Is the Use of Nominees in Any Form Illegal?

Abstract

The use of nominees in investment has occurred in daily business activities. The nominee is deemed to have violated the existing regulations. Several incidents of the use of nominees have taken the world by storm. The use of nominees has involved several world leaders. The purpose of this study is to ascertain the history of the use of nominees in investment and to determine whether the use of nominees can be classified as money laundering or tax evasion. This study employs a normative juridical methodology. This study concludes that the use of nominees is motivated by money laundering and tax evasion. A nominee may be a trustee or a special purpose vehicle. However, using nominees may result in criminal sanctions if the funds are obtained through criminal acts. Investors and the names used can be considered perpetrators of criminal law violations. The resolution of nominee and money laundering problems must accompany the standardization of population data and tax data. Banning the use of nominees does not solve the problem.