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Interesting report from Reuters:

A Reuters investigation has found the house at 2710 Thomes Avenue serves as a little Cayman Island on the Great Plains. It is the headquarters for Wyoming Corporate Services, a business-incorporation specialist that establishes firms which can be used as "shell" companies, paper entities able to hide assets.

More than 2000 corporations are registered at that address in Cheyenne, a "1,700-square-foot brick house with a manicured lawn."


The whole report is worth reading.  

Most of it shouldn't really come as a shock, but the use of "shelf companies" was news to me:

Among its offerings is a variety of shell known as a "shelf" company, which comes with years of regulatory filings behind it, lending a greater feeling of solidity.

I hadn't heard of this, but it makes sense.  In a world full of fly-by-night operations, the appearance of permanence is a hot commodity.  

It's really not unlike the creation of "sleeper" accounts to troll sites like this, or Wikipedia: anyone can create an account, but the real value is in having an account that already has a solid track-record in the community.  The use of existing companies to conceal new scams is at least as old as the "bust-out joint", but it's surprising to see it done in a way that is systematic, brazen and apparently legal.

-----

Wyoming Corporate Services' website is here: http://wyomingcompany.com/ , and has not yet been scrubbed.  Then again, why would they scrub it?  

Here's the pitch:

Roughly a million corporations are formed each year and the number is growing every year. Why? Because a corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy. A person you control... yet cannot be held accountable for its actions.

-- http://www.wyomingcompany.com/...

Gee, that does sound like a good deal.  Let's all incorporate!

On "aged shelf" companies:

These are companies that we formed and put on the shelf.  They come with Certificates Of Good Standing from the state, Certified Articles of Incorporation from the state, the corporate kit which includes 20 pre-printed stock certificates, corporate seal, suggested meetings minutes and one year of Registered Agent Services.  All state fees are paid through the renewal date of the company.  If you need other services see our other services here.

These companies can be registered in any other state as a foreign company doing business in that state, if you need an aged company in your home state.

-- http://www.wyomingcompany.com/...

They have "native" corporations for sale in 36 other states as well.

Originally posted to shenderson on Tue Jun 28, 2011 at 02:06 PM PDT.

Also republished by Community Spotlight.

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Comment Preferences

  •  Isn't Dick Cheney allegedly from Wyoming? (10+ / 0-)

    Meh, I'm sure it's just a coincidence . . ..

  •  Yes, maybe we should incorporate (11+ / 0-)

    Free Speech, Inc.--we get to do whatever we want, get subsidies, pay no taxes, and bear no responsibilities.  Best of all, no going to jail!

    •  You can't beat 'em so join 'em (15+ / 0-)

      That's exactly what you should do.  If you form your own small corporation, you really can do all those things.

      The big barriers are the extra paperwork.  You would have to file for S-Corp status so you don't get double taxed, and you'd have to hold your annual meeting and adopt the minutes.

      What I'd really like to see is some progressive state adopt some kind of "Personal Corporation" schema, so individuals can gain the benefits that the big guys have, with fewer barriers to entry (lower fees, single taxation, relaxed reporting requirements, etc.).

      One of the other advantages corporations have that you could then have, would be the ability to constantly fail upward.  You could go bankrupt, but since it's just a corporate entity, you can simply start another one.

      •  There are other, subtle but HUGE advantages to WYO (13+ / 0-)

        I had a case that involved LLCs formed in Nevada and Wyoming - IIRC * the laws concerning listing the actual owners and their percentage ownership does not need to be listed in the filings.  That may not be the key advantage, but there are huge advantages to filing in Wyoming, no taxes, hard to get real info, etc.

        "How can the United States be the Greatest Nation ever if it is the only modern nation where citizens hold bake sales to pay for life saving medical care?" Single payer is coming but how many people will die before it becomes the only solution?

        by 4CasandChlo on Tue Jun 28, 2011 at 02:42:11 PM PDT

        [ Parent ]

      •  Absolutely... (3+ / 0-)
        Recommended by:
        Bluefin, kurious, marina

        I have increasingly been advocating for this very thing to anyone who will listen. If you really want to bring down corporate control of humankind, the best approach may be to not beat them, but join them.

