Lawyers as Enablers in Money Laundering (3/29/18)

Amol Mehra, My law degree wasn’t meant for money laundering. But boy, it would make it easy (WAPO 3/29/18), here.

I didn’t pursue a law degree to learn how to launder money for human traffickers, opioid kingpins or corrupt public officials. But my legal training has helped me to understand just how easy it would be. 

Anonymous companies are ubiquitous in most money-laundering schemes, and in the allegations against Trump campaign associates Paul Manafort and Richard Gates. Shell companies are formed with no record of the true owners, and because they are so easy to set up — especially if you’re a lawyer — you can easily layer dozens of them to confuse investigators and hide dirty money. 

A Delaware-based LLC could own a Nevada-based C corporation, which could be owned by a Panamanian company, and on and on. That makes it nearly impossible for investigators to untangle these webs. In 2012, Cyrus Vance Jr., district attorney of New York County, said this about anonymous companies: “My office, time and time again, finds its criminal investigations thwarted by an absurd system of secrecy whereby criminals can hide their money.” 

* * * * 

Because anonymous shell companies are a factor in so many kinds of cases — hiding proceeds from the ongoing opioid crisis, funding terrorism, enabling corruption in the oil and gas industries — there is large and growing bipartisan support for a bill to collect ownership information on anonymous companies. Remarkably, it might pass. 

These reforms are backed by a broad coalition, made up of supporters including law enforcement agencies, progressive anti-poverty groups and large financial institutions. They advocate policies that would require companies to disclose their owners to the government. In turn, the government would share that information with law enforcement and institutions with anti-money-laundering requirements. 

Yet bizarrely, and regrettably, the American Bar Association opposes these reforms. Even more bizarre are the ABA’s arguments.

And so on.  Very thoughtful piece.

JAT Comment:  Of course, money laundering is a crime separate from tax evasion or related tax crimes, but the conduct which enables money laundering can also be deployed to enable tax crimes.