Attorney General Jeff Jackson Sues to Stop Federal Rollback of Anti-Money Laundering Law

Treasury’s new rule exempts more than 99% of companies from a bipartisan law that helps police follow drug money

FOR IMMEDIATE RELEASE
Monday, November 2, 2026
Contact: comms@ncdoj.gov
919-538-2809

RALEIGH – Attorney General Jeff Jackson and 20 other attorneys general filed a lawsuit to stop the U.S. Treasury Department from gutting the Corporate Transparency Act, a bipartisan law Congress passed to crack down on money laundering. Drug traffickers and other criminals use shell companies to hide their money. This law helps law enforcement find out who is really behind them.

“These changes allow people who hide behind sham businesses to traffic drugs like fentanyl and commit crimes like tax fraud to get away with it,” said Attorney General Jeff Jackson. “This law exists so that law enforcement can go after these criminals, and the federal government is trying to weaken it. They can’t do that, and we’ll see them in court.”

Shell companies are businesses that exist only on paper, with no real employees and no real work. Criminals use them to launder money from drug trafficking, human trafficking, tax fraud, and other crimes. The Corporate Transparency Act became law on Jan. 1, 2021, with bipartisan support in Congress. It requires companies to tell the Treasury Department who actually owns them. That gives law enforcement a name to follow when the money leads somewhere it shouldn’t.

In August, Treasury’s Financial Crimes Enforcement Network (FinCEN) finalized a rule that exempts all U.S. companies from reporting their owners. Foreign companies no longer have to report their U.S. owners. Together, that exempts more than 99% of the companies the law used to cover. FinCEN also announced it would delete the ownership records already on file. Some of those records could hold evidence of unsolved crimes.

The attorneys general allege these changes are illegal. Congress passed this law, and a federal agency can’t repeal it with a rule change. The law also requires FinCEN to keep these records for at least five years after a company shuts down. The lawsuit further argues the changes violate the Administrative Procedure Act, which sets the rules federal agencies must follow when they change regulations. The coalition is asking the court to strike down the changes and immediately block FinCEN from deleting the records.

Attorney General Jackson has fought fentanyl money laundering before. In March, he led a bipartisan coalition that secured commitments from WeChat to help law enforcement disrupt fentanyl money laundering on its platform. Later that month, he led a bipartisan group of attorneys general urging the federal government to take action on drug traffickers using messaging apps like WeChat and Weixin to move money.

Attorney General Jackson is joined in filing the lawsuit against FinCEN and the Treasury Department by the attorneys general of Arizona, California, Colorado, Delaware, the District of Columbia, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Virginia, Washington, and Wisconsin.

A copy of the complaint is available here.

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