The Delaware Court of Chancery granted the Attorney General’s order to dissolve four LLCs and two corporations owned by Paul J. Manafort, Jr. and Richard W. Gates, III.
“This is another victory for the integrity of Delaware’s corporate brand,” said Attorney General Jennings. “Paul Manafort and Richard Gates violated Delaware law and abused the corporate franchise to commit federal tax fraud. Dissolving their LLCs and corporations ensures that they can never again be used in such schemes. We will continue to enforce all regulations governing Delaware LLCs and corporations and ensure that nobody—no matter his connections—is above the law.”
The Delaware entities were used to launder $75,000,000 in funds from the Ukrainian government to assist Manafort and Gates in tax fraud and other crimes, a release stated.
Five of the six entities in question also violated administrative requirements of Delaware law: LOAV Ltd. has been suspended for tax delinquencies since March of 2020; Davis Manafort International LLC lost its Good Standing status in June of 2020; BADE LLC was involuntarily canceled for failure to appoint a Registered Agent in June of 2019; Jupiter Holdings Management LLC was involuntarily canceled for failure to appoint a Registered Agent in December of 2017; and Davis Manafort, Inc. was voided for failure to file annual reports and pay franchise taxes in March of 2014.
Manafort, who briefly chaired the 2016 political campaign of President Donald Trump, was convicted by a jury trial in August 2018 and pled guilty in September 2018 to two counts of Conspiracy against the United States, which included a conspiracy to launder money, commit tax fraud, violate foreign agent registration statutes, and obstruct justice by witness tampering.
Gates pled guilty in February 2018 to Conspiracy against the United States and making a false statement to Special Counsel’s Office.
Legislation passed by the General Assembly and signed in July 2018 by Gov. John Carney modified Delaware’s Limited Liability Company Act to authorize the Attorney General to request that the Court of Chancery cancel the certificate of formation of a Delaware limited liability company. The Attorney General already had similar authority for Delaware corporations.
It marked a major change after long-standing criticism that Delaware’s minimal disclosure requirements gave cover to criminal enterprises, dictatorships and drug kingpins.
Neither Manafort nor Gates provided any cooperation in this matter. Neither party responded to the complaint, despite having over 13 months in which to do so, the release stated.
