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The RegTech Pulse
American Kleptocracy - Shell Companies, Secrecy and the New "Offshoring"
Tune in for an explosive conversation with Casey Michel, author of American Kleptocracy: How the U.S. Created the World's Greatest Money Laundering Scheme in History.
Casey shares his insights into the labyrinth of complex kleptocratic networks, the rise of anonymous shell companies, and the role individual U.S. states play in transnational money laundering. Beyond the U.S., he discusses the global repercussions of kleptocracy and money laundering, the influence of kleptocrats and the extravagant (and very public) lifestyles these individuals can lead. We also dive into the steps being taken in places like the UK to expose who is really behind shell companies in an effort to combat global money laundering.
For more information on Casey's work, visit www.caseymichel.com.
DISCLAIMER: The information provided in this podcast is for informational purposes only and is not intended to and shall not be used as legal advice. The views and opinions expressed in this podcast are solely those of the speakers and do not necessarily reflect the views or positions of LexisNexis Risk Solutions. LexisNexis Risk Solutions does not warrant that the information provided in this podcast is accurate or error-free.
On this episode of the Rig Tech Pulse, we're joined by Casey Michelle, author of American Kleptocracy how the US created the world's greatest money laundering scheme in history. If you're interested in learning more about Casey, his book or his other journalistic works, you'll find a link to his website in the show notes. Casey, thank you so much for joining us today.
Speaker 2:Julie, thanks so much for having me today.
Speaker 1:No, no problem, Can you? I mean, you've got a very interesting background as a journalist and obviously now as an author. Could you just give us a little bit of background about kind of your career to date, how you came up with sort of the areas of interest that you work in now, and then we'll dive into the book after that.
Speaker 2:Yeah, absolutely. I mean, I think I've followed maybe a relatively atypical path in so far as it's not the one that you would generally find of a journalist certainly an American journalist covering transnational crime, transnational money laundering. I mean much of it. There's plenty of influences my previous work as a journalist in the States and elsewhere, as well as my time back in academia and graduate school here in New York studying the topic of transnational money laundering and how it is that authoritarian and dictatorial regimes move and hide and launder their money across the West, especially in places like the United States of America.
Speaker 2:But really, to get back to the root of things, on my end, kind of the initial spark for this was my time living, working and covering the country of Kazakhstan. This was back in the early 2010s. I was actually working as a Peace Corps volunteer over there, working as an English teacher in a very small village up in northern Kazakhstan, obviously working with some wonderful people, working with some wonderful kids. But while I was there, it was my first time really living and operating and socializing in a country overseen by what we would come to understand as a kleptocratic regime at the time, overseen by a truly distasteful gentleman named Nersultan Nazarbayev, who really created the playbook for so much of what we now understand as modern kleptocracy. But that's my first time living and operating in a country like that and seeing firsthand not only how it is that these regimes, these individuals, these ruling family members and their inner circles rule these countries, control the state finances and really pillage those nations themselves and those populations, tapping into the educational budgets, the health budgets, the infrastructure budgets, but beyond that, how it is that those countries and those regimes move their money elsewhere, nersultan Nazarbayev himself moving so much of the money associated with himself and his inner circle into places like the West and certainly into places like the United States of America.
Speaker 2:So I've said elsewhere, the book that I wrote wasn't dedicated to Nazarbayev himself. It certainly wasn't written with him in mind in particular. There are plenty of other stories that I addressed throughout the book, but he was always this kind of little voice in the back of my head or this little figure on my shoulder as I wrote, who was just, you know, someone I liked to reference throughout because of the playbook that he set in Kazakhstan, that I got to see on the ground there. That really propelled so much of my interest in modern kleptocracy.
Speaker 1:So I guess you came at it obviously sort of seeing firsthand and then the book itself. So American kleptocracy how the US created the world's greatest money laundering scheme in history. You worked as an investigative journalist. How did it go from working on investigative pieces to actually writing a book? Is it something that you always wanted to do? Is it something that you always had in the back of your mind? Is it kind of a? How long did it take to get from sort of concept to actually publishing this thing?
Speaker 2:Yeah, julia, that's a great question and honestly, it wasn't something I wanted to do initially at the outset.
