February 3, 2016

Whitehouse introduces bill to curb money laundering through shell corporations

Legislation would require disclosure of corporation owners Investigation aired on 60 Minutes this week exposed corruption enabled by lax disclosure rules

Washington, DC – U.S. Senator Sheldon Whitehouse (D-RI) today introduced the Incorporation Transparency and Law Enforcement Assistance Act (S. 2489), legislation to require states to keep track of the actual owners of the corporations and limited liability companies formed therein.  This information would be available to law enforcement agencies and could help to investigate and prosecute criminals who use anonymous shell corporations to hide assets.  Senator Dianne Feinstein (D-CA) cosponsored the measure.  Representatives Carolyn B. Maloney (D-NY) and Peter King (R-NY) introduced companion legislation today in the House of Representatives.

“Right now, the United States is a preferred destination for terrorists, drug traffickers, tax cheats, and other criminals who want to hide the gains from their illegal activity in anonymous business entities,” said Whitehouse, the Ranking Member of the Senate Judiciary Subcommittee on Crime & Terrorism.  “This simple change will help law enforcement have the tools to root out this dirty money.”

The introduction of the bill follows a groundbreaking investigation by non-governmental organization Global Witness exposing the common practice of using U.S.-based shell corporations to launder money linked to criminal enterprises.  The investigation, which aired this week on 60 Minutes, showed that lax disclosure laws in the United States are easily manipulated and exploited.  An investigation last year by the New York Times found that more than half of all properties in New York City priced over $5 million are purchased by shell corporations on behalf of unnamed foreign buyers.

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