Global Witness investigations and campaigns have shown how anonymously owned companies act as getaway cars for the criminal and corrupt all over the world. America is at the heart of this problem, and it is hurting American interests.
Owners of anonymous companies registered in the U.S. are ripping off innocent people and businesses across America. Drawing on 22 cases involving anonymous companies from 27 states, The Great Rip Off shows how fraudsters, mobsters, money-launderers, tax-evaders and corrupt politicians are able to use anonymously-owned American companies to cover their tracks and evade the authorities.
America is one of the easiest places in the world to set up an anonymously-owned company. In many states, you need less identification to set up a company than you do to get a library card.
"We looked at all sorts of crimes across the U.S. and found two things in common. They were all carried out by anonymous owners of American companies, and the authorities are spending lots of time and money trying to stop them" Charmian Gooch, Global Witness Director and TED Prize 2014 Winner
The report shows how weak U.S. laws enabled criminals to set up American companies with anonymous owners to rip us all off. For example
Stealing from the young, the old and the faithful
- An Ohio school district employee used a web of fake companies to abuse his position and bill for millions of dollars’ worth of services that school kids never received;
- Texas lawyers used sham companies from Delaware and Nevada to trick elderly people into investing their life savings in worthless enterprises;
- Con artists, nicknamed the “Three Hebrew Boys” tricked churchgoers and military personnel into investing millions in a South Carolina company that turned out to be a Ponzi scheme.
Enabling drug trafficking, modern slavery and sanctions-busting
- The biggest of Mexico’s drug cartels used an anonymous Oklahoma company in a scheme to launder millions of dollars of drug money into the United States;
- A Moldovan gang used anonymous companies from Kansas, Missouri and Ohio to trick victims from overseas in a $6 million dollar human trafficking scheme;
- The Iranian government used an anonymous New York company to conceal its ownership of a 5th Avenue skyscraper, in direct breach of sanctions.
Bilking investors, taxpayers and voters
- A Russian crime boss described by the FBI as the “most dangerous mobster in the world” allegedly set up a network of anonymous companies stretching from Eastern Pennsylvania to the United Kingdom to cheat the stock market and steal over $150 million from investors in the United States and overseas;
- Convicted fraudsters set up ghost companies in South Dakota to swindle aspiring American entrepreneurs out of their capital by offering high return investments in imaginary biofuel projects;
- A Louisiana Congressman used anonymous companies from Delaware and Louisiana to take almost half a million dollars in bribes.
To fix the problem, Global Witness is calling for public registries of the people who really control companies, so other businesses know who they are dealing with and law enforcement can stop many crimes at the source. Global Witness Co-founder and Director Charmian Gooch’s campaign on this subject was awarded this year’s TED Prize and she has just been named as one of Bloomberg Markets’ 50 Most Influential in 2014.