Speaker 2:Insofar as I wanted to, or ended up writing a book on kleptocracy and certainly the US's transformation therein, I mean, it wasn't something that I was motivated by at the outset, but I think part of that is the reason that I ended up writing the book in and of itself, because at the outset of covering transnational money laundering networks, covering kleptocratic networks, investigating how it is that they use whether it's American shell companies, american trusts, american real estate agents, american lawyers, so on and so forth to hide and launder their millions or billions, or potentially even more, in illicit wealth attached to them and their regimes, you know when I certainly began as a journalist, and I'm sure as many other investigative journalists, began covering this topic, you know our understanding of this world, our understanding of these networks, how they operate, how they maneuver, how they navigate and, beyond that, who's helping them construct these networks.
Speaker 2:You know our understanding of that at the outset is so miniscule and it really took years for me working as a journalist, studying in graduate school, connecting with some incredible academics that had devoted their careers to this, communicating with other policymakers in places like Washington or London or Ottawa or elsewhere, to kind of slowly begin peeling back the layers of how it is that the world of modern kleptocracy operates in the 21st century.
Speaker 2:But beyond that actually developed in the first place, and obviously beyond that where things are going moving forward.
Speaker 2:I mean again, at the outset I had no idea I'd ever write a book like this, but that was because I and the others that were beginning their careers doing this had such a little understanding of how these networks operated. And it wasn't until I don't know how many years, in six, seven, eight, nine years working as a journalist and obviously again in academia as well, that I finally have this idea, finally had this notion for addressing in particular the American story, the American role within this. Obviously the story is about transnational, this transnational phenomenon writ large, but in particular the American transformation into the center of so many of these off-shoring networks. And, as I'm sure you and listeners can hear you know I do have this American accent. I am a proud, you know, born and bred American that realized only after years of working on this topic that there was a particular story of the United States transformation that was worth telling, because I and so many other Americans as well, had no idea that this was taking place right here in the United States of America.
Speaker 1:And some, I mean some of the figures. I think initially, like you know, I won't kind of go into the book too much because obviously you know people can read it for themselves, but I mean it's vast amounts of wealth. You know huge amounts of money and I think you talk about one of the phrases that you use is sort of these sudden eruptions of wealth. Can you, without sort of spoiling too much, I maybe give some of the obvious examples that you talk through in the book, because I mean it's fascinating and it's mind-blowing?
Speaker 2:Sure, I mean, I think that's, without tooting my own horn, a great phrase to highlight, because I do think that notion of eruptions or geysers, or new fountains of wealth, especially illicit, questionable, suspect wealth erupting around the world over the past 20, 30, 40 years, much of it from newly independent states, post-colonial states, post-soviet states, in which new ruling powers, ruling regimes, grab the levers of state power and of state finances and open their economies, open their bodies politic to new investments without any kind of regulatory or transparency oversight. That we saw, whether it's in places like Sub-Saharan Africa, certainly in places like Central Asia, parts of Eastern Europe, parts of Southeast Asia, over and over and over again, these new governments coming in and opening up these new seams, these new sieves, these new geysers of wealth that were, as we now know, always looking for a new home, always looking for a new place to go. Because these new eruptions of wealth, unfortunately, because they were affiliated with and associated with and controlled by those ruling regimes which all too often are toppled, are overthrown, follow themselves a fowl of, whatever government may follow them, those individuals and their wealth associated with them are always looking to move that money elsewhere, to hide that money elsewhere, while still enjoying that money, the fruits of their rule, of their regime, or of their family members or of their inner circles as well. This is a story we saw over and over and over, again and again. I obviously write about a few of them in my book, focusing on countries like Equatorial Guinea, focusing on countries like Ukraine, but by no means limited to those we've seen this in, whether it's the Gabon's, the Venezuelas, the Sri Lankans, the Malaysians, the Kyrgyzstan's, the Kazakhstan's of the world, over and over and over.
Speaker 2:Anytime, you see this authoritarian, non-democratic regime taking power and especially again in these post-colonial, post-soviet states, the eruption of wealth being hoovered up, as we now know, by these Western jurisdictions, in many cases the former colonial powers themselves, whether it's the United Kingdoms, the France's, or even the Canada's, the Australia's or, as I write about in this book, the United States of America, that opened their doors over and over and over again, year in and year out, to all of this illicit wealth, creating the kinds of policies, creating the kinds of loopholes and exemptions that invited all of this suspect, questionable in many cases, dirty money in to be laundered, to be stashed and, at the end of the day, to be enjoyed by those new ruling regimes, those new kleptocratic regimes whose wealth, according to the best estimates that we have, runs into the trillions and potentially tens of trillions of dollars.
