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  4. From 942-year-old directors to 'financial anomalies,' these red flags reveal whether a shell company might be a fraud, according to Moody's

From 942-year-old directors to 'financial anomalies,' these red flags reveal whether a shell company might be a fraud, according to Moody's

Phil Rosen   

From 942-year-old directors to 'financial anomalies,' these red flags reveal whether a shell company might be a fraud, according to Moody's
  • Moody's Shell Company Indicator tracks business fraud and risks.
  • A new report found more than 21 million risk activity flags have been raised.

It might sound obvious, but if a company lists one of its directors as being 942 years old, there's probably something strange going on.

Moody's Analytics in a new report on Monday detailed all kinds of corporate structures and red flags that point to fraud, money laundering, and other financial crimes associated with shell companies, which are often opaque and difficult to regulate.

Moody's Shell Company Indicator found more than 21 million risk activity flags have been raised across 472 million companies as of November 2023.

Here are some of the wildest examples Moody's research found.

Unusual employee profiles

Moody's found instances of individuals holding a ridiculous number of jobs simultaneously, including one person who was observed to have 5,751 roles in nearly 3,000 companies. The data includes 11.5 million outlier directorship flags, the report said.

Other unusual employee details include the extreme age listed for some employees, either ludicrously old or young. The data revealed that some firms have "beneficial owners" older than 122, and some as young as 0.

More than 4,000 directors were listed as younger than five years old, while another director at a Belgium-based firm was even listed as 942 years old, putting this person's birthdate somewhere around the year 1082.

"[O]ur records indicate that over 2,200 people, age 123 or older, are steering companies globally," Moody's director Richard Graham said in a statement. "In the U.S. alone, 1.78 million companies raised flags showing shell company characteristics, according to our indicator model."

Circular ownership

This refers to companies entangled in hard-to-decipher circular relationships, Moody's said, which may suggest fraud and money laundering.

"Indicators of circular ownership can include instances such as a company without a website or digital presence, but with various concurrent directorships," researchers said.

The tracker identified more than 60,000 instances of firms with circular ownership.

Financial anomalies

Moody's tracker raised flags on 3.4 million companies with financial anomalies, including times when the revenue of a firm looks outlandish in relation to its headcount.

"One such finding reveals that a China-based textiles and clothing manufacturer reported more than $2 billion in revenue in 2019 — and only one employee," the report states.

Meanwhile, the tracker also found that some single locations were home to a massive number of registrations listed. A strip mall in Pretoria, South Africa, for example, listed 61,000 registrations, and more than 22,000 registrations are listed at the Pyramids of Giza in Egypt.

"The sheer number of companies being registered can suggest an attempt to hide illicit activity or complicate investigations — by spreading assets or transactions across numerous entities, an individual or group can make it more difficult for authorities to trace the flow of money," Moody's said.


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