Panama Papers Firm Linked to over 1,000 US Companies
TEHRAN (Tasnim) – The law firm at the hub of a global financial scandal has links to more than 1,000 US companies, formed mostly in Nevada and Wyoming since 2001, but appears to have largely escaped the scrutiny of US financial regulators — at least in public.
The leak this week of more than 11 million records from the Panamanian firm, Mossack Fonseca, has led to a global uproar that prompted Iceland’s prime minister to step aside. An international consortium of journalists has reported the documents tie the firm, which specializes in shell companies that can be used to conceal assets, to Russian oligarchs, former heads of state and world soccer’s scandal-plagued governing body.
Yet despite those apparent dealings and its operations in the United States, the firm has appeared in only a scattering of court cases and regulatory filings. Most involve government attempts to track money the authorities believed had been concealed behind overseas shell companies the firm helped establish.
The US Justice Department is “reviewing the reports” published by international journalists, the head of its Criminal Division, Leslie Caldwell said, but declined to elaborate, the USA Today reported on Wednesday.
The firestorm around Mossack Fonseca has been tied mostly to its work for foreign customers. But state incorporation records show the firm helped set up nearly 1,100 business entities in the United States since 2001.
The majority of US-based companies linked to Mossack Fonseca were formed in Nevada by M.F. Corporate Services (Nevada) Limited, a one-employee company based out of a low-slung tile-roofed office building 20 miles from the Las Vegas strip. MF Nevada has served as the registered agent for 1,026 business entities since 2001, according to USA TODAY's review of Nevada business documents.
Publicly available information about many of the Nevada corporations is limited to the fact that MF Nevada is the registered agent and a listing of the officers. Many of the officers are businesses themselves — meaning no individuals are listed in corporate records — and typically have addresses in Anguilla, the Seychelles, Panama or another foreign country.
Nearly all of those companies were incorporated in Nevada and Wyoming, two states with permissive corporate secrecy laws.
“If your goal is secrecy and not having prying eyes find out even the most basic things about what you’re doing and what your company is and who owns it, Wyoming and Nevada are incredibly attractive places from that secrecy perspective,” said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy.
“These companies are using mechanisms that are precisely designed to avoid prosecution, to avoid discovery,” he said. “Shell corporations are very effective for conduits for avoiding the law, for whatever purpose.”
Wyoming records show a Mossack Fonseca-linked business registration operation was formed in the state in 2001, where it also has served as registered agent.
While many states' laws allow corporations to operate under a veil of secrecy, forming shell companies has become a cottage industry in Wyoming, Delaware and Nevada, said Heather Lowe, legal counsel and director of government affairs for Global Financial Integrity, a research group based in Washington.
“There is no information that they’re asking for that tells them who owns, controls, (or) works for…the company,” she said. “It’s like a big black box they’ve created.”
While Mossack Fonseca-linked business entities have operated on US soil for more than a decade, there are few records of any federal enforcement actions against them. The firm surfaced most recently in a securities fraud case in Manhattan.
