Financial Transparency Coalition

WASHINGTON, DC – The past twenty-four hours has seen the publication of two reports and the disclosure of an asset forfeiture complaint which, collectively, lay bare the size and seriousness of a global money laundering epidemic—underscoring the need for better incorporation transparency measures.

WASHINGTON, DC - Today the U.S. Department of Justice (DoJ) unsealed an asset forfeiture claim against a $30m Malibu house, a $38.5 million Gulfstream jet and other assets owned by the son of the President of Equatorial Guinea, claiming that they were bought with the proceeds of corruption. Global Witness, which in 2006 first revealed that Teodorin Obiang owned the Malibu mansion, welcomes this action after several years of investigations.

In most financial scams, the victims simply lose their money. In Africa, some lose their lives. Sub-Saharan Africa experienced an exodus of more than $700 billion in capital flight since 1970, a sum that far surpasses the region’s external debt outstanding of roughly $175 billion. Some of the money wound up in private accounts at the same banks that were making loans to African governments.

Most large-scale corruption cases involve using legal entities to conceal ownership and control of corrupt proceeds, and policymakers should take steps to improve transparency to reduce opportunities for wrongdoing, according to a study released today by the Stolen Asset Recovery (StAR) Initiative of the World Bank and the United Nations Office on Drugs and Crime. The report, The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It, examines how bribes, embezzled state assets and other criminal proceeds are being hidden via legal structures – shell companies, foundations, trusts and others. The...