GUY RAZ, host: 2710 Thomes Avenue, that's an address in the city of Cheyenne, Wyoming, and more than 2,000 companies are based there. But it's not a skyscraper or even an office complex. It is a small, red brick house, about 1,700 square feet.
The home is the headquarters for Wyoming Corporate Services, and it's a business that creates firms that are used as shell companies, or companies that exist only on paper.
Now, Wyoming Corporate Services helps its clients set up bank accounts and appoint directors and even CEOs, and that allows those paper corporations to avoid liability. But some of those companies are actually engaged in fraud.
Brian Grow is a special correspondent for Reuters and he spent two months investigating Wyoming Corporate Services alongside reporter Kelly Carr. And he joins me now from WABE in Atlanta. Brian, welcome to the program.
BRIAN GROW: Thanks, Guy.
RAZ: How did you first come across Wyoming Corporate Services?
GROW: So my partner Kelly Carr was just curious about something called a shelf corporation, which is a variant of a shell company. You might think of it as a shell company on steroids, because what it is, is it's a company formed by an incorporation service, then left on the shelf to season for a few years, add in some tax payments to the IRS, a little credit history, and what you have is a company that can come right off the shelf and bid on contracts, get bank loans. So it's very appealing to the people...
RAZ: And it looks like it's been established for years or it has board of directors, and it's actually just an address in Wyoming.
GROW: Exactly. And so, she got curious about shelf corporations, and in particular this firm Wyoming Corporate Services that has more than 700 of them listed on its website. She found a couple hundred companies located at the little house in Wyoming, and Google Earth showed us that it was a 1,700-square-foot ranch-style property...
GROW: ...that look like something that would have a lemonade stand outside and kids running in the front yard. And so, my partner Kelly Carr went out to the house and it has a little sign on the wooden door that says business hours. And because it said business hours, we thought, well, we can just walk in, it's a business. And we did.
Lo and behold, the corporate suites for the companies that are registered at that address are, in fact, cubbyhole mailboxes, floor to ceiling in the main room.
RAZ: So it's a mailboxes, et cetera.
GROW: It's a mailboxes, et cetera.
(SOUNDBITE OF LAUGHTER)
GROW: While, of course, many of the companies there are legitimate, several of them are involved in allegedly holding real estate assets back in the Ukraine for a jailed former prime minister of Ukraine who went to prison for money laundering and extortion.
RAZ: You also found a man named Atilla Kan. He was accused of selling counterfeit trucks to the Pentagon. He has a shell company there. Ira Rubin, who's suspected of running a telemarketing scam. And you think of the Cayman Islands as a place where this happens. It's actually happening in the United States.
GROW: The easy availability of anonymous corporate entities in the United States was the key surprise factor, Guy, for us in our research. You know, we thought, isn't it amazing how the U.S. is regularly preaching to the rest of the world about the importance of transactional transparency in talking about tax havens and secrecy havens? In fact, there's a bill that was co-sponsored by President Obama called Stop Offshore Tax Havens, I believe. And it specifically designates, like, 31 secrecy havens around the world that the federal law wanted to crack down on, but if you just go to Wyoming or Nevada or Delaware, you can get much of the same secrecy that you can get overseas. And in fact, people from overseas are coming to the United States to incorporate their shell companies.
So in a money laundering assessment by 16 government agencies, including the FBI and the DEA, the FBI estimated that East Europeans launder $36 billion a year through U.S. shell companies.
RAZ: That's incredible. Thirty-six billion dollars is laundered in the U.S. You would think they would go to Russia or to Somalia or somewhere else where, you know, where you don't have an investigative apparatus.
GROW: You would think. But it seems like the idea is you can get just as much secrecy in a place like Wyoming or Nevada as you can get in the Caymans or in Switzerland.
RAZ: We have to almost assume that there are probably more criminal elements or networks of criminal elements that are operating either in Wyoming or in one of these other three states.
GROW: So our research suggests that there is a lot more digging to be done about the thriving mini industry of incorporation secrecy in the United States.
RAZ: That's Brian Grow. He's a special correspondent for Reuters. Brian, thank you so much.
GROW: Thank you, Guy.
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