        Think about it - if literally every person were to incorporate (or even better, cooperatives of large groups of people were to incorporate), we would be able to at the very least hobble the power of the big corporations. Once the powers that be realized that there was no fundamental advantage to empowering the concept of "the corporation" because nearly everyone was participating in such empowerment on some level, how fast do you think they would scrap the entire concept?

        If every individual were utilizing corporate tax dodges and other legal loopholes, the very institutions that enable the corporate system (government, financial, legal) would come crashing down so fast it would make your head swim. Then we would have no choice as a society but to eliminate or at least massively overhaul the concept of corporate power.

        •  Great idea: We are all Corporations!! Maybe... (1+ / 0-)
          Recommended by:
          marina

          ...we all need to complete the paperwork, pay the fees, & create our very own shelf company in Wyoming.  As Wyoming Corporate Services so aptly put it:  

          "Imagine the possibilities"...

          Oh yes, I can imagine the possibilities!!

        •  They'd create tiers of Corporateness (2+ / 0-)
          Recommended by:
          shenderson, marina

          To some degree they already have.  And the peons' corporations would be peon corporations.

          It's not the form that matters, it's the substance.

          "Tu vida es ahora" ~graffiti in Madrid's Puerta del Sol, May, 2011.

          by ActivistGuy on Wed Jun 29, 2011 at 02:26:27 PM PDT

          [ Parent ]

  •  Small businesses, baby (6+ / 0-)

    just waiting for the right tax policies and government pork to take off and hire employees.  

  •  Read this earlier today (6+ / 0-)

    It really is bizarre. And I never quite got why Wyoming has become the hot spot for this stuff. I guess taking over from Delaware?

  •  eh. (2+ / 0-)
    Recommended by:
    shenderson, libnewsie

    Heck, Delaware probably has dozens of companies like this.  Every state requires companies formed under its laws to have addresses in-state, hence businesses that do nothing but serve as that address.  

  •  This is a great investigative piece (5+ / 0-)

    I've already shared it on Facebook and hope others will, too.

    Can't wait to read the rest of the series.

  •  In Maryland: (10+ / 0-)

    Form an LLC, contribute up the the legal campaign limit.
    Form an LLC, contribute up the the legal campaign limit.
    Form an LLC, contribute up the the legal campaign limit.
    Form an LLC, contribute up the the legal campaign limit.
    Form an LLC, contribute up the the legal campaign limit.
    Form an LLC, contribute up the the legal campaign limit.
    Form an LLC, contribute up the the legal campaign limit.

    Form an LLC, contribute up the the legal campaign limit.

    Form an LLC, contribute up the the legal campaign limit.

    Form an LLC, contribute up the the legal campaign limit.

    ... so if you are a real estate owner with an LLC for each building or project, just write those checks.

    Thump! Bang. Whack-boing. It's dub!

    by dadadata on Wed Jun 29, 2011 at 03:47:17 AM PDT

  •  offshore havens & democracy (6+ / 0-)

    I recently read a great review of two books on offshore havens and what they mean for democracy by a Cambridge University professor, David Runciman.  The books reviewed are:

    Treasure Islands: Tax Havens and the Men who Stole the World by Nicholas Shaxson (Bodley Head, 329 pp, £14.99, January 2011, ISBN 978 1 84792 110 9)

    Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class by Jacob Hacker and Paul Pierson (Simon and Schuster, 368 pp, £11.50, March 2011, ISBN 978 0 00 000097 2)

    Runciman explains that the first book, although mainly about offshore tax havens, doesn't limit the term "offshore" to its technical meaning, "a simple description of the particular jurisdictions that enable people to eliminate their tax bills. He applies it to people as well as places, and to a way of life along with a state of mind. Seen like this, it turns out to be a very useful word."  It's a very long article, and well worth the read.  Here are some key excerpts:

    ....The essence of offshore is the need to keep up a solid appearance of respectability, while allowing money in and out with as little fuss as possible. Tax avoidance (unlike tax evasion) is not a clandestine activity, and tax havens don’t exist just to enable people to squirrel their money away from the authorities. The money needs to be accessible, and it needs to be liquid..... Shaxson’s book explains how and why London became the centre of what he calls a ‘spider’s web’ of offshore activities (and in the process such a comfortable home for the likes of Saif Gaddafi). It is because offshore is the offshoot of an empire in decline. It perfectly suited a country with the appearance of grandeur and traditionally high standards, but underneath it all a reek of desperation and the pressing need for more cash.

