Skip directly to content

End Anonymous Companies

Most businesses have nothing to hide, but if you do have something to hide, it's easy: You just set up an anonymous shell company -- which in America, requires less personal information than it takes to get a library card.

Since they're anonymous, shell companies are a favorite tool to hide all sorts of unsavory behaviors, from human trafficking and drug cartels to tax dodging and even terrorism.

Anonymous shell companies used to harm Americans 

There are many reasons why we should ban the practice of anonymous shell companies -- companies formed with no way of knowing who is in charge.

But here's are some of the most compelling:

  • Anonymous shell companies are being used to shield illegal opioid dealers. A Fair Share Education Fund report from August of 2016 showed the ways in which our current opioid crisis is linked to the ease of created anonymous shell companies.
     
  • Anonymous companies are involved in human trafficking. A Moldovan gang used anonymous companies from Kansas, Missouri and Ohio to trick victims from overseas in a $6 million human trafficking scheme.
     
  • The practice of anonymous shell companies leaves the rest of us with a huge bill. Anonymous shell companies are used to hide money from taxation, and although the exact cost to American taxpayers is difficult to estimate it is believed to be billions of dollars each year. Anonymous shell companies are also a common tool to defraud the department of defense, medicare and consumers.

Ending the practice of shell companies is an important part of our overall work to make sure that everyone pays a fair share and plays by the same rules in terms of the tax code. It is an essential part of the “offshore” phenomenon of hiding money in tax havens.

As the New York Times recently wrote: “The privacy [offshoring] allows, either through shell companies or anonymous bank accounts, is as useful to regular businesspeople as to fraudsters or kleptocrats. Any effort to crack down on, say, mobsters who stash their money in New York real estate also inconveniences corporations seeking to minimize their taxes, and thus triggers concerted opposition.”

We have a chance to end anonymous companies

Momentum is building to end the practice of anonymous companies. The Clearing House Association—representing the world’s largest commercial banks—sent a letter to Congressional lawmakers supporting strong measures to crack down on the abuse of anonymous companies. 

Legislation has been filed in both the House and Senate and has bipartisan support in both chambers. H.R.4450, S.2489.

Fair Share is currently working with our allies across the country to advance this common-sense reform which will help law enforcement go after criminals, save the public money, and make sure that everyone plays by the same rules.