Speaker 2:And I say again, the best estimate. So much of what we have seen in this world is so baked, so slathered, so covered in secrecy that we still have such a small idea of how much money we're actually talking about. But again, the best estimates we're talking about trillions of dollars, in some cases equivalent to the size of the GDP of China. It's really this kind of invisible superpower that we're talking about when we talk about the offshore economy.
Speaker 1:And I guess when you talk about loopholes and sort of the ways that this is being made possible anonymous shell companies that's kind of the key element that you call out there. And obviously there are states in the US where this happens. It's not country wide. So I guess the question maybe for people who aren't familiar with the US, why is it that some states can allow these other? The federal government can't do anything about it. Why is it that legislation is differing so much?
Speaker 2:Sure, absolutely. I mean. Another great question that really kind of gets into the weeds about the particular American elements of this story. Just to pull back for a moment, I think a lot of folks at this point are familiar, at least tangentially familiar, with anonymous shell companies. These are legal entities, I mean, they are companies, they are corporations, but they exist really only on paper. There's no brick and mortar, there's no product they sell. They exist only for the sake of existing and, beyond that, for anonymizing who's controlling them, who's controlling their finances and who is controlling their wealth, and beyond that, where that money associated with those companies is actually going. And again, this is not a specifically American phenomenon or creation.
Speaker 2:We see anonymous shell companies formed around the world, whether it's in Canada, in Australia, perhaps, most spectacularly, in the United Kingdom. Think of things like London or the British Virgin Islands or the Cayman Islands, British overseas territories and crown dependencies. There's plenty of jurisdictions around the world, especially in the West, that provide anonymous shell companies incredibly easily, incredibly cheaply. You never have to actually go to these jurisdictions to set one up. A simple phone call or email will suffice. That's all fine and good. The American component of this is simply, by dint of its size, of its magnitude, the United States of America towers above all other jurisdictions, all other countries and competitors when it comes to setting up shell companies, when it comes to setting up anonymous shell companies. The last stat that I saw in the most recent study was that the United States of America now forms more legal entities than the next 40-plus tax havens combined. As one example of the magnitude, the size and the heft of the United States of America, the particular twist within the United States' example and role within shell company creation and, beyond that, the role of shell companies in transnational money laundering networks, is that these companies are not actually created by the federal government themselves. They're not actually created by the White House or by the Treasury Department or by folks in Washington DC.
Speaker 2:This has a far broader history that I go into more detail in the book. It really is a fascinating intellectual journey. But at the end of the day, it's not the federal government that oversees shell companies. It's the American states themselves. It is, and obviously the US has 50 different states. What we have at the end of the day is 50 different policies, 50 different sovereign entities that are overseeing their own shell company empire, shell company policies, shell company creations and protections.
Speaker 2:Again, the book goes into far more detail. Some of those states may be familiar to readers and listeners at this point. These are places like Delaware, these are places like Wyoming, places like Nevada. These are all too often relatively small states that don't have a lot of other industrial base or natural resource base that realize there is a growing global market Again much of it rooted in the kleptocratic regimes, the dictators, autocracies, narco traffickers, environmental climate destroyers, wildlife poachers, on and on and on, that are looking to use anonymous shell companies to hide and launder their money legally easily and, in many cases in perpetuity, to hide their tracks.
Speaker 2:These American states, the American state legislatures in charge of these states, realize there is a growing demand for anonymous shell companies.
Speaker 2:And why can't? Why shouldn't the Delaware's and the Wyoming's and the Nevada's of the world, and certainly of the US, be the ones to provide it? Why can't the Delaware's of the world be the ones that make it as easy as possible for any and all, regardless of the source of wealth, regardless of how they made their money, to set up an anonymous shell company, to enjoy all of the secrecy provisions while still being able to control all the wealth associated with that shell company and they'd be able to move that money into whatever they want, launder it into whatever they want. Why shouldn't Delaware be the titan of this new world of anonymous shell companies and, beyond that, the world of offshoreing? So, again, this is just one tool in a broader American toolbox. But when we're talking about shell companies in the US, it's worth remembering it's not the federal government, it is the states that are all competing with one another to provide more secrecy provisions, more offshoring, more financial protections and services than one another for any and all clients around the world.
