2 ms·

So this bill is the beneficial ownership paper for the US? Am I the only one who think this requirement is as stupid as it gets. If you are a money launderer ar

by csomar 6y ago

So this bill is the beneficial ownership paper for the US? Am I the only one who think this requirement is as stupid as it gets. If you are a money launderer are you going to make an accurate disclosure? How does the US/Authorities check the validity of these disclosures? As someone who went through the BO pain, I think it only added more paperwork load to small business/guys like me.

JumpCrisscross 6y ago
These laws have precedence, and the precedence shows benefits [1][2]. It would have also mitigated historical harms [3]. Note that American compliance is de-centralised. A $5+ million entity attracts a different level of scrutiny from banks, corporate registers and brokers than a no-revenue entity with an overseas signatory. [1] https://knowledgehub.transparency.org/assets/uploads/helpdesk/Beneficial-ownership-registers_2020_PR.pdf https://knowledgehub.transparency.org/assets/uploads/helpdes... [2] https://open.cmi.no/cmi-xmlui/bitstream/handle/11250/2475354/Beneficial%20openness%3F%20Weighing%20the%20costs%20and%20benefits%20of%20financial%20transparency?sequence=1&isAllowed=y https://open.cmi.no/cmi-xmlui/bitstream/handle/11250/2475354... [3] https://www.jstor.org/stable/90012622 https://www.jstor.org/stable/90012622
- csomar 6y ago
  My question might be stupid since you seem to be more versed in this subject. But if I incorporate in the US, how does the government/relevant bodies know that I am who I say I am in the BO?
  - someguydave 6y ago
    I believe it is a criminal act under this law to lie about it (there are other laws that make it illeagal to lie on government forms), so you would be committing a paperwork process crime which USG loves to enforce. Signing the false form would literally be mailing evidence of a crime to FinCen.
    - mtnGoat 6y ago
      But if you are already a criminal... Would that matter?
      - deleted 6y ago
        [deleted]
      - jjk166 6y ago
        Al Capone committed a lot of crimes besides tax evasion, but he went to prison for the crime he could be convicted of. The more offenses someone commits, the more likely they'll make a mistake committing one of them and get caught. Yeah most money launderers will have no moral qualms about lying on a form, but someone already on the fence might be dissuaded if the risk of getting convicted increases.
        mtnGoat 6y ago
        True, lots of kingpins go down for off center charges.
      - paulryanrogers 6y ago
        My guess is that many people don't consider themselves all out criminals, just 'regular' folks skirting the edges of legality. So doing something undeniably illegal and on the record may discourage taking an action. Or even if consciously criminal then one would want to minimize risk of getting discovered.
        mtnGoat 6y ago
        My point was related to those already practicing money laundering. They already know it's illegal, what's one more criminal act? Once you are invested, it's not a problem.
        paulryanrogers 6y ago
        It still seems to raise their risk profile as the shells are more likely to get discovered unless they meet these new thresholds.
  - theptip 6y ago
    The same way any company performs anti-fraud checks. And how this is done - check the provided information against a known-good database (there are plenty of services that you can pay for here). Perform random spot checks. Make sure that the UBO is filing taxes for this entity’s earnings. Etc. I’m not claiming it’s perfect; fraud detection is a hard problem, and it’s also pretty obscure if you haven’t had to deal with it at your own company.
pas 6y ago
> If you are a money launderer are you going to make an accurate disclosure? How does the US/Authorities check the validity of these disclosures? Someone has to file the paperwork. If you willingly misfile it, then you are an accomplice. The various offices that manage these papers also try to do minimal checks. Also if the filer is a professional agent/attorney they have strict requirements to keep various details about their clients. (Which are protected by attorney-client privilege, but if there's sufficient evidence then a judge can issue a warrant, so the investigation can try to follow the trail. So either the attorney was duped or it was complicit.)
mtnGoat 6y ago
Exactly, just find another Patsy too put down as the beneficial owner and use them as a proxy. Cartels and people with money/power, don't ask you to do this for them, they tell you. This bill lacks teeth in so many ways. Requesting honesty from criminals is silly. Expecting the banking industry that has lobbied for this secrecy to play along, is also silly. This is already happening and had been for years. Source; I know people who laundered money for years in the Caribbean. One of the Patsy's is paying a lot of tax debt for the shell that was in his name.
- mrkstu 6y ago
  But making that 'patsy' the legal owner also increases the actual owner's risk profile. The Patsy has greater control and can redirect the money and is the legal 'owner' of the assets. That forces the non-legal owner to use someone they trust implicitly and someone closer to them generally, making them easier to tie back in a legal case.
- jjeaff 6y ago
  This law isn't just for money launderers, it's for people hiding assets. For example, there are many criminals and despots that steal huge sums of money and then form shell companies in the US and buy real estate or other assets. If the beneficial owner is falsified, then if that property comes under investigation, they stand to lose it. There are currently multiple $50m+ homes in places like BelAir or Beverly Hills that are owned by anonymous shell companies and they sit vacant year round. Some, after much investigation were found to be owned by foreign politicians. I suspect a large percentage of these properties are also from ill gotten gains.
  - nullc 6y ago
    > they stand to lose it. If the source of the funds was unlawful, they'd lose it anyways.
    - jounker 6y ago
      And as a guess, under the new law, if they have a fake owner, then the government can take the property because a documented crime has been committed, as opposed to hitting a brick wall when it encounters the shell company.
wombatpm 6y ago
Government wants the information for tax purposes. If I sell a multi million dollar condo in Chicago, taxes have to be paid. If I sell an LLC that owns the same condo, no taxes are paid.

