While ‘123 Main Street’ might seem like an address that gives you pause, there are actually 7,644 locations that bear that address. It might very well resemble the quaint building pictured above in the charming colonial town of Wilmington, Delaware. Yet, the innocuous looking single story structure at 1209 North Orange Street is utilized as the primary legal address of over 300,000 companies!
While small palm fringed islands might be the traditional stereotypes of secrecy havens, addresses like the above have transformed Delaware into the largest secrecy haven in the world. In fact, according to a study by Cambridge University, the United States is the easiest country in the world for terrorists and criminals to open anonymous shell companies. Ironically, creating a U.S. shell company takes less information than acquiring a library card!
Yet, Delaware is not alone, addresses like 1209 North Orange Street have proliferated all over the world..
In an investigation by Transparency International, their research identified 766 UK corporate vehicles alleged to have been used in 52 large scale corruption and money laundering cases approaching $100 billion. Notably, around half of the 766 companies alleged to have been involved in high-end money laundering were based at just eight UK addresses!
In an interview with Buzzfeed News, an industry expert, referring to the abovementioned addresses, said that they were a huge red flag, and that “these UK addresses consistently appear in global laundromat investigations,” while “noting that two of them popped up in the Deutsche Bank mirror trades scandal and the Russian and Azerbaijani laundromat cases.”
As shell companies remain a fixture of global illicit finance, the ability to detect potential shells through their use of these addresses appears to be one of the most effective ways to combat illicit finance. With an unquantifiable number of shell companies around the world, the next laundromat could be residing in any of the nondescript buildings we regularly walk past.
Sigma Terminal™ is the most comprehensive risk analysis database with data collected from over 1 billion data points in under 30 seconds, you can be confident that you have all your due diligence bases covered, including whether an entity is located at any of the 1000+ unusual addresses.