Speaker 1:And there are examples as well. I think what is key to point out is just because somebody is setting up an anonymous shell company, that doesn't necessarily mean that they are guaranteed to be involved in kind of illegal behavior, that it's money laundering. I think you've got a couple of examples in the book of where companies have been set up anonymously for legitimate reasons. But I guess it does. It enables that right. As soon as that money is in their shell company, there's no way of knowing where it's come from, right.
Speaker 2:No, this is you're absolutely right.
Speaker 2:Just because you see an anonymous show company associated with a figure, with a network, with a government, with whatever it may be, that doesn't necessarily mean that money associated with that show company is illicit, is ill-gotten, is dirty.
Speaker 2:I mean, I think the most famous example certainly the one that I mentioned in the book is that when the Disney Company was first trying to purchase land in Florida to create the magical kingdom of Disney World down there, they didn't want to spook locals who would then drive the price for their land up, so they actually formed anonymous show companies themselves to purchase all of the land that would then become Disney World itself. So again, we do have anonymous show companies to thank for all the fun times families have been having with Mickey Mouse and the rest of the Disney folks in Florida for however many decades it's been. Now, again, that's all fine and good, but we have God knows how many more examples at this point of arms traffickers, of cartel heads, of sex traffickers and then, beyond that, kleptocratic regimes themselves also relying on these anonymous show companies. As far as I'm concerned, the negatives of these tools clearly, and by a significant margin, outweigh all the positives that we've seen associated again with the theme parks and the Disneyland's of the world in the past.
Speaker 1:True and I think and going back to the kleptocracy angle, I think what some of the things in the book that it's sometimes it's so obvious and it's such in terms of the money and the wealth and the showiness. You know there's somebody who's collected this, the biggest Michael Jackson collection in the world. That was one of the things that they did with their money. You know, people buying Maserati's, people sort of partying on yachts, I guess. And one thing that we talked about when we had conversations earlier was is social media almost making it more obvious where this money is going? Because obviously, if you're partying on a yacht, you know, with a billionaire, you'll post it to your Instagram, you'll post it to your TikTok. So it's not necessarily them, but maybe sort of the people around them wanting to show off their wealth.
Speaker 2:Yeah, I think, I think and again, another great question, I think, really one of the beauties, one of the few enjoyable moments I had writing this book, putting this book together, you know, investigating the broader world of kleptocracy and obviously beyond that, the United States role therein is, you know, one of the case studies that I focus on in the book is this guy named Theodore Obyang, who you know his father is now the longest standing dictator in the world has been ruling the small African nation of Equatorial Guinea for decades. At this point, almost a half century. At this point, equatorial Guinea actually has, you know, it's a very wealthy nation, has the highest per capita GDP of any African state and yet so many of its people, so much of its population, lives in dire, abject poverty, no access to education, no access to, you know, things like clean water, you know, no access to just the basic infrastructure of life, because all of that money, so much of that money has gone toward the ruling family. So this guy, theodore Obyang, he's the son, you know, he's kind of the heir apparent to his father, and there is nothing more he loves than trying to transform that wealth and use that wealth to transform himself into a modern celebrity in the 21st century. You see him, you hear stories of him hobnobbing and schmoozing with all of these celebrities in places like the US, in places like Europe. You know he builds up this fleet of you know, super high-end cars, he has the yachts, he has the private jets, he has the clothes and the watches and he has all of the trappings of modern celebrity and certainly of modern wealth as well.
Speaker 2:And he was, you know, maybe a little spoiler for the book. He is the gentleman that you just mentioned a moment ago, julia, about collecting, creating the world's greatest collection of Michael Jackson memorabilia. I wouldn't know nearly as much about what he has been doing, who he has been doing it with, where he's been spending his money, how he's been spending his money. I wouldn't know nearly as much of that if it hadn't been for his social media account, in particular his Instagram account, which, again, I hesitate to recommend to people because I think it's going to leave a certainly a sour taste, a very queasy feeling, in your stomach after you do.
Speaker 2:But it is a glimpse into this lifestyle of these kleptocrats, of these transnational crooks and criminals that are taking full advantage of their role in these regimes, in pillaging these populations in immiserating entire nations and then enjoying that wealth elsewhere.
