www.wired.com">IF TRUMP IS LAUNDERING RUSSIAN MONEY, HERE'S HOW IT WORKS
by Garrett M. Graff, Business, wired.com-- May 11, 2018
But to Treasury officials and law enforcement who have long pursued money laundering and terrorist financing probes, it's not what Donald Trump or Michael Cohen did in any single transaction that raises red flags"it's how they conducted business day in and day out. The layers of shell companies, the contracts involving pseudonyms, the law firm cut-outs to make deals.
"Many of the activities, when viewed in aggregate, point to a deliberate attempt to create opacity," says Amit Sharma, who used to work on countering terrorist financing after 9/11 at the Treasury Department. "When you take two steps back, you see a murkiness and level of complexity with which the Cohen and Trump companies have operated"what are they hiding? Why are secondary and tertiary entities signing under pseudonyms and cover' names? Truly legitimate, transparent companies don't need to do that. [...]
Yet while regulations"especially since 9/11"require in-depth documentation and identification for basic banking for individuals, it has been much easier"until literally today"for corporate entities to hide their identities behind lawyers and shell companies. "Financial institutions are mandated to collect all this data on its customers, but up until now, financial institutions have not had to do the same for companies," Sharma says. "For companies, often it has simply been the business location and Tax ID number and we don't know the underlying ownership. We don't know whether it's a Russian oligarch." (In fact, new Treasury Department rules that require stronger due diligence on banks to understand who actually owns"or has a controlling interest in"a company only come into effect today, May 11, 2018.)
As Sharma says, "Trump and his companies have exercised this practice for many years"it seems that every new project, every product, every new building, he's starting a new company or legal entity to manage it. This has been the case for overseas operations and activities as well. [...]
In 2016 The Wall Street Journal's Jean Eaglesham, Mark Maremont, and Lisa Schwartz outlined a specific example of just that sort of structure: "Donald Trump owns a helicopter in Scotland. To be more precise, he has a revocable trust that owns 99 percent of a Delaware limited liability company that owns 99 percent of another Delaware LLC that owns a Scottish limited company that owns another Scottish company that owns the 26-year-old Sikorsky S-76B helicopter, emblazoned with a red TRUMP' on the side of its fuselage." All told, the Journal reported, 15 entities were used at that point to "own" Trump's fleet of two airplanes and three helicopters.
Layer on layer of corporate structure makes it hard for investigators, tax officials, or prying lawyers to figure out who owns what, the underlying source of money for specific transactions, whether taxes are being appropriately paid in a given jurisdiction, or who might be partners in what enterprises.