I've heard of this in the context of shortcutting regulatory stuff - if you want a banking license, find a small bank in some backwater and "merge" with them, i

I've heard of this in the context of shortcutting regulatory stuff - if you want a banking license, find a small bank in some backwater and "merge" with them, if you want to list on a stock exchange, find a small, cheap listed company and do the same. You obviously need to maintain the regulatory compliance framework, but in many cases, this is cheaper and simpler than getting a license or listing on an exchange from scratch. Anyway, it surprises me that someone who cares enough to be suspicious of a newly formed LLC doesn't care enough to check that a given LLC is an empty shell that changed ownership very recently. If anything, you'd think that to be more suspicious, wouldn't you?