Speaker 2:And I will say it again, you know there's far more details in the book, but one of the things that I was able to glean from his social media account which you know writing before the 2010s, before the 2010s we do, but 2020s we never would have known about is he had a, you know, a big birthday bash a year or two ago that he was able to invite all of these American singers, all these American celebrities to, and there's videos on his Instagram account of them singing to him, then performing for him, schmoozing with him, apparently not caring one way or the other about where he got his wealth, about where they are then getting their payment from, what it might mean for local individuals, families, populations in Equatorial Guinea itself, to say nothing of their participation in these transnational money laundering networks.
Speaker 2:You know, social media has provided just a incomparable insight into the lives of these kleptocrats. That certainly, from a research perspective, has been a gold mine. But, again, you do end up having a plenty sour taste in the back of your throat when you're done scrolling through these Instagram feeds.
Speaker 1:Yeah, I can imagine I'm tempted, but then not as well.
Speaker 2:Yeah, yeah, yeah.
Speaker 1:Because I guess that, and I guess, going back to sort of the more serious elements of it, the damage to society is obviously huge from the communities where the wealth is exploited and it's removed from. But then, in terms of the nations that are then holding that money, I mean, does it undermine national security? Does it undermine sort of sanctions effectiveness? It's such a loophole.
Speaker 2:No, I don't want to sound like I'm overblowing things, but when we're talking about trillions of dollars swirling and swilling through the offshore economy, we're talking about a topic that touches on, frankly everything, and this was honestly one of the difficulties of the book is narrowing these things down, narrowing these topics, narrowing these policies and, obviously, the effects on the ground. The title of the prologue was something that my editor actually provided for me. His phrase that we ended up using for the title of the prologue to the book was too big to see, because we're talking about things that certainly in the US, talking about everything from the finance sector to the real estate sector, to the art and auction house sector over the automobile sector, the luxury goods sector, plenty of industries involved but the impacts on the ground range from everything from democratic backsliding to environmental degradation and climate change, to national security, to on and on and on. Whether it's wealth inequality, whether it's gender imbalance and gender violence, whether it's, again, wildlife trafficking, narco trafficking, sex trafficking, over and over and over again.
Speaker 2:All of these topics are related to the financial secrecy provisions, the things like anonymous shell companies or anonymous trusts or anonymous investments elsewhere, the tools and tactics that these kleptocrats use with abandon and that are provided by, in many cases, western jurisdictions, especially the United States of America. I mean, I can't tell you how many times, julia, I was writing this book, that I would just kind of sit back in my chair to have to try to force myself to wrap my mind around all these different topics that are intertwined with that interweave with what I was trying to write about, which is the modern world of kleptocracy and, beyond that, how it is that these kleptocratic regimes are using the United States of America as their effective money laundromat, their effective piggy bank to continue, in many cases, destroying their nation's wholesale, while gripping, holding on to power themselves.
Speaker 1:I mean, the litany of topics just goes on and on and on, and I guess, in a more optimistic note, we talked about some of the things that are being done in the UK to kind of address this problem and there are things that are, I guess, trying to happen in the US, maybe talk through some of the legislation that potentially are going to come in to, I guess, well, attempt to tackle the problem.
Speaker 2:Sure, julie, I have been accused and probably rightfully so of being maybe a little too optimistic about where things are, where things are going, and maybe, at the end of the day, that optimism is maybe all we have to hang on to. That's not exactly true. We have seen significant policy developments over the past few years, but there is still plenty of room to go in terms of finally clamping down, finally bringing some transparency to these networks. So maybe I'll just talk about some of the reasons for my optimism over the past few years and you just mentioned the United Kingdom. For a decade, maybe longer, I think it's the United Kingdom that a lot of folks think of when they think of Western jurisdictions that have transformed into homes of dirty money. I mean, after all, london now has the nickname of London grad for the Russian oligarchic wealth that has been stampeding for years into the United Kingdom, as well as, obviously, the UK's overseas territories and crown dependencies, places like the British Virgin Islands and the Caimans, providing all of these tools that kleptocrats around the world need. At the same time, the United Kingdom of London has past significant reforms over the past few years that actually had an article just a few months ago in Financial Times celebrating, calling to be emulated elsewhere, because of how progressive and how much foresight we have finally seen from British politicians, from British policymakers. And these are things like finally enforcing the transparency requirements for British formed shell companies, finally being able to identify and then going after those companies that don't identify those who are actually controlling British shell companies. Or look at things like British real estate. At long last we are finally seeing legislation that will no longer allow offshore entities to be purchasing British property in places like Mayfair, in places like Surrey you know, all these other jurisdictions that are so closely associated with oligarchic, kleptocratic wealth. And we have seen finally a focus in London at tackling the scourge of London grad, the scourge of the UK's transformation in the first place. That is absolutely a reason for optimism. The United Kingdom can do this in every other jurisdiction that is now an offshore jurisdiction itself can follow suit and obviously should follow suit.
