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The Use of Dissolved Companies
to Conceal Assets
A “dead” corporation can continue to acquire assets for years
after it becomes legally defunct.
By Michele
M. Palmer and Richard L.
Palmer
January 2016 | More Articles
As there are so many complicated and “high tech” methods to
conceal assets, many investigators often overlook the more simple method – i.e.,
the need to also search for assets in the name of “dormant” or “dissolved”
corporations.
Such entities are great places to hide assets, and here is why:
When most people see that a corporate name is on the “dead list”
at the Secretary of State or company registrar’s office, they put it out of
their minds. However, assets acquired during the term of that corporation may be
very much alive. Further, a dead corporation can continue to acquire assets for
years after it becomes legally defunct.
These “dead corporations” of interest can have existed for many
years before becoming dormant or being dissolved. However, with increasing
frequency, we have found that persons often open a company, keeping it open just
long enough to obtain the foundation papers and tax registration number, only to
close it shortly afterward. In the short time that the company is active, the
subject opens one or more “company accounts” by providing the banks with the
necessary documentation to show that they are dealing with a “legitimate”
company.
However, once the company is dissolved, the accounts are left
open, and the banks do not ask for any additional proof that the company is
still active. Thereafter, these “company accounts” can be used to “park” funds
or act as “transfer points” for funds that the subject is seeking to conceal. In
these dead corporations we have frequently found significant amounts of funds
(i.e., in the tens of millions), art, antique vehicles, yachts, aircraft and
real estate. Because these companies have been dissolved, most lawyers and
investigators do not bother searching for assets under dead companies’ names.
A search for hidden assets should also include bank accounts
under the name of dissolved companies with which the subject was involved. Our
standard practice is to include property searches, vehicle searches, and
searches for other assets in the name of any discovered dormant or dissolved
corporations. You may turn up significant assets.
The cost of these additional searches is relatively small when
you consider the potential gain. Never underestimate a debtor’s resourcefulness!
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To discuss a corporate intelligence or financial
investigation matter, or to learn more about Cachet International’s
investigative resources in your jurisdiction, contact
Michele Palmer by
email or at
602-899-3993. |
Copyright © 2016 by Cachet International, Inc. All rights reserved. This article or any portion thereof may not be reproduced
or used in any manner whatsoever without the express written permission of
Cachet International except in the case of brief quotations embodied in
noncommercial uses permitted by copyright law. This article does not constitute
a legal opinion or advice and should not be interpreted as such. |
