Undercover in New York

Our hidden camera investigation reveals how suspect money can enter the U.S.

31 January 2016

This investigation was covered in the New York Times. Following our investigation, Congress has moved to end the abuse of secret companies.

We all know what it feels like to get ripped off or scammed. But we know less about the tools the criminals use to get away with their illicit activities.

Global Witness has previously looked at a whole range of crimes, and found they all had one thing in common. They were all carried out by anonymous company owners, who are able to skirt U.S. laws and launder money through our financial system. If these sham companies did not exist, those crimes would be far harder to commit.

Anonymous companies do great damage to society. Warlords and dictators use them to steal from their people and stash the loot in places like the U.S. A violent Mexican drug cartel called the Zetas used American companies to launder its profits.The Iranian government has used them to evade sanctions. Credit card scammers, mobsters, tax evaders and other criminals routinely use them to rip off innocent citizens or threaten U.S. interests and get away with it.

The crazy thing is, these companies are often set up in the U.S. - it is one of the easiest places in the world to do this legally.

To prove our point, we went undercover and approached 13 New York law firms. We deliberately posed as someone designed to raise red flags for money laundering.

We said we were advising an African minister who had accumulated millions of dollars, and we wanted to buy a Gulfstream Jet, a brownstone and a yacht. We said we needed to get the money into the U.S. without detection.

To be clear, the meetings with the lawyers were all preliminary. None of the law firms took our investigator on as a client, and no money was moved.

Nonetheless, the results were shocking; all but one of the the lawyers had suggestions on how to move the funds. To see what some of them said, watch the video below:

Only one of the lawyers refused to speak to us at all. This is what he said:

For the complete picture, see the full recordings of these meetings here.

The key findings from the investigation are:

  • Lawyers from 12 of the 13 firms we visited suggested using anonymous companies or trusts to hide the minister’s assets. All but one of these firms recommended using American companies.
  • One of the lawyers who provided suggestions on how to move the funds was James Silkenat, the President of the American Bar Association at the time.
  • Several lawyers suggested using their law firms’ own bank accounts to help prevent U.S. banks realizing whose money it really was, or to have the lawyer act as a trustee of an offshore trust and use this position to open a bank account.
  • While most of the lawyers asked for some information about the minister, and his source of funds, only one lawyer refused to provide assistance during the meeting itself.

A number, including Mr. Silkenat, indicated they would need to carry out more checks before they could take our investigator on as a client. Mr. Silkenat also indicated that he had to make sure that no crimes had been committed and, if so, would have to report them.

None of the lawyers broke the law. To find out more about the investigation, including the responses we received from the lawyers featured read our briefing paper here.

Ultimately, this is not about individual lawyers - it's about what is wrong with the law. The tactics described in the film are commonplace. It is simply too easy to hide who you you are and what you are doing behind companies.

This has to change. You can help fix this problem, and help cut off some of today’s worst crimes at the source.

This is a national problem, so to address it, Congress needs to act.

And this investigation shows New York to be at the heart of this issue. So the state's Congressional Delegation, including its senior Senator Chuck Schumer, need to demonstrate leadership.

This means moving their colleagues in Congress to support federal legislation to crack down on the abuse of anonymously owned shell companies in the U.S.

Join us in calling on Sen. Schumer, New York’s Congressional Delegation, and Congress to enact common sense reforms that make company ownership in the U.S. more transparent, and prevent our country from being a dumping ground for suspect money.

This petition is now closed, thank you to everyone who signed it!

For more on the problem of anonymous companies, watch this brilliant animation by our friends at TED.

For more on Global Witness's campaign to end anonymous company ownership, click here.