It is often a challenge for regulators, law enforcement agencies, or attorneys for victims of scams to identify the scammers and serve the complaint on them. Scammers, like other cybercriminals, like to hide behind offshore companies and trustees. Specialized companies like Wilfred Services Ltd on St. Vincent & the Grenadines facilitate scammers with their services. Most recently, CFTC served Wilfred Services with the PaxForex compliant in its capacity as the operator’s Company Secretary.
Company Formation Agencies and KYC
In fact, these Company Formation agencies are legally obliged to perform KYC/AML checks on their clients. For this purpose, IDs and other documents must be provided and properly checked. Therefore, these Company Formation agencies – like Payment Processors – have to know the identity of their clients, i.e. the ultimate beneficial owners (UBOs) of scam operating entities. In most cases, these agencies are also registered as a Company Secretary or a Director and therefore have an official function and address. This allows for the legally effective service of documents from authorities.
The U.S. CFTC has recently taken this approach in the case of the complaint against Laino Group Ltd as the operator of the CFD broker PaxForex (read FinTelegram report here). The Defendant in the CFTC complaint, Laino Group Limited, was established by Wilfred Services Ltd (www.wilfredinternationalservices.com) in St. Vincent and the Grenadines. This agency also provides the registered company address “Suite 305, Griffith Corporate Centre, Beachmont P.O.Box 1510, Kingstown – St. Vincent and the Grenadines.” Wilfred Services, too, acts as the Company Secretary for the Defendant and, therefore, the CFTC has served the complaint against Laino Group Limited with c/o on Wilfred Services.
Company secretaries in all sectors have high level responsibilities including governance structures and mechanisms, corporate conduct within an organisation’s regulatory environment, board, shareholder and trustee meetings, compliance with legal, regulatory and listing requirements.Company Secretary in Wikipedia (link)
A Company Secretary as an officer in a legal entity is liable for any misconduct of the company. In this respect, authorities and lawyers should adopt this “CFTC Approach” more often and hold the Company Formation agencies responsible for their function as crime facilitator and company officer.