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Global concern about shadowy corporations includes tiny Las Vegas firm

Nevada Gov. Brian Sandoval Monday expressed concern over allegations that secretive corporations established in the Silver State have been used in global money laundering and said he will work with other elected officials on any necessary changes in state law.

“For a multitude of reasons, Nevada is a preferred destination for many of the world’s leading businesses and emerging industries,” Sandoval spokeswoman Mari N. St. Martin said late Monday. “The governor is concerned by any allegations that state law may have been broken or circumvented to further illegal activities.

“The Nevada secretary of state’s office will review the allegations and the governor’s office will work closely with legislators and regulators if any policy recommendations or legal steps stem from the secretary’s findings.”

Sandoval’s comments followed revelations Sunday that a Panamanian law firm with a subsidiary in Nevada has formed countless limited liability corporations — legal entities whose ownership may easily be concealed — used by political and business leaders around the world to move money out of their countries, perhaps to avoid legal scrutiny or taxes.

Some of those dealings involve LLCs established by Las Vegas-based M.F. Corporate Services, a subsidiary of the Panamanian law firm Mossack Fonseca.

A tiny firm described in court papers as having only one employee, M.F. Corporate Services lists an office at 5858 S. Pecos Road. It has incorporated 1,026 limited liability companies, or LLCs, in Nevada since its founding in 2001, though only 195 of the companies remain active, according to state records. Attempts to reach M.F. Corporate’s office were unsuccessful Monday, though a lawyer for the company declined comment.

Limited liability companies are legal structures commonly used to prevent creditors from going after company officials to collect business debts.

“Knowledgeable lawyers advise their clients to … incorporate or become an LLC to avoid personal liability,” Las Vegas tax attorney Bob Grossman said.

A spokeswoman for Secretary of State Barbara Cegavske said the office has “no specific information” yet indicating the identified corporations tied to M.F. Corporate Services have violated state law.

If additional information becomes available to support the allegations, the office will take “appropriate remedial action,” the spokeswoman said.

Nevada, Delaware and other states allow LLCs to be incorporated with little or no information about their purpose or ownership, requiring only the name of a manager and resident agent on public records.

While revelations based on Mossack Fonseca documents leaked to a German news organization have made headlines worldwide, the work of M.F. Corporate Services has been at issue in Nevada courts in the past.

In a 2014 federal court lawsuit, New York-based hedge fund NML Capital Ltd., alleged that 123 corporations registered in Nevada by M.F. Corporate Services for Mossack Fonseca were used to launder $65 million diverted from Argentine government accounts. The hedge fund wanted to force disclosure of the people behind those LLCs in hopes of recovering some of the $1.7 billion it had lost in Argentina’s bond default.

The Argentina case includes allegations that Mossack Fonseca tried to “wipe clean” records in Las Vegas sought by NML Capital. Mossack Fonseca denies any wrongdoing.

The relationship between M.F. Corporate Services and Mossack Fonseca is detailed in federal court documents.

In a sworn affidavit in July, Jurgen Mossack, a namesake of the Panamanian law firm, tried to distance his firm from any business activities in Nevada.

He said Mossack Fonseca does not practice law in Nevada and does not have an office or any “physical presence” in the state.

The firm also does not control the “internal affairs or daily operations” of M.F. Corporate Services, Mossack said.

But U.S. Magistrate Judge Cam Ferenbach last year said in an order that he considered M.F. Corporate Services the “alter ego or agent” of Mossack Fonseca, allowing him to compel the Panamanian law firm to produce records in litigation over the shell companies.

“Mossack Fonseca controls M.F. Corporate Services by … prohibiting it from conducting business with other clients and directing its daily business activities,” Ferenbach wrote.

Ferenbach said M.F. Corporate Services creates “on-the-shelf corporations that are ready to go in less than 24 hours” for Mossack Fonseca’s worldwide clients.

Ferenbach quoted from a sworn deposition given by M.F. Corporate Services’ lone employee in Las Vegas at the time, Patricia Amunategui, a Chilean-born former UNLV student who explained how the two companies worked together.

“When one of Mossack Fonseca’s clients purchases an on-the-shelf corporation, M.F. Corporate Services begins the process by assembling paperwork and mailing it to the Nevada secretary of state,” Ferenbach said. “When the Nevada secretary of state is finished, Ms. Amunategiu testified that attorneys at Mossack Fonseca complete the transaction in Panama.”

Amunategui, who is listed as secretary of the company, could not be located for comment Monday. She testified that though she worked for M.F. Corporate Services, she received all of her direction from Mossack Fonseca, Ferenbach wrote.

Ferenbach said M.F. Corporate Services creates “on-the-shelf corporations that are ready to go in less than 24 hours” for Mossack Fonseca’s worldwide clients.

Data Editor Adelaide Chen and reporters Sean Whaley and Carri Geer Thevenot contributed to this article. Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135. Find him on Twitter: @JGermanRJ

 

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