Speaker 2:Now in the United States of America, unfortunately, we haven't seen as much progress, but we have seen progress nonetheless. A few years ago, the US finally passed something called the Corporate Transparency Act, which is still going through the rulemaking progress. They're still finalizing the language, but once it's finally implemented, will no longer allow the formation of anonymous shell companies in the United States of America. At long last, states and other jurisdictions will have to identify who is actually behind the shell companies in the Delaware's and the Wyoming's and the Nevada's of the world. So we're still waiting for that. We're also still waiting, but it is coming. Not sure if it's going to be this week, next week, next month, a few months from now. It's going to come at some point.
Speaker 2:Regulations from the executive branch, from the White House, finally requiring the American real estate industry to also conduct basic due diligence about who it is selling properties to, about whose money it is circulating.
Speaker 2:It is in many cases laundering into the American real estate industry. Now this is again a far broader story. This should have happened decades ago, but because of an exemption in the real estate industry, the American you know again whether it's residential properties, commercial properties, so on and so forth they've been free to work with any kleptocrat they've wanted for years and at long last that appears to be finishing sometime in the not too distant future. So again, we've seen progress in the shell companies. We've seen progress in real estate. There are plenty of other areas we have seen slow, fitful progress in, but it has been progress nonetheless. Now again, it would have been great to have this 20, 30 years ago, but I do think, or maybe wonder, whether or not we had to kind of get to this point in the first place before folks realized just how much damage places like the United States of America were doing, what an outsized role the Delaware's, the Wyoming's and Nevada's were playing for transnational criminal networks to operate into launder untold wealth in the US and elsewhere.
Speaker 1:So I guess there is. There is hope and, like you said, you're often been accused of being too optimistic. I mean, how do you, how do you see things panning out in the future? Do you think that this is going to? I mean, I don't think there's ever going to be a magic one where suddenly everything is wonderful and nothing. You know, there's no kleptocratic activity anywhere. But I mean, how optimistic are you that things will change? What do you think that it will take, maybe above the legislation that you just referred to, to really make an impact?
Speaker 2:I do, I guess, two responses to that, julie One. You know, on the one hand my optimism has continued, however misplaced some of it has been. Unfortunately, much of that is due to Vladimir Putin's you know expanded invasion last year of Ukraine, which I think brought the national security element and salience of kleptocracy certainly unchecked kleptocracy like we see in Russia really brought that to bear to legislators and policy makers in Washington, in London, in Brussels, in Ottawa and elsewhere. You know, I really think that that has lit a fire among policy makers, among civil society, among even those who were just kind of on the fence about whether or not we actually needed things like shell company reform, things like transparency, reform in real estate. You know, this is going to be for future historians to kind of debate and disentangle, but I do think that that's, you know, the fact that that has continued, the fact that it's destabilized so much else has acted as a propellant for these long overdue reforms themselves. That will continue, at least in Western jurisdictions, for the foreseeable future.
Speaker 2:Now you mentioned, you know you don't think the scourge of kleptocracy is going anywhere anytime soon, and you're absolutely right. So you know the demand side from these kleptocratic regimes, dictators, autocrats, arms traffickers, so on and so forth. You know that's not going anywhere. They still want to hide and launder their wealth in. You know third party jurisdictions get it out of the country that they're looting so they can enjoy it elsewhere. That demand's not going anywhere.
Speaker 2:The supply side elements, you know the shell company formation, the anonymous investments, the legal protections.
Speaker 2:You know that is what we see shifting right now and because of the progress we've seen in Washington, because of the progress we've seen in the United Kingdom, as well as in Brussels, as well as in Australia, in the broader West, the progress we've seen, you know, to my mind indicates and we're seeing early evidence of this that the best days of offshoring that wealth in the West may be, perhaps will be behind us, which is great insofar as I certainly no longer want to see the United States of America as the center of the offshoring world.
