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After facing court challenges the 2021 Corporate Transparency Act, has gone into effect, requiring many owners of corporations, limited liability companies and sole proprietors to report beneficial ownership information (BOI) to the federal government.
But loopholes in the act have inadvertently made churches the ideal venue for international money laundering.
In prior years, law enforcement would complain about the difficulty of identifying the owners of companies because their names didn’t appear on corporate records.
For some companies, the only contact is a registered agent who doesn’t personally know their client. On other occasions the names of managers of limited liability companies (LLCs) and dummy directors of corporations appear on company registration documents rather than the owner.
This lack of corporate transparency protects terrorists, international money laundering, tax evasion, and drug smuggling.
Lack of Beneficial Ownership Hides Aircraft
When reporters Mark Smith and Tanya Eiserer of Dallas-based ABC affiliate WFAA discovered in 2019 that more than 1,000 aircraft were registered to two P.O. boxes in the small Texas town of Onalaska – which has no airport – they began to ask questions. It was, after all, more aircraft than are registered in either Seattle, San Antonio or New York City.
WFAA reported, “In 2008, a plane crashed into a home in Caracas, Venezuela, killing seven people. The pilot was a twice-convicted drug smuggler. The plane was registered in the United States to Aircraft Guaranty Corp. The company never identified the real owner.”
“There’s more: In 2013, a helicopter also registered to Aircraft Guaranty crashed into a golf course in Mexico. ‘I was never able to find out the actual person who was responsible for that helicopter accident,’ said attorney Ladd Sanger, who represented the families of three of the five people killed in the crash.”
Financial Crimes Enforcement Network (FinCEN)
Although legislation allows the courts to impose fines of up to $10,000 or two years in prison for failure to comply, the Financial Crimes Enforcement Network (FinCEN) has temporarily placed enforcement actions on hold. New FinCEN rules should be finalized by March 21st with an extension of reporting deadlines.
FinCEN’s Frequently Asked Questions page lists 23 exemptions to the law, including “Tax-exempt entity” and “Entity assisting a tax-exempt entity.”
Megachurches, Jets, Mansions, Yachts, and LLCs
Trinity Foundation has identified several megachurch pastors subject to the new reporting requirements due to their accumulating real estate through LLCs.
Gary and Drenda Keesees, pastors of Faith Life Church in New Albany, Ohio own multiple properties registered to 1852 Farmhouse LLC. (The church is unrelated to televangelist Keith Moore’s church of the same name, although both preach the prosperity gospel.)
Pastor Keith Craft of Elevation Life Church in Frisco, Texas, owns a Durango, Colorado, mountain home registered to JKW Holdings LLC.
Holding companies are exempt from the BOI reporting requirement when they are wholly owned by a tax-exempt organization. However, there is no evidence that JKW Holdings LLC is owned by Craft’s church.
Pastor Craft also owns a Cessna 650 jet registered to Kingdom Heir Aviation LLC and is available for charter through Trinity Jet Charters while televangelist Creflo Dollar is an officer for the company World Heir Inc. which owns a Gulfstream G-IV and a Gulfstream GV-SP (G550) jet.
Craft also operates a yacht charter business. Craft Yacht Charters is a trade name registered to his company Servant Leadership, LLC. Tampa pastor Rodney Howard-Browne also owns a yacht and serves as manager of HB Global Chartering, LLC.
Failure of Government Oversight
The 1974 Privacy Act, Bank Secrecy Act and Corporate Transparency Act restrict what information the FBI, IRS, Treasury Department and other government agencies may share with the public.
Ownership information provided under this new law would not be available to the public.
Access to these owner names would be helpful in searching the Offshore Leaks Database for people involved in offshore money laundering.
An informant has reported to Trinity Foundation a ministry executive embezzling more than $100 million. Suspicious Activity Reports delivered to the Treasury Department by banks might reveal this crime, but they are off limits to journalists as well.
Criminals thrive in darkness. A transparent church and business world would discourage financial crimes.
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