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CORPORATE OWNERSHIP FRAUD TO BE FOCUS OF JOINT STATE AND FEDERAL TASK FORCE
Nevada Secretary of State Ross Miller Joins with Internal Revenue Service and Nevada Attorney General for Aggressive Enforcement
Posted Date: 9/9/2011

For Immediate Release
Contact: Bob Walsh, Deputy for Southern Nevada
(702) 486-2450
rwalsh@sos.nv.gov  

(Carson City, NV; September 9, 2011) – Corporate entities registered in Nevada and the formation agents and registered agents representing those entities will be the focus of the new Corporate Ownership Fraud Task Force that was announced today by Nevada Secretary of State Ross Miller. The Task Force will investigate registered Nevada business entities that are suspected of being involved in illegal activities including tax evasion, money laundering, securities violations, and the marketing of shell or shelf companies for fraudulent and/or deceptive purposes.

Miller has appointed former criminal prosecutor Tera Ames as his Special Liaison to the Task Force which will also include Special Agent in Charge Paul Camacho from the Internal Revenue Service, and John P. Kelleher, Chief Deputy Attorney General of the Attorney General’s Bureau of Criminal Justice Fraud Division. The Task Force will use shared resources and information to target possible criminal activity.

“We have a unique law in Nevada which allows us to demand a list of beneficial owners of any entity registered in Nevada that is suspected of illegal activities,” said Miller. “We plan to use that law aggressively, which is why I’ve brought in a criminal prosecutor to be my liaison to the Task Force. Tera Ames has already launched investigations into some of these corporations, and with the assistance and resources of the other Task Force members we’ll be stepping up our pursuit of fraudulent activity.

“Contrary to some criticism relating to Nevada, we have not seen much evidence of Nevada’s business statutes either enabling criminal activity or posing a barrier to criminal investigations. In the very rare instances when we’ve been contacted by law enforcement, our statutes have given us the opportunity to provide them with information and be a resource rather than an obstacle. But we have in fact seen some individuals and entities falsely promoting Nevada as a safe haven for criminal activity. Some of these marketing campaigns are promoting illegal activity and we intend to work through the task force to bring them to justice.”

IRS Special Agent in Charge Paul Camacho, who will represent that agency on the Task Force, said, “This partnership between the IRS and the State of Nevada signals our mutual resolve to address fraudulent activities. We certainly respect the laws of this state, including the corporate ownership laws; however we do not respect law breakers. This task force effort significantly adds to our arsenal of weapons to fight financial fraud.”

The IRS recently took aggressive action against individuals involved in asset protection schemes. In July, William S. Reed, Richard Neiswonger, and Wendell Waite were indicted on federal charges of defrauding the U.S. Government, mail fraud, wire fraud, conspiracy and money laundering in connection with an IRS Criminal Investigation probe. The Task Force intends to share information related to these types of offenses and jointly investigate when appropriate.

Additionally, criminal fraud relating to disguised corporate ownership has long been a focus of the IRS and was once again named as one of the IRS’ 2011 Dirty Dozen Tax Scams. In this scheme, corporations and other entities are formed and operated in certain states for the purpose of disguising the ownership of the business or financial activity by means such as improperly using a third party to request an employer identification number. Such entities can be used to facilitate underreporting of income, fictitious deductions, non-filing of tax returns, participating in listed transactions, money laundering, financial crimes and even terrorist financing. The IRS will work cooperatively through the Corporate Formation Fraud Task Force to identify these entities and to bring the owners of these entities into compliance with the law.

The Task Force’s investigations will be backed by an equally aggressive prosecutorial effort by the Nevada Attorney General. “I have always made crimes related to consumer protection and securities fraud a high priority,” said Nevada Attorney General Catherine Cortez Masto. “My office is pleased to join this task force to ensure we protect the public and legitimate businesses from less scrupulous operators.”

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