Treasury Secretary Janet Yellen said Thursday that there is a good argument that the best place to hide and launder ill-gotten gains is actually the United States, despite the fact that small countries are often perceived as major havens for hiding or laundering money.
Switzerland and the Cayman Islands have been a focus of regulators looking to find hidden cash.
But Yellen challenged the belief that the proceeds of corruption or illegal activity are sent only to countries with histories of loose and secretive financial laws, because they are likely to pass through or land in our markets. Yellen highlighted the anti-corruption strategy President Joe Biden's administration rolled out this week, including proposed rules to uncover the owners of shell companies and real estate.
There are far too many financial shadows in America that give cover for corruption. She said that we need to throw a spotlight on them.
She noted that some US states allow for the creation of shell companies without disclosing who actually owns them.
Treasury this week proposed rules under the Corporate Transparency Act, approved by Congress last year, that would create a database of the beneficial owners of most of the companies. The information will be available to law enforcement and tax collectors.
Similar rules will apply to real estate transactions because many corrupt actors can hide their money in Miami or Central Park skyscrapers she called money laundromats on the 81st floor. Yellen said that this financial alchemy makes a mockery of our free and fair institutions.
She cautioned that there is corruption in the United States' broken tax system, which effectively lets the country's top earners and largest corporations get away with evasions, as well as in the country's top earners and largest corporations.