(Refiles to fix typo in lead)
* Wyoming targets shell companies in new bills
* Move follows Reuters report on Cheyenne house of secrets
* Wyoming bill would outlaw "nominee" company directors
By Brian Grow
ATLANTA, Aug 9 Wyoming state legislators will
consider three new bills next week aimed at reining in "shell"
companies formed under the state's liberal incorporation laws,
according to Wyoming Secretary of State Max Maxfield.
The move follows a Reuters investigation in June that
showed how Wyoming, Nevada and Delaware have become popular
business-secrecy destinations at a time when Washington is
demanding other countries improve financial and corporate
Reuters found that one 1,700-square-foot house in Cheyenne
is home to more than 2,000 firms, including hundreds of shell
companies -- paper-only firms with few assets. Some of those
firms have been used to shield real estate for a jailed former
prime minister of Ukraine, sell fake parts to the Pentagon and
process payments for illegal online gambling.
Maxfield told the Wyoming Tribune-Eagle newspaper on Aug. 8
that the bills would strengthen his office's ability to issue
cease-and-desist orders against firms that file false documents
with the state, close a fee-related loophole and ban "nominee"
officers and directors. (bit.ly/nGScI7) Wyoming is one
of only a handful of states which do not already prohibit
nominees -- individuals who stand in for the real owners of
companies to hide their identities.
The Reuters investigation found Gerald L. Pitts, the owner
of the house in Cheyenne which is the headquarters of mass
incorporator Wyoming Corporate Services, is the director,
president or principal of 41 firms, according to Wyoming state
incorporation data maintained by Maxfield's office.
Secretary Maxfield said twice in outlining the legislation
to the Wyoming Tribune-Eagle that the Reuters report was not
what forced his hand. "Since 2007, when I took office, this has
been a top priority for us," Maxfield was quoted as saying.
"We've been working toward this for several years, which is
well before that report came out."
In a June 30 interview with the Wyoming Tribune-Eagle
immediately after the Reuters investigation was published
Maxfield said that the state's laws were doing a good job of
preventing fraudulent companies from setting up in the state.
On Aug. 2, Senator Carl Levin, the Democratic chairman of
the U.S. Senate Homeland Security Committee's Permanent
Subcommittee for Investigations, reintroduced a bill called the
Incorporation Transparency and Law Enforcement Assistance Act.
The bill would require states to collect data on the real, or
"beneficial", owners of corporations, with some exceptions.
Senator Levin, who cited Reuters' investigation in a
statement read on the Senate floor, has introduced the bill
every year since 2008 in response to law enforcement agencies'
concerns about the easy availability of shell companies with
anonymous owners in states such as Wyoming.
"Today, it takes more information to obtain a driver's
license or open a U.S. bank account than it does to form a U.S.
corporation," said Levin. "Our states don't require anyone to
name the owners of the corporations being formed under their
laws, practically inviting people to misuse" them.
The bill has so far never made it out of the Homeland
Security Committee, beaten back by a coalition of state
regulators and business groups, including the National
Association of Secretaries of State, who argue it would be a
costly and burdensome federal mandate.
(To read the Reuters special report in multimedia PDF
format, click here: link.reuters.com/caf42s)
(Reporting by Brian Grow; editing by Claudia Parsons)