Four men connected to the Panama Papers investigation have been indicted for their roles in allegedly defrauding the US government through international money laundering and wire fraud associated with Panamanian law firm Mossack Fonseca, the Justice Department announced Tuesday.
The Panama Papers, revealed in April 2016, consisted of more than 11 million documents connecting Mossack Fonseca with a far-reaching network of international influence. The firm allegedly opened covert shell companies and offshore accounts to protect the fortunes of high rollers worldwide — associates of Russian President Vladimir Putin, leaders from FIFA and men whom the United States has indicted for corruption have all been traced back to the papers. The papers implicated 12 current or former world leaders at the time, as well as 128 other politicians and public officials.
The four men were charged in an 11-count indictment Tuesday, and three had been arrested as of Tuesday afternoon. The Justice Department said German citizens Dirk Brauer and 81-year-old Harald Joachim Von Der Goltz, as well as US citizen Richard Gaffey, have been arrested over the past three weeks. Panamanian citizen Ramses Owens is still at large.
The identities of the lawyers representing the four indicted men were not immediately clear Tuesday evening. Reports from earlier this year indicate Mossack Fonesca announced it would close in March 2018. The email address listed on the firm’s Facebook page is no longer active.
According to the indictment, Owens and Brauer opened offshore trusts and undeclared bank accounts in Panama, Hong Kong and the British Virgin Islands — countries with stringent bank privacy regulations — for American clients of Mossack Fonseca. They then conspired to hide the assets, investments, subsequently generated income and the clients’ ownership of said accounts from the IRS.
Client names often did not appear on any of the related paperwork, but the clients were determined to have owned and had full access to the accounts, the Justice Department alleged. The two associates managed the accounts’ “corporate meeting minutes, resolutions, mail forwarding, and signature services” — essentially fabricating a paper trail to legitimize the companies, according to the Justice Department press release.
Owens and Brauer also allegedly showed their clients how to use debit cards and fake purchases to repatriate funds to the US without revealing the secret accounts.
Von Der Goltz, a former US resident and taxpayer, was allegedly a Mossack Fonseca client who concealed tens of millions of dollars by setting up shell companies and bank accounts with Owens and Gaffey, a US-based accountant, according to the indictment. The 81-year-old failed to file a Report of Foreign Bank and Financial Accounts, which is required of residents with foreign financial interest of over $10,000.
The trio also allegedly lied that Von Der Goltz’s elderly mother owned the fake accounts, because she was a Guatemalan citizen and resident and thus not a US taxpayer, like Von Der Goltz.
Gaffey also worked with Owens to help another, unnamed client deceive the IRS by establishing offshore accounts to hold about $4 million.
