Cheyenne is the capital and largest city of the state of Wyoming. Although I can’t tell you much else about the city, earlier today we learned quite a bit more courtesy of a Reuters investigation:
At a single address in this sleepy city of 60,000 people, more than 2,000 companies are registered. The building, 2710 Thomes Avenue, isn’t a shimmering skyscraper filled with A-list corporations. It’s a 1,700-square-foot brick house with a manicured lawn, a few blocks from the State Capitol.
The address serves as the headquarters for Wyoming Corporate Services, that, according to the article, “establishes firms which can be used as ‘shell’ companies, paper entities able to hide assets.” The owner of one company at the address may sound familiar to my gambling readers: Ira Rubin.
Ira Rubin was one of eleven individuals recently indicted in connection with the Department of Justice seizure of offshore online gambling sites. According to the indictment, Rubin processed payments for offshore online gambling companies by disguising the payments as payments to phony internet merchants. A New York judge denied bail for Rubin on June 8.
Today’s Reuters article exposing the implications of shell and shelf companies cannot be ignored. No one can deny some individuals are using these paper entities in order to hide transactions for purposes of evading taxes or laundering money, among other things. At the same time, however, these types of entities can serve legitimate purposes. Let’s not get carried away by demanding an immediate shutdown of Wyoming Corporate Services. It seems that the people behind WCS are intelligent and are taking complete advantage of the soft corporate governance laws in the state of Wyoming. We just don’t know at this time whether or not WCS knows or should know of the illicit activities engaged by companies registered at the address.
To me, the immediate takeaway here is that we have just another one of many indications that it’s not all too difficult to move around money for illicit purposes. I certainly applaud the seemingly significant increase in enforcement efforts to crack down on such behavior. But that’s not where the problem can most likely be addressed. It has to occur in state legislatures with a tightening of laws governing these entities. Unfortunately, the rule of politics says we won’t see any significant changes on that front anytime soon.