Speaker 2:But you know, it's kind of like whack-a-mole Some other jurisdiction is going to pop up, some other countries, some other nation is going to pop its head up and say, well, if you're not going to take that wealth certainly we'd love to have it we would be more than happy to service, to anonymize, to launder all that money that the oligarchs and the clup-tocrats around the world want. And certainly we're seeing early indications that other jurisdictions are happy to pick up the slack to offer all of the laundering services that previously the United States and places like the United Kingdom had offered. So, yes, I suppose, with all the optimism about where things are going in the United States, there's still plenty of pessimism abounding, julia, about a new jurisdiction acting as a new home for all the crooks and the criminals and the clup-tocrats around the world to find safe harbor.
Speaker 1:So good for the US, not so good for other areas.
Speaker 1:But we'll see, we'll have to keep an eye on it. I think I guess is there any. You know one thing we always ask on these podcasts is there any kind of closing advice? You know we obviously work with compliance professionals, we work with a range of companies. You know, is there anything that I guess that you would advise in terms of maybe just being aware of this, just raising awareness? How can companies or corporates or, you know, ngos, maybe play their part to try to address this problem?
Speaker 2:Yeah, yeah, absolutely. And again, I'm sure the listeners of this are obviously in many ways far more well versed in these topics than I am and certainly than the general body politic I mean. My advice for the broader audiences out there is to understand that the word, the term offshore is, you know, by the 21st century. It is such a misnomer, it is such a misleading term in and of itself. The days of financial secrecy, jurisdictions, of pro-clutocratic havens being offshore, being small islands in the Caribbean or the Mediterranean or the South Pacific, which they originally were, you know, those days are far, far, far behind us and in the United States example, in case you know, those offshoring services have been brought in a very real sense back onshore. So even though we're using that term offshore finance, offshore services, offshore jurisdictions it is such a misleading term that it's just worth remembering Whenever you see it. It no longer means those small islands somewhere far away. It means those Western economies, those states like Delaware and Wyoming, you know, the landlocked states themselves. That's what it now indicates. It doesn't actually mean literally offshore anymore. I would say more, particularly for audiences that I think you know you and your colleagues are addressing and are working with Julia. It's that one things are really in such flux right now that we're going to see emerging jurisdictions as these new centers of offshore finance. You know, I don't know what's going to emerge, but some other jurisdiction is going to rise to the fore. One thing.
Speaker 2:The other element and one thing we didn't talk about today is, even though I have been talking about, you know, shell companies, real estate investments. You know, to another extent, private equity investments, hedge fund investments. You know auction houses, art markets and so on and so forth. You know, in the United States, one other jurisdiction and one another tool that I go into in the book that I do think is still worth elevating the profile of, is the role and construction of trusts and most particularly the role and construction of trusts in the state of South Dakota, which again the book goes into far more detail on and other journalists have begun looking into it.
Speaker 2:South Dakota has emerged as kind of an offshore haven unto itself that has really kind of refined, has really perfected the art of financial secrecy, of perpetual financial secrecy, that is attracting, at last check, hundreds and hundreds of billions of dollars from around the world that no one has any idea where it's coming from. No one has any idea what it's being done after it kind of goes through this till of South Dakota trusts. You know what investments are flowing from that, what other financial networks are connected to that. You know I was actually just looking at some of the state filings just yesterday and you know South Dakota is on pace to have trillions of dollars in anonymized wealth housed in the state by the end of this decade and tens of trillions of dollars by the end of the next decade. Again, we only have a fraction of a fraction of a fraction of understanding of where that wealth is coming from, which kleptocratic regimes, which components, which criminal networks, which laundering networks it's connected to.
Speaker 2:And you know, for as much optimism as I mentioned a moment ago about progress in Washington in certain elements, we still haven't seen any progress whatsoever about the trust industry. So that's just. You know. One thing I would flag, I would recommend flagging on my end, is just be on the lookout for the usage, the increasing usage, of trust and trust structures, especially out of states like South Dakota, because you know what little we know is incredibly concerning in and of itself, whether it's, you know, money launderers, whether it's fentanyl dealers, whether it's armed traffickers that are already looking to the South Dakotas of the world, to you know, hide their wealth, launder their wealth and use those secrecy provisions for all their worth.
Speaker 1:It's fascinating conversation, casey. Thank you so much for joining us today. It's been brilliant, casey, michelle, author of American Kleptocracy, how the US created the world's greatest money laundering scheme in history.
Speaker 2:Julie, thanks so much for having me. Thank you.
