August 11, 2026

Senator Warren Statement on Treasury Final Rule that Guts Law to Combat Criminal Abuse of Shell Companies

Washington, D.C. – United States Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, released the following statement on the Trump Administration’s publication of a final rule gutting the bipartisan Corporate Transparency Act — a law previously championed by President Trump’s own current National Security Advisor:

“This is a gift to cartels, criminals, and U.S. adversaries that exploit shell companies to move millions through our financial system. The Trump Administration has dismissed law enforcement warnings, ignored the role that shell companies play in crimes ranging from drug trafficking to fraud to sanctions evasion, and gutted a statute that Secretary Rubio once championed as ‘the most significant anti-corruption and money laundering law in decades.’ Secretary Bessent should reverse this decision. And he needs to testify in front of this Committee to explain why he’s putting American national security at risk.”

Ranking Member Warren and her colleagues have previously conducted oversight highlighting how the Trump Administration’s rollback benefits Chinese money laundering networks that move huge sums for drug cartels; harms efforts to combat fraud in U.S. government programs; and helps a range of other bad actors. Ranking Member Warren and her colleagues have also asked Treasury to explain Elon Musk’s potential involvement in gutting the law, given recent public reporting that Mr. Musk uses a network of dozens of secretive companies that are potentially the same type of entities that would be subject to the law’s transparency requirements.

Law enforcement groups and national security experts have sounded the alarm about the Trump Administration’s rollback of the CTA. Public reports have long documented the abuse of U.S. shell and front companies by Sinaloa cartel operatives, Iranian sanctions evaders, and those stealing technology for China’s military.

Since last year’s interim rollback, significant risks have come into clearer focus:

Drug cartels and fentanyl

• The Daily Caller said: “Trump Admin May Have Accidentally Empowered Cartels To Flood America With Fentanyl, Republican Legal Experts Warn.”

• The Trump Administration itself published several documents showing that Chinese money laundering networks use shell and front companies to launder drug proceeds and other illicit funds for drug cartels. In just one case, “‘law enforcement identified more than 100 shell companies . . . used to launder at least $77 million in narcotics proceeds.’ These companies were allegedly connected to the network of a Chinese national ‘seen as a key link between Mexican cartels and Chinese chemical companies in sourcing the precursor chemicals for fentanyl’ and ‘vital in converting drug funds into cryptocurrency.’”

Iran sanctions evasion

• Treasury published an analysis criticizing three foreign jurisdictions for having “opaque corporate registries” that Iran exploits—while simultaneously gutting corporate transparency here in the United States, where Iranian sanctions evaders have been known to operate.

Fraud

• GAO published a report indicating that providing beneficial ownership information—the purpose of the now-gutted CTA—would have helped fight fraud in federal government programs, including procurement-, grant-, and eligibility-related fraud.

• Secretary Bessent touted FinCEN’s Alert on fraud in Minnesota without highlighting his own department’s finding that criminals in Minnesota relied on shell companies to commit fraud in government programs and without noting that his CTA rollback makes such fraud easier on a nationwide scale.

Sex trafficking

• New reports indicate that Jeffrey Epstein, already known to have used dozens of shell companies, exploited U.S. Virgin Islands-registered shell companies to facilitate sex trafficking after bank officials raised concerns about his constant cash withdrawals. Secretary Bessent’s decision to roll back enforcement of the CTA means shell companies based in the U.S. Virgin Islands can stay anonymous.

Organized and transnational crime

• The Financial Action Task Force issued a new warning that shell companies provide criminals with a “getaway car” to evade law enforcement.

• Law enforcement groups came out against Treasury’s decision, with the National Narcotic Officers’ Associations’ Coalition stressing, “It is the criminal enterprises—drug traffickers, money launderers, and their financial enablers—who stand to gain if this law is weakened.”

• DOJ charged a Venezuelan national for laundering $2.8 billion using U.S. shell companies and Tether cryptocurrency, uncovering the crime through the use of confidential informants who heard the suspect bragging that, if the FBI were to visit one of his companies, they would find only “A Twinkie and a bag of popcorn.”

The CTA didn’t require onerous paperwork. It instead required basic identifying information about true owners—name, address, birthdate, a government identification number, and a picture of the corresponding physical ID. The American people support commonsense steps to address significant risks to their security.

Indeed, surveys of the American people show “overwhelming” support for the CTA, with 81 percent of respondents agreeing that “(a)sking some small businesses to do 20 minutes of paperwork identifying their true owner is a small price to pay for keeping our communities safe from drug trafficking, terrorist financing, and other financial crimes.”

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