The two partner-affiliate companies that acted as registered US agents for the Mossack Fonseca law firm, one in Wyoming and one in Nevada, have cut their ties to companies for which they were responsible, reports McClatchy.
A registered agent is a company that handles bill payments, renews incorporation and files annual reports. The Panamanian head office of Mossack Fonseca established a company in Nevada called Media Group Services LLC (MGS), which acted as a registered agent for what is estimated to be at least 1,000 companies in the US. MGS resigned abruptly from its duties as a registered agent for 1,024 companies. Now client organizations in the US that enjoyed Mossack Fonseca services must find a new administrator.
According to a Nevada Registered Agents Association spokesperson, while "registered agents" have, in the past, refused services if laws were being broken or taxes being evaded, no "registered agent" has previously abandoned so many business entities simultaneously.
Finding a new administrator will prove a challenging task, as the Mossack Fonseca database automatically paints these financial organizations as undesirable clients.
"Most major registered agents… would probably consider this (Panama Papers) database toxic. They probably don't want to touch it," McClatchy quotes Nevada Registered Agents Association president Trevor Rowley as saying.
But the issue is a double-edged sword, as shown by earlier developments in Wyoming. A company called AAA Corporate Services acted as a "registered agent" under M.F. Corporate Services Wyoming LLC. Some time after the release of the Panama Papers, AAA Corporate Services cut ties to Mossack Fonseca. AAA did not elaborate on the reasons for their decision, with a representative saying only, "We're not their agent…. That's the only thing I have to say about it."
The move puts Mossack Fonseca in a troubling position, as under Wyoming legislation, M.F. Corporate Services Wyoming LLC must find a new agent in 60 days. The group's affiliate did not release any of its 24 clients mentioned in Panama Papers (as opposed to the 1,024 released by Media Group Services LLC in Nevada), but cannot provide services without an agent in the middle. If the Wyoming affiliate fails to find a new agent, it will be dissolved by the office of the Wyoming Secretary of State.
Mossack Fonseca and its affiliates are currently being battered by numerous investigations and are facing crippling fines. Neither the Nevada and Wyoming partner-affiliate organizations are responding to phone calls or emails. It is unclear how Mossack Fonseca can survive the turmoil, as the US Federal Government is actively seeking ways to close tax loopholes that allowed the schemes to be perpetrated in the first place.
