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Experts: Terrorists forming U.S. shell companies [but NOT in the Cayman islands]

palestinian-terroristsBy James McGinnis From The Intelligencer
Thirty-four years after U.S. sanctions were imposed in 1979, the Iranian government’s national bank was able to purchase and rent out property on New York’s Fifth Avenue just off Rockefeller Center.
With lax regulations, Iran’s Bank Melli could easily set up shell corporations operating within the United States, said Cyrus Vance, New York County district attorney, on Wednesday.
Manhattan’s chief prosecutor was called to testify before a terrorism financing subcommittee chaired by Congressman Mike Fitzpatrick, R-8, of Middletown.
“The U.S. financial sector is too important for this task force to overlook,” said Fitzpatrick, opening the hearing. “The risk is too great to ignore.”
Vance urged lawmakers to require more information about businesses operating within U.S. borders.
Criminals and terrorist organizations aren’t setting up offshore accounts in the Cayman Islands, he said. “That country actually collects beneficial ownership information (on companies),” he testified. “A prosecutor sitting in the Cayman Islands is better positioned to root out terrorism finance in her own markets than I am in ours.”
Congressman Mike Fitzpatrick chairs a terrorism financing hearing in Washington, D.CThe 36-story skyscraper at 650 Fifth Ave., allegedly owned by Iran, was seized by the U.S. government in 2013, officials said.
“This building generated substantial rental income, which was diverted to shell entities, and from there to Bank Melli,” Vance told members of Congress.
In a statement on its website, Iran’s national bank denies any wrongdoing. Bank Melli accuses federal prosecutors of a smear campaign unsupported by evidence.
Others urged similar regulations for business startups Wednesday before the congressional subcommittee. “There are now solutions on the table that require action,” said Chip Poncy, senior center for the Center on Sanctions and Illicit Finance.
Vance said one of his investigators recently contacted a firm in Delaware, which offers to incorporate new businesses. “She stated that she lives in France, that she wanted to incorporate a company in Delaware,” Vance testified. “She was told that this would be no problem. A corporation could be set up in five minutes. She needed to provide only a name and email address.”
In 2013, U.S. Sen. Carl Levin, D-Michigan, introduced the proposed Incorporation Transparency and Law Enforcement Assistance Act. That bill would require states to collect the “beneficial ownership” information of corporations registered in each state. Months later, a similar bill was introduced in the U.S. House of Representatives. Those two bills never came to a vote, however.
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