Ken Silverstein, one of the great long-standing US investigative reporters, has aimed his razor skills and obsessive memory upon the offshore anonymous corporation game, and especially the law firm Mossack Fonseca & Co., of Panama. A tour de force of reporting, fully worth reading, at this link.
who makes these fictitious entities possible? To conduct business, shell companies like Drex need a registered agent, sometimes an attorney, who files the required incorporation papers and whose office usually serves as the shell’s address. This process creates a layer between the shell and its owner, especially if the dummy company is filed in a secrecy haven where ownership information is guarded behind an impenetrable wall of laws and regulations. In Makhlouf’s case—and, I discovered, in the case of various other crooked businessmen and international gangsters—the organization that helped incorporate his shell company and shield it from international scrutiny was a law firm called Mossack Fonseca…
Since the 70s the law firm has expanded operations and now works with affiliated offices in 44 countries, including the Bahamas, Cyprus, Hong Kong, Switzerland, Brazil, Jersey, Luxembourg, the British Virgin Islands, and—perhaps most troubling—the US, specifically the states of Wyoming, Florida, and Nevada.
Mossack Fonseca, of course, is not alone in setting up shell companies used by the world’s crooks and tax evaders. Across the globe, there are vast numbers of competing firms, and many of them register shells that are every bit as shady as Drex. Proof of this includes the case of Viktor Bout, who, in the 1990s, peddled arms to the Taliban through a Delaware-registered shell. More recently, in 2010, a man named Khalid Ouazzani pleaded guilty to using a Kansas City, Missouri, firm called Truman Used Auto Parts to move money for Al Qaeda.
Scattered news accounts and international investigations have pointed to Mossack Fonseca as one of the widest-reaching creators of shell companies in the world, but it has, until now, used an array of legal and accounting tricks that have allowed it and its clients to mostly fly under the radar.
(The company disputes this claim and asserted in an email that “there is no court or government record that has ever identified Mossack Fonseca as the creator of ‘shell’ companies. Anything tying our group to ‘criminal activity’ is unfounded, inasmuch as we have not actually been notified of the existence of any legal proceeding… thus far.”)
That just gives a hint, please go read it, it’s the sort of education that you need if you want to know how power and money really work in this world.