In Nicholas Shaxson’s book, Treasure Islands, he traces out a network of offshore locations, like Cayman Islands, where corporations and crooks hide their cash. But he also noted that the incorporation laws in various US states allows those same corporations and crooks to hide money right inside the United States.
Reuters has a superb article showing how one house in Wyoming serves just such a function. It focuses on a house at 2710 Thomes Avenue, Cheyenne, Wyoming that serves as the headquarters for 2,000 different corporations, some of them shell corporations, some of the shelf corporations waiting for someone to buy them. Among the corporations shacking up together at 2710 Thomes?
Among those registered at the little house in Cheyenne are two small companies formed through Wyoming Corporate Services that sold knock-off truck parts to the U.S. Department of Defense, according to a Reuters review of two federal contracting databases and findings from an investigation by the Pentagon’s Defense Logistics Agency. The owner of those firms, Atilla Kan, awaits sentencing on a 2007 conviction for wire fraud in a related matter.
Also linked to 2710 Thomes is former Ukrainian Prime Minister Pavlo Lazarenko, who was once ranked the eighth-most corrupt official in the world by watchdog group Transparency International. He is now serving an eight-year jail term in California for a 2004 conviction on money-laundering and extortion charges. According to court records, that scheme used shell companies and offshore bank accounts to hide stolen Ukrainian government funds.
Court records submitted in Lazarenko’s criminal case and documents from a separate civil lawsuit, as well as interviews with lawyers familiar with the matter, indicate Lazarenko controls a shelf company incorporated in Cheyenne that owns an estimated $72 million in real estate in Ukraine through other companies.
Another man linked to 2710 Thomes is Ira N. Rubin. Prosecutors allege he created a Rube Goldberg-style network of shell and shelf corporations to further his scams.
In December 2006, the Federal Trade Commission sued Rubin for fraud in federal court in Tampa. Documents in the civil lawsuit allege Rubin used at least 18 different front companies to obscure his role as a credit-card processor for telemarketing scams.
These operations, the FTC alleged, offered subprime credit cards that charged an upfront fee debited from customers’ bank accounts, but the cards were never delivered.
True, this may not amount to more evil than Dick Cheney. But it shows how critical these secrecy jurisdictions are to making corporations a vehicle of crime and other abuse. And, as Shaxson has shown, secrecy jurisdictions are also a key tool for corporations to avoid paying their fair share and for dictators to loot their countries. These kinds of incorporation services are a key tool to sucking the money out of the legitimate economy.
At a time when SCOTUS is giving corporations–even flimsy entities like the scraps of paper at 2710 Thomes–more rights than actual citizens, it pays to understand how easy it is for people to avail themselves of corporate personhood.