
How easy it is to set up untraceable companies - JumpCrisscross
http://www.economist.com/node/21563286
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perbu
NPRs Planet Money has an excellent series on this now.
[http://www.npr.org/blogs/money/2012/07/27/157499893/episode-...](http://www.npr.org/blogs/money/2012/07/27/157499893/episode-390-we-
set-up-an-offshore-company-in-a-tax-haven) and
[http://www.npr.org/blogs/money/2012/09/18/161358307/episode-...](http://www.npr.org/blogs/money/2012/09/18/161358307/episode-403-what-
can-we-do-with-our-shell-companies)

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hippich
Forming corporation is just very first step. Corporation needed because you
need to open bank account for it to do money transfers for whatever reasons
you have. And here where you will get stuck. In USA you need physical presence
and ID on you to open bank account for your corporation. For offshore banking
it even worse - most banks will ask for a reference. And even if they will not
ask for reference, they still do whole KYC thing on you.

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JumpCrisscross
When I moved from college to New York I managed to lose all my identification
save for a foreign passport over a decade expired with a 2-year old picture of
me in it. It took a bit of sweet talking, but I was able to open bank accounts
(and fly domestically) with that alone. Note, too, that thanks to silly
drinking laws in the U.S. there is a thriving industry in creating fake
identity cards.

~~~
tzs
> Note, too, that thanks to silly drinking laws in the U.S. there is a
> thriving industry in creating fake identity cards

Does this not happen much outside the US? In the US, the drinking age is 21.
In most of the rest of the world it is 18, with a few scattered others (Japan
20, Iceland 20, 18-25 or illegal in India depending on region). From this, I'd
expect demand for fake IDs for buying booze to be higher than average in the
US because of the 19-21 year old market, but I'd expect the under 18 market to
support fake IDs everywhere.

Even in the US, the impression I've gotten is that the under 18 market is
where the majority of the fake ID for booze market lies, as that covers high
school. Once you are out of high school and in college or in the full time
work force, you can readily get booze regardless of age. In college, there
will be 21 year olds among the juniors and seniors who can bring in the
drinks, and in the work force there will be co-workers 21 and over to do that
favor for you.

On the other hand, much of the rest of the world has been more accepting of
technology to make IDs harder to fake. Could the US have a bigger fake ID
market simply because it is easier to fake an ID here?

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krenoten
>> Could the US have a bigger fake ID market simply because it is easier to
fake an ID here?

It probably has more to do with the increasingly harsh cleavage that exists
between the underage seeking novelty and the overage acting in ways they view
as being protective. The stigma associated with it makes both more fun and
more connected with risky behavior.

I don't really see the point of going through the trouble of procuring illegal
falsified documentation just to drink in the central European countries I'm
familiar with. "Sure, let the 15 year old have a beer, what's the harm?" is
the reaction you may encounter in several places outside the US.

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derleth
> "Sure, let the 15 year old have a beer, what's the harm?" is the reaction
> you may encounter in several places outside the US.

And, in fact, in multiple places inside the US, at least in private
gatherings.

(Not to beat on this too hard, but in many ways the whole of the US is more
akin to the whole of Europe than any single European country. Lots of
cultures, lots of demographics, lots of regional variation.)

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davidw
Going overboard in the other direction is pretty bad too. Setting up a company
in Italy is a nightmare.

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willrobinson
Can't wait to read this study.

The simple and unpleasant truth, as past research has shown, is that so much
business, irrespective of its legality, is conducted using shells, so much
wealth moves through them and into tax havens, it is unthinkable to shut the
system down; doing so would probably hurt our economies more than help them.
No one dares to mess with this beast. At least not in my lifetime.

And guess who needs untraceable shell companies? Patent trolls.

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jpdoctor
> _And guess who needs untraceable shell companies? Patent trolls._

Why is that?

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willrobinson
1\. Limit liability. Each threatened action is made by a separate LLC created
just for that purpose. The troll's company is not put at risk every time they
want to threaten someone with litigation. The LLC does the dirty work.

2\. Make it difficult for the target to assert any sort of leverage. If they
do not know who is behind the shell, they do not know what resources the troll
may have. If the troll is a practicing entity, they won't know if they have
any claims they could assert against the troll. All they see is a recently
formed LLC that has certain patent rights, and nothing else.

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spindritf
> Limit liability.

IANAL but I don't think a company needs to be "untraceable" to limit liability
of its owners.

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willrobinson
3\. Control bad PR. Warrantless threats of litigation are attributed to the
shell not the troll. As far as the press can see the troll is not involved.

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aes256
There is nothing to say these individuals/organizations would have followed up
on their promises to set up these shell companies.

They could have been stings, or even scams.

In the case of the American provider who acknowledged the purpose of the shell
company might have been a front for funding terrorism, they could have just
requested an upfront payment (e.g. 6 months at $5,000 per month), taken the
money and ran.

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fsckin
Would you steal from a terrorist?

~~~
jbelich
That worked wonders for Doc Brown....

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smoyer
I've actually been thinking about how to set up a shell corporation for a
completely different reason. If the U.S. (where I currently live) fails, how
do I operate a legitimate business? If I'm still living here, I should pay
taxes here but if I choose to relocate, why should my entire financial
infrastructure have to change?

On the other hand, if the economy fails it could very well take me with it ...
I guess if I have to start over it doesn't matter where those accounts _were_.

~~~
coob
> If the U.S. (where I currently live) fails, how do I operate a legitimate
> business?

I think if the US failed as a nation you'd have a lot more to worry about.

