For Hudson Institute's Kleptocracy Initiative, I wrote (and podcasted) on how U.S.-based shell companies hamper Washington's anti-money laundering push:
However, shell company formation in the U.S. doesn’t simply allow some of the world’s foremost foreign kleptocrats to store their ill-gotten gains abroad. Nor does it solely allow the kleptocrats to mask such wealth from investigators both domestic and international. Rather, the American shell company industry – and the states like Delaware, Wyoming, and Nevada that gorge on the revenues of anonymous company formation, despite Washington’s prior commitments – has, through its interactions with the American finance industry, made it that much more difficult to pursue the types of anti-money laundering (AML) regulations Washington has set forth.
That is to say, America’s shell company formation industry isn’t simply countermanding Washington’s anti-kleptocracy efforts elsewhere. It’s also gumming the gears of the U.S. finance industry’s efforts to search out customers who would otherwise raise any number of red flags along the way, adding to a litany of other issues already at play.