“There could be no greater gift to the fentanyl traffickers, fraudsters, and U.S. adversaries that rely on the anonymity that shell companies provide than gutting the Corporate Transparency Act.” – FACT Deputy Director Erica Hanichak
The Corporate Transparency Act is under threat from opponents who say its reporting requirements are “too burdensome” for small businesses, and who downplay the risks posed by anonymous companies. The facts say otherwise.
Transparency International has issued on a factsheet on the importance of anti-corruption measures, including beneficial ownership disclosure, in formulating a response to the COVID-19 pandemic.
The Coalition Against Insurance Fraud sent a letter to Congress in support of the Corporate Transparency Act.
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.
Sometimes it feels like you have to be a superhero to build a successful small business. From performing multiple jobs to working long hours, it takes a lot of skill and strength to succeed.
One thing no small-business owner can do, however, is actually fight crime. As a result, Congress must protect small-business owners like me from fraud by requiring businesses to disclose the true identity of their owners.
