Hoylman hopes to unmask LLCs

State Senator Brad Hoylman

By Sabina Mollot

State Senator Brad Hoylman is hoping to shine some light into the shadowy world of limited liability corporations which, under current New York law, do not have to provide names or addresses of their owners when the companies are registered. Because of the mysterious nature of LLCs, they can be used to give seemingly endless campaign contributions as well as hide illegal activities like tax evasion and money laundering. To combat the money laundering issue, which has also been linked to terror funding, legislation has already been introduced at the federal level by Congress Member Carolyn Maloney, and Hoylman said his own bill is modeled after that one.

Hoylman’s legislation, announced, on Monday, would:

  • Make it mandatory for LLCs organized in New York or that do business in the state to disclose who their owners as well as provide a current residential or business address
  • Require the creation and maintenance of a publicly available database of those LLCs and their owners
  • Impose penalties that range from ten thousand dollars in fines to three years in prison for LLC owners who knowingly provide false, incomplete or outdated information.

Hoylman said he believes the legislation is sorely needed, especially in the wake of the conviction of former Majority Leader Dean Skelos’ corruption conviction being overturned and former Assembly Speaker Sheldon Silver’s before him.

“I think this legislation is needed to expose the underbelly of some of the more clandestine part of corporate structure,” he said. “As we saw in the Silver and Skelos convictions, both of which have been sadly overturned, LLCs play a role in the corruption that has overwhelmed Albany. Now you see politicians getting away with it. I think it’s clear that people were using their positions to benefit themselves or others and that sometimes LLCs are the preferred kind of vehicle when there aren’t fingerprints, to influence policy and to hide money.”

Hoylman gave an example of how in his own district, notorious tenant harassing landlord Steven Croman hid behind a wall of LLCs. “It was hard to figure out which buildings were owned by Croman,” he said. “There were multiple LLCs with no denotation of his ownership. This information is not available.”

Naturally, he is expecting some resistance to the bill in the Republican-controlled State Senate, which has also so far blocked the closure of the LLC Loophole.

However, Hoylman insisted there is “always scuttlebutt” about senators stepping down, which could shift the balance of power even before January. “There’s always an opportunity for the Senate to be flipped.”

Asked if he thought the $10,000 fine could be considered just a cost of doing business for some LLC owners, Hoylman said no, that he believed even the fine could pose enough of a threat to thwart the behavior.

According to Maloney, who authored the Corporate Transparency Act, the United States is the only advanced country in the world that doesn’t force LLC owners to identify themselves publicly.

“This puts our national security at risk as anonymous shell companies have become the preferred vehicle for money launderers, criminal organizations, and terrorist groups because they can’t be traced back to their true owners,” she said.


One thought on “Hoylman hopes to unmask LLCs

  1. Pingback: New NY Senate passes long-stalled LGBTQ protections, progressive bills | Town & Village

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