Attorney General Becerra Joins Multistate Letter Supporting Proposed Bipartisan Federal Legislation to Fight Money Laundering and Terrorism Financing

SACRAMENTO – California Attorney General Xavier Becerra today joined a coalition of 42 attorneys general in sending a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs expressing support of S. 2563, the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act, which would help fight against money laundering and terrorism financing. The ILLICIT CASH Act would require corporations and other legal entities to provide nationwide disclosure of their “beneficial ownership”, which is defined as a “natural person” who controls an entity, owns at least 25 percent of an entity, or receives economic benefits from one. This much needed update to the federal framework for addressing financial crimes will provide an important tool in identifying the people behind shell companies, which are often used to conceal and facilitate illegal activities.

“The ILLICIT CASH Act will provide the California Department of Justice and our law enforcement partners with additional tools to identify criminal enterprises that use shell companies as a means to avoid detection and evade the law,” said Attorney General Becerra. “Our office is committed to working with our local, state, and federal partners to hold criminals engaged in money laundering and terrorism financing accountable to the fullest extent of the law.”

Currently, most states do not collect information that identifies who owns or benefits from corporations and other legal entities. Without this information, states are handicapped in efforts to detect shell companies that are concealing illegal activities. Shell companies often have no physical presence and generate little to no activity, which allows criminals – such as drug traffickers, human traffickers, terrorist financiers, tax evaders, and corrupt government officials – to anonymously shelter and transfer the proceeds of their crimes.

The ILLICIT CASH Act would require small corporations and limited liability corporations to disclose their beneficial ownership to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Entities would also be required to update FinCEN within 90 days of any change in their beneficial owners. The ILLICIT CASH Act would require FinCEN to release beneficial ownership information to local, tribal, state, or federal law enforcement, national security, or intelligence agencies. With this information, law enforcement can combat criminals of all kinds and stop their use of shell companies to launder the proceeds of their crimes through American banks and other financial institutions.

In submitting the letter, Attorney General Becerra joins the attorneys general of Arkansas, Oregon, Alabama, Alaska, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, West Virginia, Wisconsin, the District of Columbia, Northern Mariana Islands, and Puerto Rico.

A copy of the letter can be found here.