Rich people — especially ones that commit crimes — may no longer need to go to the Caribbean to park their cash and escape taxes. They can just go to Wyoming, where a lax approach toward newly incorporated businesses –“Somalia has higher standards,” as one expert told Reuters — has led to the creation of thousands of shell corporations.
The lack of rules have led to businesses like Wyoming Corporate Services, which is located in a small house near the state capitol in Cheyenne and has already created 2,000 shell companies. Clients can choose to list Gerald Pitts, director of Wyoming Corporate Services, as a director of their shell corporation, giving the owners the ability to mask their real name or address.
Of course, not all shell corporations are corrupt. But anonymity can allow those that are to break the law with impunity. Two of the corporations formed by Wyoming Corporate Services applied and received government contracts totaling over $715,000 after falsely claiming to be “women-owned,” “minority-owned,” and “Hispanic-owned.” If that wasn’t bad enough, they put American soldiers in danger by selling the Pentagon knock-off military vehicle components from Turkey.
Another shell corporation headquartered at the house is alleged to be owned by disgraced former Ukrainian prime minister Pavlo Lazarenko, who was named as the eighth-most corrupt official in the world by Transparency International in 2004. Lazarenko’s Wyoming company is allegedly the center of a vast international network of dummy corporations that controls $72 million worth of real estate in rural Ukraine. [Reuters Special Report]
Copyright 2011 The National Memo