This came in from Offshore Alert today:
When it comes to offering shell companies for foreign nationals who use them to commit an array of serious financial crimes, one office address stands out by a country mile.
It may come as a surprise to some to learn that it's not in the Cayman Islands, the British Virgin Islands, the Turks and Caicos Islands or any of the other offshore financial centers that have been much-maligned by politicians in the world's major countries.
Ironically, this one is in the country that is front and center in the attacks on OFCs – the United States of America. Specifically, the address in question is Suite 606, 1220 North Market Street, Wilmington, Delaware – home of a business called American Incorporators Ltd.
On its web-site at www.ailcorp.com, American Incorporators boasts that it is "one of the largest incorporating service companies in the United States", claims that it is "dedicated to the highest business standards" and lauds its membership of the Better Business Bureau.
"Headquartered in corporate-friendly Wilmington, Delaware, American Incorporators has been providing entrepreneurs, business owners and their advisors worldwide with low cost incorporating services since 1991," it is stated on the site.
The caliber of many of these "entrepreneurs" and "business owners" is evident from numerous requests for international judicial assistance that have been made with the U. S. Department of Justice by the authorities of eastern European countries such as Russia, Ukraine, Poland, Czech Republic, Bulgaria, Latvia, Lithuania, Kazakhstan, Belarus, and Estonia as part of criminal investigations into fraud, tax evasion, bribery, corruption and even murder.
"Over the last decade, at least 40 such requests have been made about shell companies located at Suite 606, 1220 North Market Street," says David Marchant, publisher of OffshoreAlert, which monitors the filings each month and has an extensive database of them which can be searched at www.OffshoreAlert.com. "The number of times this address appears in requests for judicial assistance is remarkable. It comes up much more than any other address by a long, long way. It's not even close.
"Several of the requests concern organized crime. Two particularly notable investigations involved massive corruption by former Ukraine Prime Minister Pavlo Lazarenko and the assassination of the former head of Russia's Federal Bankruptcy Service, Georgy Konstantinovich Tal."
While campaigning to become President of the United States, Barack Obama described an address in the Cayman Islands as the "biggest building in the world or the biggest tax scam in the world", citing the number of shell corporations that existed there.
"Based on evidence accumulated by OffshoreAlert, however, that label is more fitting for this address in Delaware," says Marchant. "As offshore financial centers are to the USA, so Delaware is to eastern Europe."
A session on how Delaware is used by criminals to commit illegal activity will take place at The 8th Annual OffshoreAlert Financial Due Diligence Conference, in Association with Grant Thornton, at The Ritz-Carlton, South Beach in Florida on May 2-4, 2010.
The session, which will be presented by attorneys Jack Blum and Fred Abrams, will also take a look at two other crime-friendly U. S. jurisdictions – Wyoming and Nevada.
I did this gig a couple of years ago with Jack Blum. Good to see he’s there again. I was invited – but Miami’s a long way.
But the message is getting out – as TJN said in the Financial Secrecy Index – Delaware tops the bill.
Time for reform guys.
In fact, time for reform of limited liability, full stop.
The fact that it is the US who has to lead the way may actually help.