    [...]

    ...when in 1963 President Kennedy tried to stem currency outflows by taxing the interest on foreign securities, in an effort to reduce the incentive to export dollars to more lucrative overseas markets, it had the opposite effect, and produced what Shaxson calls ‘a stampede for the unregulated London offshore market, free of tax and regulations’. US policy-makers were now in a dilemma. They could try to face down the threat of offshore, either with higher domestic interest rates, or with tighter controls on currency outflows and a tougher regulatory regime requiring US banks to share information about their overseas activities. Or they could copy London by creating an offshore world of their own closer to home: in other words, if you can’t beat them, join them. The second was the path of least resistance – among other things it was a useful way of reinforcing the dollar’s position as the global reserve currency – and over time it was the one they took. Slowly in the later 1960s and 1970s, and then much more rapidly in the 1980s and 1990s, America deregulated its financial controls and allowed money to move in and out with fewer if any questions asked, in the hope that more of it would stick to the sides.

    Once this process began, it also unleashed a new wave of competition between individual American states to offer the most hospitable, least intrusive regulatory environment for outside companies to work in. Leading the way was little Delaware, which had always tried to compensate for its lack of size by being open for any business. Since the 1980s more and more corporations have moved to Delaware to take advantage of the state’s extreme laissez-faire attitude to the rights of shareholders and employees against company managements. If you took your business to Delaware (and this was often just a question of establishing a shell office and filling in some forms), it would be much harder for anyone to prove anything against you, because the Delaware courts did not think that much of what you did was any of their concern. Again, other states faced a choice: they could try to isolate Delaware by tightening up their own standards or they could try to compete for a share of the spoils. Enough of them decided to compete to start a race to the bottom. Offshore had moved onshore.

    [....]

    [But what] about Washington, where the shift to an offshore mindset at the national level might be expected to run up against some serious political opposition? What happened to the representatives of all those people who don’t have lots of money to move around, who can’t relocate even if they wanted to, and who have an interest in a fair, open and broadly progressive tax system? Didn’t they notice what was going on?

    This is the question that Jacob Hacker and Paul Pierson tackle in Winner-Take-All Politics. They don’t spend much time talking about offshore, but the story they tell has striking parallels with the one laid out by Shaxson. One of the ways you can identify an offshore environment, according to Shaxson, is that local politics gets captured by financial services. In that sense, Washington has gone offshore: its politics has been captured by the interests of a narrow group of very wealthy individuals, many of whom work in finance. For Hacker and Pierson this, more than anything else, explains why the rich have got so much richer over the last 30 years or so. And by the rich they don’t mean simply the generally wealthy; they mean the super-rich. The real beneficiaries of the explosion in income for top earners since the 1970s has been not the top 1 per cent but the top 0.1 per cent of the general population. Since 1974, the share of national income of the top 0.1 per cent of Americans has grown from 2.7 to 12.3 per cent of the total, a truly mind-boggling level of redistribution from the have-nots to the haves. Who are these people? As Hacker and Pierson note, they are ‘not, for the most part, superstars and celebrities in the arts, entertainment and sports. Nor are they rentiers, living off their accumulated wealth, as was true in the early part of the last century. A substantial majority are company executives and managers, and a growing share of these are financial company executives and managers.’

    Hacker and Pierson believe that politics is responsible for this. It happened because law-makers and public officials allowed it to happen, not because international markets, or globalisation, or differentials in education or life-chances made it inevitable. It was a choice, driven by the pressure of lobbyists and other organisations to create an environment much more hospitable to the needs of the very rich. It was even so a particular kind of politics and a particular kind of choice. It wasn’t a conspiracy, because it happened in the open. But nor was it an explicit political movement, characterised by rallies, speeches and electoral triumphs. It relied in large part on what Hacker and Pierson call a process of drift: ‘systematic, prolonged failures of government to respond to the shifting realities of a dynamic economy’. More often than not the politicians were persuaded to do nothing, to let up on enforcement, to look the other way, as money moved around the globe and up to the very top of the financial chain. This chimes with what Shaxson says about the way the offshore system was allowed to develop over the last four decades. Here too there was no real conspiracy, because there was no real need. Instead, it happened because ‘nobody was paying attention.’

