Jul 04 2011

Wyoming – Cayman Islands of the American prairie

Posted by: Nick Shaxson in: Thoughts

There is a great little piece by RealEconTV (“Business news without the bullshit) pointing to a Reuters TV investigation and an accompanying (excellent) Reuters story.

Reuters finds a single-family house at 2710 Thomes Avenue, Cheyenne, Wyoming (pictured) being home to more than 2,000 corporations, some of which played a key role in frauds. Treasure Islands.

The report looks at dodgy practices such as the sale of so-called ‘shelf corporations’ – which are companies that have been created and existed for years sitting on their shelf, and have a pre-packaged credit and tax history for years.

You can then buy off the shelf and create the (false) impression that you have an established business.

They just slot in your names, and you walk away with the company. Presto!” says Daniel E. Karson, executive managing director at investigative firm Kroll Inc. “The purpose is to conceal ownership.”

It can be used for money laundering, terrorism, or whatever. You can do it anonymously – nominee officers can be provided – the company sells

‘a fall guy,
. .
a servant,
. . .

a decoy,
. . .
a good friend
. . .

A person you control… yet cannot be held accountable for its actions. Imagine the possibilities. Imagine the possibilities.!

Watch the clip of the camera crew visiting the house, looking at those plastic folders(the corporations’ famed ‘mailboxes’ and then being confronted with the inevitable sweet smile from a woman (“neighbors say they see little activity there besides regular mail deliveries and a woman who steps outside for smoke breaks.”)

The woman delivers the obligatory

“I’m going to have to ask you to leave”

but not before she admits – incredibly – that there are some businesses in there that are engaging in illegitimate activities.

This is about as sleazy as it gets: you can get iron-clad secrecy for a few hundred dollars, no questions asked. Shells from this very house in the picture were used by an imprisoned former Ukrainian Prime Minister to hide more than $70m in real estate, among many others. Those are just the ones we know about. As Reuters notes:

“Convicted felons can operate firms which create companies, and buy them with no background checks. 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.”

This puts Barack Obama’s complaints about Ugland House in the Cayman Islands – home to over 18,000 companies at the last count (“either the biggest building or the biggest tax scam on record”) – into some useful context. Though it still pales into insignificance to that grubby little building I visited in Wilmington, Delaware – 1209 Orange Street – housing over 200,000 corporations, including some of the world’s biggest. (Read all about that in Treasure Islands, of course.)

It’s a superb in-depth Reuters report, well worth reading to the end. And for more details, read this (slightly old) U.S. Senate Investigation into the whole sordid business (easy-download version here).

Time for Jon Stewart to make a similar visit . . .

3 comments so far

[…] follows an article in the same series about murky goings-on in a house in Cheyenne, Wyoming, which I blogged […]

Helen Steely 8th August, 2011 1.28 am

Am reading Poisoned Wells and just saw the Book TV presentation of “Treasure Islands:” hope you keep writing! and that you have some sort of protection!!!!!!!

Better than WikiLeaks!!!!

[…] follows some excellent recent digging by Reuters on the subject.Of course Wyoming lawyers don’t want to be seen to have been caught […]

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