Marco Rubio: Time to Crack Down on Shell Companies Engaged in Sex Trafficking, Funding Terrorism

U.S. Sen. Marco Rubio, R-Fla., is leading the charge on Capitol Hill to “prevent individuals from using anonymous shell corporations to engage in illicit activities like money laundering, sex trafficking, fraud, and terrorist financing.”

Rubio, U.S. Sen. Ron Wyden, D-Oreg., and U.S. Sen. Sheldon Whitehouse, D-RI, brought back the “Corporate Transparency Act” on Wednesday and the Florida Republican’s office stressed what it does.

“The bill would require certain corporations and limited liability companies (LLCs) to disclose their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) at formation by providing basic biographical information like name, date of birth, address and driver’s license or passport number,” Rubio’s office noted. “Companies will be required to file a list of current beneficial owners annually and report changes in ownership. Individuals who knowingly fail to provide beneficial ownership information or willfully provide false information would be subject to civil and criminal penalties.

“Many businesses are already required to disclose beneficial ownership information and will be exempt from the reporting requirements under this bill, including publicly traded companies, 501(c) organizations, and small businesses operating in the United States with 20 employees and over $5 million in gross receipts,” Rubio’s office added.

Rubio offered his take why on why the bill was needed.

“Law enforcement in my home state of Florida, including in Miami, know all too well that criminals readily use shell companies to remain anonymous and hide nefarious activity,” Rubio said. “I am proud to reintroduce this bipartisan bill that targets criminals hiding behind shell companies to engage in illicit activities like human trafficking, healthcare fraud, transnational corruption, and terrorist financing. It is imperative that law enforcement has the basic information, tools, and authorities at its disposal to identify and disrupt criminal acts that put our communities and our national security at risk.”

“Anonymous shell companies have facilitated rampant criminality, including real estate deals being used to launder illicit funds,” Wyden said. “Our bill would provide a straightforward solution by ending the anonymity and registering the owners of these companies on day one. Ending anonymous shell companies would make it easier for law enforcement to ‘follow the money’ when investigating complex financial crimes.”

“The United States has become a haven for shell corporations, allowing everyone from domestic criminals to foreign strongmen to obscure their ill-gotten gains in our financial system,” Whitehouse said. “It’s common sense that law enforcement needs the ability to identify the actual owner of any American corporation, and that America should not be a financial haven for the world’s worst people.”

The bill was sent to the U.S. Senate Banking, Housing, and Urban Affairs Committee on Wednesday. The companion bill was introduced by U.S. Rep. Carolyn Maloney, D-NY, and has the support of U.S. Rep. Peter King. R-NY.

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