Mobsters and fraudsters hiding assets seem to favor Formations House in London, an Organized Crime and Corruption Reporting Project webpage revealed. The webpage is called “#29LEAKS: Inside A London Company Mill.” Its first paragraph describes some of the customers thought to use Formations House:

What do a Swedish Hells Angels boss, an Iranian state oil company, the Italian mob, and a fake Gambian bank have in common? The answer: A company services firm called Formations House, hidden behind the doors of one of London’s most exclusive addresses.

Formations House is a Nominee Incorporation Service (“NIS”).  This means it sells shell companies and other business entities to its customers. Another NIS was the Mossack Fonseca law firm known across the globe because of the Panama Papers.  While the business community has a legitimate need for NIS & shell companies, mobsters & fraudsters can buy shell companies from a NIS. The mobsters & fraudsters use the shell companies for hiding assets. They open bank accounts titled in the name of the shell companies and launder money through the accounts. Or they use their shell companies to purchase real estate, fine art, diamonds, etc. This misuse of shell companies is so rampant, it reminds me of the catchphrase “nothing to see here move along.”

To remain anonymous, the mobsters & fraudsters can use false identities when they purchase a shell company from a NIS.  For greater anonymity, the mobsters or fraudsters sometimes buy the services of a nominee/a straw man who acts as the director, manager or shareholder of a shell company.  Then the straw man, (rather than the mobster or fraudster), is listed at government registries as the shell company’s director, manger or shareholder.  When mobsters or fraudsters use a straw man this way, it makes it even more difficult to detect the mobster’s or fraudster’s shell companies and bank accounts. “Of course there are laws that are suppose to prevent this,” the video below about Formations House basically explains.

Video: Organized Crime and Corruption Reporting Project

Copyright 2019 Fred L. Abrams