Scottish shells
After years of busy trading, LAS was forced to adapt its strategy in 2017. The future of its thriving office in Edinburgh, Scotland, was suddenly threatened when the UK government announced tougher transparency rules designed to curb an explosion in anonymously-owned Scottish limited partnerships (SLPs).
The new rules targeted SLPs after investigative journalists at The Herald newspaper, OCCRP, the BBC’s File on Four radio programme revealed how some Scottish shell companies were linked to international money laundering scandals.
Before the crackdown, in 2015 and 2016, LAS and other company-formation agencies had created record numbers of SLPs as demand for this type of shell company soared.
At the peak of the boom in SLPs, no agency was doing more to meet surging demand than LAS. Bellingcat, the research collective, later found LAS had created more than 1,600 partnerships in Scotland between 2015 and 2017.
But after new transparency rules were applied to Scottish partnerships, LAS’s business in Edinburgh soon went into decline and its offices in the city were wound down in 2020.
A leaked LAS email to one client, written in Russian, explained: “Unfortunately, this type of SLP company has often been used for fraudulent activities, attracting the attention of … British authorities and the international press.
“Due to this and also due to the latest AML inspection by the regulator… LAS has decided to suspend the registration and maintenance of Scottish partnerships.”
The email comes from a leak of almost 12 million documents from the offshore secrecy industry, known as the Pandora Papers. It was obtained by the International Consortium of Investigative Journalists.
LAS Express
LAS’s operations elsewhere in the UK were changing too. In 2018, the agency moved out of its headquarters in a smart Georgian townhouse in Fitzrovia, London. The website, las-international.com, was taken down and replaced with a pared-down site, rebranded as “LAS Express”.
At the same time, hundreds of companies LAS had registered to the old Fitzrovia address were transferred to a nearby office above a Mexican burrito restaurant, where their administration was taken over by a new company within the LAS empire called Company Advice LTD.
Company Advice continued LAS’s company-formation activities in the UK until 2021, Dovzhik and Utinane told Finance Uncovered.
“But in 2021, LAS and all associated companies stopped offering any locally regulated services linked to company-formation in the UK, the added.
According to records held at Companies House, however, more than 800 active companies remained registered to the office above the Mexican restaurant at the end of March this year, many of them formed and administered by offshore companies associated with the LAS agency. Since then, new companies have been added there every week.
In recent months, companies have been formed at this address with sole director-shareholders living in war-torn Eastern Ukraine, Kazakhstan, Latvia and Cyprus. The most recent company set up for a Russian shareholder-director was incorporated just six days before Vladimir Putin began the invasion of Ukraine.
Asked who had set up these new companies after LAS stopped offering company-formation services in the UK, Dovzhik told Finance Uncovered she did not know. She noted that some of LAS’s former clients may have used the address above the Mexican restaurant without realising LAS was no longer in business there. “We have various types of corporate clients and some … usually do all [Companies House] filings themselves, without our involvement.”
Of older companies registered at the same address — also still active, according to Companies House records — Dovzhik said many of these firms would shortly be declared dissolved as paperwork was brought up to date.
Meanwhile, a few firms may continue to show up as “active” firms for much longer, though, in truth, they had been abandoned by their ultimate owners some time ago, she said.
According to analysis by Finance Uncovered and the BBC, before it ceased trading in the UK, LAS registered 244 ELPs above the Mexican restaurant on behalf of its clients, of which 181 were still active at the end of March this year.
