In this article, we use the term ‘shell companies’ to describe companies with little to no real business activities. Shell companies are ideal for concealing financial flows. By using the bank account of a shell company for cash transactions, the origin of the money becomes harder to trace.

Intermediary or advisor
Our analyses have identified many criminal intermediaries setting up shell companies. These financially experienced individuals know how to handle the necessary paperwork. The intermediary will, for example, accompany the straw owner to the Dutch Chamber of Commerce (Kamer van Koophandel: KVK) or a notary to register a new company.

Straw owner
Sometimes, criminals or intermediariesmake use of a straw owner to set up a company. This way, the company (and its bank accounts) will belong to the straw owner on paper, while being effectively run by criminals. In return, the straw owner will often get financial compensation.

Reports
In many instances, reports of unusual transactions connected to shell companies are filed by notaries. They are in the perfect position to catch irregularities because of their legal involvement in setting up a new business. Their reports can concern business owners who have little to no experience in the respective sector or companies that are registered at an improbable address. For example, a company in need of a warehouse which is registered at a terraced house.

Part of a greater network
Apart from notary reports, the combined reports of other informing parties can also point to the existence of a shell company or straw owner. Recently, we were notified about large sums of money being transferred to and from a bank account within a short period of time. Our analysis showed that the legal person owning the bank account was part of a larger network of shell companies.