Shell companies(LLP’s) under fire in Delaware
Delaware’s top law-enforcement official is taking aim at shell companies formed under the state’s popular corporate laws to help funnel hush money to a porn star linked to President Donald Trump and move drug funds for Colombian revolutionaries. Attorney General Kathy Jennings filed papers Thursday seeking to dissolve more than a dozen business entities that took part in crimes in the U.S. or helped wrongdoers violate international sanctions. The move comes after the state — the corporate home to more than half of U.S. public companies and more than 60% of Fortune 500 firms — has been criticized for lax oversight of limited-liability companies set up to facilitate shady business dealings.
“We are sending a clear message that Delaware will not tolerate or enable those who use the corporate franchise as an instrument of crime, fraud, and deception,” Jennings said in an emailed statement. The state is asking a judge to dissolve a total of 15 companies.
Limited liability companies, known as LLCs, are popular business formations in Delaware because the state provides virtually no information about who owns the entities or who serves as directors. The LLCs are also attractive because they protect assets from creditors and only require a $300 yearly fee. Two companies in Jennings’s sights are Essential Consultants LLCand Resolution Consultants LLC, which were used by former Trump lawyer Michael Cohen to facilitate a hush payment to Stormy Daniels to keep her from disclosing a tryst she says she had with Trump in 2006. Cohen pleaded guilty last year to lying to a U.S. Senate committee about efforts to build a Trump Tower in Moscow. Cohen began serving a three-year prison sentence in May.