by csomar 6y ago

JumpCrisscross 6y ago

These laws have precedence, and the precedence shows benefits [1][2]. It would have also mitigated historical harms [3]. Note that American compliance is de-centralised. A $5+ million entity attracts a different level of scrutiny from banks, corporate registers and brokers than a no-revenue entity with an overseas signatory. [1] https://knowledgehub.transparency.org/assets/uploads/helpdesk/Beneficial-ownership-registers_2020_PR.pdf https://knowledgehub.transparency.org/assets/uploads/helpdes... [2] https://open.cmi.no/cmi-xmlui/bitstream/handle/11250/2475354/Beneficial%20openness%3F%20Weighing%20the%20costs%20and%20benefits%20of%20financial%20transparency?sequence=1&isAllowed=y https://open.cmi.no/cmi-xmlui/bitstream/handle/11250/2475354... [3] https://www.jstor.org/stable/90012622 https://www.jstor.org/stable/90012622

csomar 6y ago
My question might be stupid since you seem to be more versed in this subject. But if I incorporate in the US, how does the government/relevant bodies know that I am who I say I am in the BO?
- someguydave 6y ago
  I believe it is a criminal act under this law to lie about it (there are other laws that make it illeagal to lie on government forms), so you would be committing a paperwork process crime which USG loves to enforce. Signing the false form would literally be mailing evidence of a crime to FinCen.
  - mtnGoat 6y ago
    But if you are already a criminal... Would that matter?
    - deleted 6y ago
      [deleted]
    - jjk166 6y ago
      Al Capone committed a lot of crimes besides tax evasion, but he went to prison for the crime he could be convicted of. The more offenses someone commits, the more likely they'll make a mistake committing one of them and get caught. Yeah most money launderers will have no moral qualms about lying on a form, but someone already on the fence might be dissuaded if the risk of getting convicted increases.
      - mtnGoat 6y ago
        True, lots of kingpins go down for off center charges.
    - paulryanrogers 6y ago
      My guess is that many people don't consider themselves all out criminals, just 'regular' folks skirting the edges of legality. So doing something undeniably illegal and on the record may discourage taking an action. Or even if consciously criminal then one would want to minimize risk of getting discovered.
      - mtnGoat 6y ago
        My point was related to those already practicing money laundering. They already know it's illegal, what's one more criminal act? Once you are invested, it's not a problem.
        paulryanrogers 6y ago
        It still seems to raise their risk profile as the shells are more likely to get discovered unless they meet these new thresholds.
- theptip 6y ago
  The same way any company performs anti-fraud checks. And how this is done - check the provided information against a known-good database (there are plenty of services that you can pay for here). Perform random spot checks. Make sure that the UBO is filing taxes for this entity’s earnings. Etc. I’m not claiming it’s perfect; fraud detection is a hard problem, and it’s also pretty obscure if you haven’t had to deal with it at your own company.

pas 6y ago

> If you are a money launderer are you going to make an accurate disclosure? How does the US/Authorities check the validity of these disclosures? Someone has to file the paperwork. If you willingly misfile it, then you are an accomplice. The various offices that manage these papers also try to do minimal checks. Also if the filer is a professional agent/attorney they have strict requirements to keep various details about their clients. (Which are protected by attorney-client privilege, but if there's sufficient evidence then a judge can issue a warrant, so the investigation can try to follow the trail. So either the attorney was duped or it was complicit.)

mtnGoat 6y ago

Exactly, just find another Patsy too put down as the beneficial owner and use them as a proxy. Cartels and people with money/power, don't ask you to do this for them, they tell you. This bill lacks teeth in so many ways. Requesting honesty from criminals is silly. Expecting the banking industry that has lobbied for this secrecy to play along, is also silly. This is already happening and had been for years. Source; I know people who laundered money for years in the Caribbean. One of the Patsy's is paying a lot of tax debt for the shell that was in his name.

mrkstu 6y ago
But making that 'patsy' the legal owner also increases the actual owner's risk profile. The Patsy has greater control and can redirect the money and is the legal 'owner' of the assets. That forces the non-legal owner to use someone they trust implicitly and someone closer to them generally, making them easier to tie back in a legal case.
jjeaff 6y ago
This law isn't just for money launderers, it's for people hiding assets. For example, there are many criminals and despots that steal huge sums of money and then form shell companies in the US and buy real estate or other assets. If the beneficial owner is falsified, then if that property comes under investigation, they stand to lose it. There are currently multiple $50m+ homes in places like BelAir or Beverly Hills that are owned by anonymous shell companies and they sit vacant year round. Some, after much investigation were found to be owned by foreign politicians. I suspect a large percentage of these properties are also from ill gotten gains.
- nullc 6y ago
  > they stand to lose it. If the source of the funds was unlawful, they'd lose it anyways.
  - jounker 6y ago
    And as a guess, under the new law, if they have a fake owner, then the government can take the property because a documented crime has been committed, as opposed to hitting a brick wall when it encounters the shell company.

wombatpm 6y ago

Government wants the information for tax purposes. If I sell a multi million dollar condo in Chicago, taxes have to be paid. If I sell an LLC that owns the same condo, no taxes are paid.