An economic watchdog group is calling for state and federal governments halt the practice of allowing “shell companies” to be created by anonymous owners.
“Lax U.S. laws enable criminals and hucksters to hide behind American companies to rip us all off,” said Stefanie Ostfeld, Global Witness Deputy Head of U.S. Office and Financial Accountability and Corporate Transparency Coalition Steering Committee member. “Anonymous companies serve as a legal smokescreen for a myriad of criminal activity from drug dealing and forced labor to credit card scams and money laundering.”
For example, The Great Ripoff describes a scam where one criminal and his associates set up phantom AIDS clinics and submitted false claims for $55 million in HIV and cancer treatments. The criminals hid their activities behind shell companies registered in Louisiana, Florida, Georgia, South Carolina and North Carolina. Despite the fact that neither the clinics nor the treatments existed, the criminals, led by Michel de Jesus Huarte, collected $14.6 million from insurance companies.
Huarte pleaded guilty to fraud in 2010 and was sentenced to 22 years in prison.
Americans need to wake up to the problem of anonymous U.S. companies and demand that Congress and secretaries of state end the practice, said Heather Lowe, Global Financial Integrity director of government affairs.