    One of Hacker and Pierson’s complaints about the way we usually regard politics is that we miss what’s really going on by focusing on the show of elections and the competition between parties. This is the theatre of electoral politics, to set alongside the theatre of probity. Too often, they say, we reduce politics to the level of sport: ‘This is no doubt why politics as electoral spectacle is so appealing to the media: it’s exciting and it’s simple. Aficionados can memorise the stats of their favourite players or become experts on the great games of the past. Everyone, however, can enjoy the gripping spectacle of two highly motivated teams slugging it out.’

    [...]

    Elections are seductive, and these days the build-up is so protracted that they can drown out the real business of politics: the way organised groups use pressure – money, lobbying, threats – to squeeze whichever politicians happen to be in power, in order to influence the shaping of policy. Elections also suggest false historical turning points. It is easy to assume that if the rich have been winning in recent decades, the process must have started with the election of the pro-big business, anti-big government Ronald Reagan in 1980 (and concomitantly, Margaret Thatcher in Britain in 1979). But Hacker and Pierson argue that the real turning point came in 1978, during the presidency of Jimmy Carter. This was the year the lobbyists and other organised groups who were pushing hard to relax the burden of tax and regulation on wealthy individuals and corporate interests discovered that no one was pushing back all that hard. Despite Democratic control of the White House and both Houses of Congress, 1978 saw the defeat of attempts to introduce progressive tax reform and to improve the legal position of trade unions. Instead, legislation was passed that reduced the tax burden on corporations and increased the burden on their employees (through a hike in the payroll tax, a regressive measure). All this happened because the politicians followed the path of least resistance – as elected politicians invariably do – and the better organised and better-funded resistance came from the representatives of big business, not organised labour.

    [....]

    So where did the resistance go? This is the real puzzle, and Hacker and Pierson take it seriously because they take democracy seriously, despite its unhealthy fixation on elections. Democracies are meant to favour the interests of the many over those of the few. As Hacker and Pierson put it, ‘Democracy may not be good at a lot of things. But one thing it is supposed to be good at is responding to problems that affect broad majorities.’ Did the majority not actually mind that they were losing out for the sake of the super-rich elite? In the American case, one common view is that the voters allowed it to happen because they minded more about other things: religion, culture, abortion, guns etc. The assumption is that many ordinary Americans have signed a kind of Faustian pact with the Republican Party, in which the rich get the money and the poor get support for the cultural values they care about. Hacker and Pierson reject this view, and not just because they don’t think the process they describe depends on there being a Republican in the White House: they see strong evidence that the American public do still want a fairer tax system and do still see it as the job of politicians to protect their interests against the interests of high finance. The problem is that the public simply don’t know what the politicians are up to. They are not properly informed about how the rules have been steadily changed to their disadvantage. ‘Americans are no less egalitarian when it comes to their vision of an ideal world,’ Hacker and Pierson write. ‘But they are much less accurate when it comes to their vision of the real world.’

    [...]

    One of the drivers of the offshore world is what [Shaxson] calls the ‘tides of looted or tainted oil money [that] sluice into the offshore system, distorting the global economy in the process’. One radical solution is to get a country’s mineral windfalls out of the hands of a few super-wealthy individuals and into the hands of ordinary citizens, by redistributing the money directly to every inhabitant. This may sound unrealistic but such schemes have been implemented in a few places, including Alaska. However, Shaxson doesn’t see fit to tell us the name of the politician who spread the wealth there: it was Sarah Palin.

    Link: Didn't They Notice? David Runciman
    (London Review of Books)

  •  Meh (2+ / 0-)
    Recommended by:
    decembersue, shenderson

    It's really not all that beautiful.

    Wait, what?

  •  I was just in Wyoming (4+ / 0-)

    about two weeks ago. Beautiful place. But it strikes me that the whole place is a shell state - barely any people, disproportionate political power that is manipulated by external moneyed interests.

  •  Creepy. (1+ / 0-)
    Recommended by:
    shenderson

    Makes me think of a pamphlet I once saw on "How to assume a new identity." The booklet had advice on how to get yourself a new name and SSN: "Look for the birth certificate of a child, born around the time you were, who died in another county." Yeah, any reason why somebody on the up-and-up would WANT a new identity? Same question applies here, very much.

