Shell company

A shell company is not illegal. Holding companies, dormant subsidiaries and special-purpose vehicles are ordinary corporate machinery, and most shells are boring.

What makes them useful to a fraud operation is that a registered company is a credential. It has a name, a number, an address and a bank account, and each of those can be checked and will check out — which is why “I looked them up on Companies House and they’re real” is not the reassurance people take it for.

Three uses recur across the schemes on this site. As a merchant of record, so the descriptor on a card statement carries a name the victim has no reason to recognise, and so chargebacks land on a disposable entity rather than the brand. As a receiving account, so that transfers go somewhere with a plausible business name instead of an individual’s. And as a credential, where the entity exists mainly to file something with a regulator — the Justice Department alleged in November 2025 that at least ten sham entities had been used to file false investment adviser forms with the SEC, which then made the fake advisers look registered.

The FTC’s December 2025 refund action illustrates the first use plainly: four separate companies sat behind one set of unauthorised continuity plans.