CLAMPING DOWN
Bills seek to expose shell firms
Congress is taking action against shell companies doing mysterious — sometimes nefarious — dealings such as the Malaysian sovereign wealth fund 1MBD, which ensnared Goldman Sachs and its Asian chief, Tim Leissner, in a scandal.
The bipartisan bills introduced last week in both the House and Senate would require the Treasury Department to receive detailed information on the principals behind these shell companies.
Goldman has been under the spotlight for more than 18 months for its business dealings with 1MBD due to allegations that billions of dollars were misappropriated — causing an uproar that resulted in Leissner’s exit.
Earlier this year, Singapore banned Leissner from working in the securities industry in the citystate for 10 years.
“Shell companies were used to facilitate the theft and the laundering of funds, allegedly from the sovereign wealth fund,” said a law enforcement person familiar with the latest development, though this source was not specifically referring to Leissner.
“One individual was using those shell companies to hide assets and purchase real estate, and to open up bank accounts to move money, using escrow accounts that lawyers controlled to avoid any money laundering checks,” the person said.
It’s time for the US to take action, politicians said.
“We’re the only advanced country in the world that doesn’t already require disclosure of beneficial own- ership information, and my Corporate Transparency Act will change that,” said US Rep. Carolyn Maloney (D-NY), who introduced the House bill with lead co-sponsor, Rep. Peter King (R-NY).
“Criminals are taking advantage of state laws by establishing firms — often without a physical presence or business activity — to access our banking system,” King added.
Law enforcement officials describe a scene today that makes the Wild West seem mild by comparison.
“From multimillion-dollar health care fraud to terrorist financing, anonymously owned companies act as getaway cars for all sorts of criminals,” said Stefanie Ostfeld, deputy head of the US office of international watchdog Global Witness. “Swift passage of this legislation will make it harder to move, enjoy and hide dirty money, and demon- strate that Congress is serious about making sure the US is not exploited by criminals and the corrupt who are a risk to national security.”
“The DOJ complaints allege that the siphoning off of 1MDB bond proceeds occurred after the bond offerings had closed, and there are no allegations that Goldman Sachs knew of or was involved in that illegal activity,” a Goldman Sachs spokesperson said regarding Singapore.