men in charge of connecting TelWeb to telemarketers have a history of being named in previous FTC lawsuits.  Yet they were able to continue in the industry under different names.

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The Downside of Boston’s Luxury Building Boom

By Chuck Collins

Boston is being transformed by a luxury housing boom. A decade from now, the city’s skyline and population demographics will be fundamentally altered by decisions being made today.

This boom has clear benefits, providing jobs in the building trades and increasing property tax revenue for the city. And the city has negotiated for affordable housing set-aside or linkage funds from some projects. But the boom is not doing enough to address Boston’s acute affordable housing crisis and will accelerate economic inequality in the city.

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FACT Sheet: Treasury’s CDD Rule: One Piece to a Larger Puzzle

Drug traffickers, corrupt officials, rogue nations seeking to evade sanctions, terrorists, and other criminals use anonymous companies to hide the money they steal and maintain the power they hold.

Many of the most dangerous criminal elements now operate sophisticated financial networks.  They have updated the way they do “business,” which Includes the use of companies with hidden owners.   As the rest of the world cracks down on corporate secrecy, the criminals and other wrongdoers are looking increasingly to the U.S.

The U.S. Treasury Department’s Customer Due Diligence (CDD) Rule for Financial Institutions1 is a critical piece in a larger strategy to protect the integrity of our financial system from abuse and the nation from a broad array of harms.

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