Wyoming Secretary Of State Audits Cheyenne Office Of ‘Panama Papers’ Firm
The Secretary of State's Office on Monday morning audited the Cheyenne office of the registered agent at the center of the so-called "Panama Papers" that has caused scandals worldwide.
The initial stories about the Panama Papers -- 11 million leaked files in 2.6 terabytes of documents -- were published Sunday by the International Consortium of Investigative Journalists about the Panamanian law firm Mossack Fonseca that has set up shell corporations to hide billions of dollars in assets of world leaders, their associates and the super-rich.
Wednesday, Secretary of State Ed Murray issued a news release saying his office learned of the Mossack Fonseca on Monday morning, and its relationship to Wyoming.
Secretary of State officials went to the firm's office of M.F. Corporate Services Wyoming LLC, at 1620 Central Ave., and completed a review of the companies for which it serves as a registered agent.
Of the more than 214,448 entities listed in the Panama Papers, 24 limited liability companies were registered in Wyoming, according to Murray's news release.
However, M.F. Corporate Services Wyoming LLC, failed to maintain the required information for performing as as registered agent under Wyoming law.
The Secretary of State's officials then demanded the required information, and M.F. Corporate Services complied. They also notified law enforcement, and the investigation continues. The news release did not indicate what that investigation entails.
Shell corporations -- companies that have few if any assets but manage money -- usually have a legitimate purpose especially when people are trying to start a business, Murray said in the news release.
He also said Wyoming, Delaware and Nevada have been working since 2009 to fight fraud that might occur with shell companies.
Wyoming civic and business leaders have long touted the state's business-friendly climate because it has no income tax, a mandatory five-day turnaround on business filings, it was the first state to adopt Limited Liability Company laws, low filing fees, and "the strength of Wyoming's shield of liability laws," Murray wrote.
But in 2005 and 2006, the U.S. Department of Justice named Wyoming as an easy mark for those intent on committing fraud, such as the creations of shell companies that are corporations in name only and have no presence other than a mailbox. In order for companies to have legal papers served upon them, known as service of process, they need registered agents to pass along that information. Wyoming allowed entities to be formed by people who don't live in the United States and it allowed registration of those entities with minimal information, which can become fronts for money laundering operations.
With that federal pressure, Wyoming began enacting laws to curb potential violations.
Now, Murray said he's concerned the scandal of the Panama Papers will lead to renewed calls for transparency and revealing of beneficial ownership information nationwide.
That would change the purpose and mission of the Secretary of State's Office, he said. "We are not naive as to the importance of the release of these 'Panama Papers,' but we will not compromise the privacy of our customers."