Michigan Attorney General Dana Nessel recently joined a bipartisan coalition with 41 other attorneys general urging the U.S. Senate to pass S. 2563, the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act.
The letter was sent last week to Sens. Mike Crapo and Sherrod Brown, chairman and ranking member, respectively, of the Senate Committee on Banking, Housing and Urban Affairs.
The act updates the federal framework for fighting money laundering and terrorism financing, which has not been reassessed since its inception in the 1970s. The act creates new tools for information sharing between financial institutions and law enforcement. In addition, it requires a covered entity to report its “beneficial owners,” the actual people who benefit from or control the entity.
Currently, most states do not collect information that identifies who owns or benefits from corporations and other legal entities. Without this information, states are handicapped in efforts to detect shell companies that are concealing illegal activities.
Shell companies often have no physical presence and generate little to no activity, which Nessel said allows criminals — such as drug traffickers, human traffickers, terrorist financiers, tax evaders and corrupt government officials — to anonymously shelter and transfer the proceeds of their crimes.
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