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Sunshine State Local Elections Shine Light on How Dark Shell Company Data Can Be

Posted  November 18, 2020

Amidst the ongoing saga of the US national elections, Florida local elections may not have made much of a ripple.  But one small scandal in the Sunshine State reveals a lot about the ongoing problem the US has with shell corporations and their hidden ownership structures.

The story is convoluted, as most shell company stories are.  A political donor, Proclivity, who had never donated money in Florida before, appeared suddenly in October 2020 to flood communities with mailers advertising third party candidates running as alternatives to two mainstream Democratic candidates in tough local races.  At least some evidence suggests the candidates themselves were not real politicians but were instead plants placed by Proclivity to be spoilers in the election.

Proclivity purports to be a public interest organization in Georgia, but no such non-profit is registered there.  Their only address is a PO Box.  The true identity of this entity remains a secret until a whistleblower comes forward to provide details, as it is unfortunately easy to create corporations in the US that hide ownership information.  Secrecy around ownership enables fraud and is a serious risk for money-laundering, corruption, or—as seen here—election shenanigans.  The website opencorporates.com reports 22 active companies with the word Proclivity in the title.  Proclivity 100 LLC, for example, was founded in June 2020 in New Jersey.  However, there is no way to know which company is the right one given how little information jurisdictions like New Jersey make public.

Proclivity made its donations through a political action committee called The Truth, which in turn hired a mailer company Advance Impression LLC.  Advance Impression and The Truth, lo and behold, both list the same office address.  The Truth’s listed agent has no record of previous political involvement, her listed phone number is shared by an escort service, and her listed address is a residential home.  Advance Impression appears to have never done another political mailer.  Whether these three operations, Proclivity, The Truth, and Advance Impression are related or not is, again, difficult to know without an insider coming forward due to the continuing secrecy jurisdiction rules in the US.

A number of recent legislative proposals would go a long way towards fixing the issue.  Perhaps most promising is a proposal to amend the Bank Secrecy Act to create a money-laundering whistleblower program modeled after the highly successful SEC program.  With a new administration coming to Washington in January, it’s possible such a program may now gain traction.

If you have information about fraud related to shell corporations, please contact us.

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Tagged in: Abusive Tax Shelters, Financial and Investment Fraud, Financial Institution Fraud, Importance of Whistleblowers, Money Laundering, Regulatory Violations,