    It's here they got the range/ and the machinery for change/ and it's here they got the spiritual thirst. --Leonard Cohen

    by karmsy on Wed Jun 29, 2011 at 08:03:01 AM PDT

  •  Key paragraph: (5+ / 0-)
    Recommended by:
    shenderson, googie, DorothyT, Bluefin, DRo
    "A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy," the company's website boasts. "A person you control... yet cannot be held accountable for its actions. Imagine the possibilities!"

    Thanks SCOTUS!!  Citizens United at work.  

    I support public employee's unions.

    by Tracker on Wed Jun 29, 2011 at 08:14:54 AM PDT

  •  Mind boggling! (3+ / 0-)
    Recommended by:
    shenderson, Bluefin, DRo

    And makes me wonder: against this kind of insane evil we have only Bernie Sanders, bless his heart, as a voice of reason. Itnwould seem that the "Dark Ages" are coming again.

  •  If I incorporate.. (1+ / 0-)
    Recommended by:
    shenderson

    Do I get to vote twice?

    Or just not pay my taxes.

    An imbalance between rich and poor is the oldest and most fatal ailment of all republics - Plutarch

    by Anthony Page aka SecondComing on Wed Jun 29, 2011 at 10:50:43 AM PDT

  •  Dun & Bradstreet (2+ / 0-)
    Recommended by:
    mmacdDE, shenderson

    I suspect that the "aged shelf" thing may not work as well in real life as in marketing hype. Most banks or other business entities want to see things like your back tax returns, not just that the name was incorporated umpteen years ago.

    And unlike the Cayman Islands, having your headquarters in Wyoming doesn't qualify you for offshore tax breaks and relief from the banks disclosing your millions to the IRS.

  •  I think I'll have to look into this. (1+ / 0-)
    Recommended by:
    shenderson

    Bwahahahahahaaa!

    Each time a person stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope... --RFK

    by expatjourno on Wed Jun 29, 2011 at 01:26:40 PM PDT

  •  I didn't run that woman over! (1+ / 0-)
    Recommended by:
    shenderson

    It was my corporation. Arrest that intangible entity!

  •  "a corp. is a legal person...that can be used as a (2+ / 0-)
    Recommended by:
    shenderson, Garrett
    ...fall guy...or a decoy. A person you control... yet cannot be held accountable for its actions....

    Imagine the possibilities!"

    Yes, indeed, let's just "imagine the possibilities"--apparently the crooks already have:  

    Among the entities registered at 2710 Thomes, Reuters found, is a shelf company sheltering real-estate assets controlled by a jailed former prime minister of Ukraine...

    another "business owner" using the Thomes address was:  

    indicted...for allegedly helping online-poker operators evade a U.S. ban on Internet gambling....

    ...Etc...  Apparently this is all legal, because, as far as US regulations involved in business incorporation is concerned,

    "Somalia has slightly higher standards than Wyoming and Nevada."

    Not only are crooks and liars successfully finding new ways to cheat and defraud--but certain state governments have laws that permit them to do so, and the state of Wyoming isn't doing much to prevent that happening.  The Deputy SoS apparently believes it's sufficient to claim that the state only wants to attract legitimate businesses, but also doesn't seem to have a problem with admitting that they don't have any sort of regulation in place to prevent the "illegitimate" ones from operating there.  

    So, Wyoming doesn't actively recruit crooks--they just provide safe haven for crooks if they happen to do business there, and if they get a good profit for doing so, apparently that makes it all okay?  Guess it's just how business is done these days...

  •  Wow! (1+ / 0-)
    Recommended by:
    shenderson

    I'll bet the owner of that house in Wyoming makes a lot of money aging corporations on a shelf, making up boilerplate minutes, and filing paperwork.  

    Of course, the owner of the house is also a corporation. But somewhere there's somebody who owns that corporation, and you just know they're getting every benefit imaginable from it.

    It's just the same old trickle-down, on-your-own, special-interests-first, country-club, voodoo economics.

    by JayC on Wed Jun 29, 2011 at 02:57:39 PM PDT

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