Tales for the Lockdown - 2 Truths and a Lie

Twenty Years of Solitude

I count my blessings. I’ve long learned to cope with the myriad distractions that come from working at home. I know just because I can turn on the TV whenever I want, it doesn’t mean I should turn on the TV. Believe me, before many of you, I knew the counter to endless temptations was a very short commute. I’ve been working out of my home office for twenty years. Being locked in did not change that. I was fortunate to be quite busy during the lockdown. From my life during times of corona, I have three things for you. Two truths and one lie.

The Ripple Theory

Link Analysis

I Understand Wyoming Incorporation

I have stated my career rests on a basic principle, one I call the Ripple Theory. What the Ripple Theory means is that as we move through life, we create ripples, evidence and markers of what we did, what just happened, from the hair follicle left at the scene to someone’s distant recollection. But I am neither a historian nor a CSI technician. I am a public records researcher. I know and understand that in addition to strands of hair, we leave lots of DNA in the public domain, from evidence of property transactions to Instagram photos. This ripples can be collected. I collect them and tell stories. In a recent matter, quite the ripple was left out there for me to find.

I have been working for a while on a team looking to track down many millions of dollars, trying to get someone to pay us (us as in the client) when he is not paying a lot of people he owes. Up until one moment, we had known a lot about our target from the ripples he left. Then we knew a whole lot more. In searching in one area, I happened upon a filing.

For the sake of this post, let’s just say that the filing was regulatory in nature. And like a lot of filings that are regulatory in nature, there were exhibits. In this case, this document, public record, in my matter, the ripples were huge. One thing come across in a random Internet search, well I would not say it blew our case wide open, but it greatly increased the amount of information we had on our subject. By. A. Lot. There are ripples everywhere, and my job is to know where they are, and more importantly to know what to do with them when I’ve found them. Lockdown lesson one. The Ripple Theory still applies.

Link analysis. I love saying link analysis. It makes me sound so sophisticated. Here’s my basic blog primer on what it is. Doing. Well, put it this way, it’s a lot more fun to get other people to do the link analysis for you. It’s tedious. Mind numbing work. Imagine staring at a sheet of telephone numbers, needing to figure out which one. I suppose there are AI answers. I suppose if I was the G, there would be a single source I could run each number. I am not sure that is true. Phone numbers come from multiple carriers, land-lines (yes some people still have) and mobile. There is VoIP, Internet lines, and numbers associated with PBX exchanges. There are numbers associated with people and numbers associated with businesses. It is my experience that no one of my public record sources captures every number. It’s not just that. On TV, the bright blond computer nerd types in the number; not only do they always get the subscriber on the first go-around, new screens instantly pop up with reams of data on said subscriber. What really gets me is how quickly they can read though those screens to magically know what needs to be known. In my case, It often takes me two, three times to get the subscriber, if I do. Then I got a person, place or thing, it’s several more steps to figure out why that number mattered. Still, I love saying I did link analysis no matter how long it takes me to do it.

And it’s the kind of information that can make a huge difference in a case. By tracing phone numbers, we can learn so much. Who a person associates, and what comes next. Once we know who they are calling, we can then use that against other data like the amount of calls made and when the calls are made. What prompted a call. What happened after a call. More important, after we do some background on the person called, we can ascertain why the call was made. Link analysis fills in a lot of gaps when it comes to research. Lockdown lesson number two, use link analysis.

I know why people use Wyoming to form their companies. Lie. At best I can say, I kinda know. In the United States, a person has 50 choices of where to register their business. A lot of people are aware of the DELAWARE CORPORATION or at least aware that many companies choose to register their businesses in Delaware. There are legitimate reasons for doing that, and an experienced corporate lawyer will tend to point towards two factors. First, they will tell you that it’s the laws themselves, that Delaware corporate laws tend to favor management and such. Second, they will tell you that said laws are well understood by the local courts, that there is a robust Chancery Court to manage any questions of said laws; there is, that magic thing businesses are said to desire, certainty. As a public record snooper, I wonder if the reason one uses Delaware is that they keep you names off the computer. Yes, your names are there on the corporate docs, but to get those you gotta pay, and pay not minimal amounts. It can keep a lot of your business records from being ripples to collect. Wyoming can do you one better.

In another recent matter, I’ve come across on a few occasions, Wyoming corporations. In one case, I only could tie the company back to my subject because in another public record he had said so. No where in the public filings of the said corporation, did my guy show up as an officer, director, incorporator, organizer, or registered agent. I got to wondering about such things, and I posted the question on my LinkedIn.

Why the Wyoming company. Like I say, it’s a lie to say I fully know the answer. Financial crimes expert, Jim Richards, had the best answer. He pointed me to his own blog, and on his blog, he points us to the distinction between shell companies and shelf companies. To quote:

What exactly are Shelf Companies & Shell Companies? What are the differences?

A Shell company defined by Wikipedia: “A shell corporation is a company which serves as a vehicle for business transactions without itself having any significant assets or operations … Shell corporations are not in themselves illegal, and they do have legitimate business purposes.”

A Shelf company defined by Wikipedia: “A shelf corporation, shelf company, or aged corporation is a company or corporation that has had no activity.  It was created and left with no activity – metaphorically put on the “shelf” to “age”.  The company can then be sold to a person or group of persons who wish to start a company without going through all the procedures of creating a new one.”

As Jim explains, anyone can set up a shell company, but in Wyoming there’s quite the business of shelf companies too. The same corporate lawyer who could explain to you the reason to incorporate in Delaware can also explain to you the legitimate use of shelf companies. For a while, less so now I believe, there was the “reverse merger” thing, where dormant public companies were merged into other companies for the magic of an IPO without the headache of actual investment banker fees. Or penny stocks. You decide. The point is, you can choose to use your shelf company for good or for not so good and for certain reasons in between. Because it is a company not formed by you and with ostensible activity not by you, it is an especially good vehicle for hiding your interests. I think. Lesson number three, I’d like to say I understand the allure of the Wyoming corporation, but I’m not quite there yet.

I wish for a speedy recovery for all those who have lost work, lost wages, lost opportunities, lost their health or loved ones during the pandemic.