The Panama Papers: A global investigation into the secret tactics of tax evasion and fraud

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After the ground-breaking leak of the Panama Papers in 2016, the first US charges have been brought against four individuals in the Southern District of New York.


The encrypted documents detailed the offshore holdings of prominent figures across the globe.


In 2016, an anonymous source leaked confidential documentsto a German newspaper, Süddeutsche Zeitung (SZ), that exposed how the wealthy and elite use certain tax havens to hide their wealth and avoid paying taxes.   The encrypted internal documents were from Mossack Fonseca, a Panamanian law firm, and they detailed the offshore holdings of prominent figures across the globe.


SZ acquired nearly 2.6 terabytes of dataand spent an entire year going through the 11.5 million leaked files in an effort to illustrate the secret financial dealings of the affluent.  Those implicated by the leak included sport stars, political leaders, billionaires, drug traffickers, and many more.  The leaked information spanned nearly forty years and revealed over 214,000 offshore companies linked to individuals in more than 200 countries. The documents came in a wide variety, including emails, passports, spreadsheets, photo files, pdf files, and corporate records and bank accounts of secret companies.


Sifting through the vast amount of data required the help of SZ, the International Consortium of Investigative Journalists, and over 100 other media partners.  This collaborative effort spanned over 80 countries and is possibly the biggest of its kind.  Notable helpers include the Guardianand BBC (England), Le Monde(France), Sonntagszeitung (Switzerland), and Falter(Australia).


With over 11.5 million documents leaked, the Panama Papers leak is larger than the total of the WikiLeaks Cablegate, Offshore Leak, Lux Leak, and Swiss Leak combined. To put the immensity of the leakinto perspective, if the data released by WikiLeaks was equivalent to the population of San Francisco, the data leaked by the Panama Papers would be equivalent to the population of India.


Companies and individuals were both linked to the Panama Papers.


Companies and individualswere both linked to the Panama Papers.  The individuals included 12 current or former heads of state and government, over 60 relatives and associates of heads of states and politicians, and some close associates of Russian president, Vladimir Putin.  Additionally, the brother-in-law of China’s president, Xi Jinping, was mentioned, as well as the deceased father of former UK Prime Minister David Cameron.  Other notable mentions included Argentinian president Mauricio Macri, Ukranian President Petro Poroshenko, and FIFA, the international governing body of football.  The papers also implicated over 500 banks and their subsidiaries.


The documents leaked in the Panama Papers documented how Mossack Fonesca’s business practices aided in money laundering and tax evasion.


Mossack Fonescahas offices all over the world, in cities such as Zurich, London, and Hong Kong.  The company has created, managed, and sold thousands of offshore “shell” companies.  Mossack Fonesca allowed its clients to purchase these companies anonymously and if the client paid the right price, would provide a director and help conceal the company’s true ownership.  The documents leaked in the Panama Papers documented how Mossack Fonesca’s business practices aided in money laundering and tax evasion.  For example,the Panama Papers illustrated how Mossack Fonesca once offered a wealthy American fake ownership records to hide money from US authorities, a clear violation of money laundering and tax evasion laws.


While owning an offshore company is not inherently illegal, much of what has been verified in the Panama Papers is illegal.  The data revealsthat the main objective of the companies was to conceal the identity of the true shareholders.  Additionally, the leaked files expose instances of bribery and corruption of heads of states and government officials.  Further, some of Mossack Fonesca’s clients included Mafia members and criminals.


Prosecutors in the United States have filed the first criminal charges since the publication of the Panama Papers in 2016.


Prosecutors in the United States have filed the first criminal chargessince the publication of the Panama Papers in 2016.  Filed in the Southern District of New York, the 67-page indictmentcharged four individuals on 11 different counts, including conspiracy and lying to investigators.  Of the four individuals named in the indictment, three are under arrest and one is still at large.  These named individuals are Ramses Ownes, Dirk Brauer, Richard Gaffey, and Harald Joachim von der Goltz.


An international effort helpedto arrest three of the four individuals charged.  Ramses Owens is a 50-year-old citizen of Panama and was employed by Mossack Fonesca as an attorney.  Mr. Owens still remains at large.  Additionally, Dirk Brauer is a 54-year-old German citizen who worked at an asset management firm.  Mr. Brauer was arrested in Paris on November 15, 2018.   Richard Gaffey, 74, is a United States accountant who was detained in Massachusetts.  Finally, Harald Joachim von der Goltz, an 81-year-old German citizen, was arrested in London.


According to United States Attorney Geoffrey Berman, these four individuals “went to extraordinary lengths to circumvent US tax laws in order to maintain their wealth and the wealth of their clients.”  Additionally, Berman stated that the four defendants “shuffled millions of dollars through offshore accounts and created shell companies to hide fortunes.”  As alleged, “they had a playbook to repatriate un-taxed money into the US banking system.”


Don Fort, Internal Revenue Service Criminal Investigation Chief, also declared that“more investigations are on the way.”  He and his team are still working diligently to unravel the intricate schemes that were used to move money around the world to hide wealth and avoid taxes.


Speaking to NPRabout the length of time between the leak and the charges, Clark Gascoigne, the deputy director of the Financial Accountability and Corporate Transparency Coalition stated that “complex financial crimes take a long time to investigate and to pull together.”  Gascoigne believes that this case is characteristic and illustrative of that issue.  Furthermore, Gascoigne identified some of the issues with anonymous ownership of companies, stating that “we have gotten to the point where in any state in the US, you can actually form a company without disclosing the true owner of the company. That can facilitate grand corruption, human trafficking, and weapons trafficking.”  In his interview with NPR, Gascoigne also said that he is expecting even more charges to be brought in the US in relation to the Panama Papers.


Inquiries into the complex financial activities exposed by the Panama Papers have led to lengthy, prolonged investigations.


As demonstrated by the statements of Berman, Fort, and Gascoigne, these inquiries into the complex financial activities exposed by the Panama Papers have led to lengthy, prolonged investigations.  Still, we can expect governments around the globe to continue to work diligently in apprehending those involved in the illegalities uncovered in the historic, massive leak.  For example, the Frankfurt headquarters of Deutsche Bank was raidedby prosecutors in connection with the Panama Papers in November.  As investigations continue around the globe, there is no predicting just how far and to whom the Panama Papers will reach.


The International Consortium of Investigative Journalists has created a list of the main figures involved.


Unfortunately, there is currently no searchable archiveof the leaked documents. This is due to several factors, including the massive amount of data and documents, the sensitive personal information involved, and the fact that not everyone involved is suspected of criminal activity.  However, the International Consortium of Investigative Journalists (ICIJ) has created a listof the main figures involved, allowing individuals to search by country.  Additionally, the ICIJ has a sign-up feature that gives readers the option of receiving updates about the Panama Papers and other major leaks.



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About Bryant Pernell (6 Articles)
Bryant Pernell is a third-year law student at Campbell Law School and currently serves as an Associate Editor for the Campbell Law Observer. Originally from Kenbridge, Virginia, Bryant attended the College of Charleston where he received his Bachelor’s degree in Political Science. Before law school, he worked as a real estate agent for Southern Virginia Realty, Inc., and interned at Harris, Mathews, & Crowder, P.C. While at Campbell Law, Bryant has served as Event Coordinator for Delta Theta Phi, a service-based fraternity, and is pursuing an LL.M in Legal Practice through Nottingham Trent University. He is interested in comparative legal studies, constitutional legal issues, and estate planning.
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