Massive leak exposes how the wealthy and powerful hide their money

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115. Over 200,000 shell companies are involved in the Panama Papers leak — here's why that's a big deal

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As the name suggests, shell companies are hollow. They do nothing but manage the money inside of them, with lawyers or accountants listed as management, the BBC reports. If authorities try to figure out whose money is really inside of the company, they end up just getting those lawyers and accountants.

This makes shell companies perfect for owning assets or opening bank accounts without leaving a trace of whose money it actually is.

"Even in places that do make shareholder information public, it is often still easy to make the owners anonymous," explains the investigative group Global Witness. "This is done by making the shareholders be further companies registered somewhere that keeps their owners secret, or by registering the company in someone else's name, even that of a total stranger. Astonishingly, it's entirely legal to do this in the majority of countries, and there's an entire profession dedicated to providing such 'nominee' services."

The watchdog nonprofit Global Financial Integrity points out that shell companies have been used in everything from Medicare fraud in the United States to corruption in Malaysia.

http://www.techinsider.io/why-shell-companies-are-a-huge-deal-2016-4