This was not the crime of an actor or two and others doing time or having done time for offshore accounts
An anonymous source, an enormous cache of leaked documents, and a year-long investigative effort by around 400 journalists from more than 100 media organizations in over 80 countries have yielded the Panama Papers, an unprecedented look at how the world's rich and powerful, from political leaders to celebrities to criminals, use tax havens to hide their wealth.
The investigation went live on Sunday afternoon.
German newspaper Süddeutsche Zeitung wrote:
Over a year ago, an anonymous source contacted the Süddeutsche Zeitung (SZ) and submitted encrypted internal documents from Mossack Fonseca, a Panamanian law firm that sells anonymous offshore companies around the world. These shell firms enable their owners to cover up their business dealings, no matter how shady."These findings show how deeply ingrained harmful practices and criminality are in the offshore world," said Gabriel Zucman, an economist at the University of California, Berkeley and author of The Hidden Wealth of Nations: The Scourge of Tax Havens. Zucman, who was briefed on the media partners' investigation, said the release of the leaked documents should prompt governments to seek "concrete sanctions" against jurisdictions and institutions that peddle offshore secrecy.
In the months that followed, the number of documents continued to grow far beyond the original leak. Ultimately, SZ acquired about 2.6 terabytes of data, making the leak the biggest that journalists had ever worked with. The source wanted neither financial compensation nor anything else in return, apart from a few security measures.
The data provides rare insights into a world that can only exist in the shadows. It proves how a global industry led by major banks, legal firms, and asset management companies secretly manages the estates of the world’s rich and famous: from politicians, Fifa officials, fraudsters and drug smugglers, to celebrities and professional athletes.
Fusion dubbed it "the WikiLeaks of the mega-rich."
In a statement on Sunday, international anti-corruption organization Global Witness said the exposé had "once again shown the insidious role that tax havens, corporate secrecy and shell companies play in aiding widespread crime, corruption, and violence. These threaten the safety, security and well-being of people around the world."
The group pointed out that "despite stereotypes portraying the problem of tax havens and shell companies as an 'offshore' problem, this is a big and homegrown issue in the U.S. as well." To that end, Global Witness will join faith leaders, small business owners, voices from law enforcement, and other community activists from over 25 states in Washington, D.C. from April 11-13 to call on Congress to pass legislation that would end anonymous companies.
And from Josh Feldman In what’s being called the biggest data leak of all time, a number of news organizations went public today with revelations of the “Panama Papers”––exposing tax havens used and money laundering engaged in by world leaders and other members of the global elite, and how the law firm involved has helped move the money.A grand total of 2.6 terabytes of data from the offshore law firm Mossack Fonseca was sent to journalists all over the world. Over 11 million files were leaked.
According to The Guardian, world leaders with significant offshore wealth are the prime minister of Iceland, the prime minister of Pakistan, the former vice president of Iraq, the current president of Ukraine, and Vladimir Putin.
And not only is Putin linked to $2 billion offshore, but people close to him have been reportedly involved in a money laundering ring.
There is a gigantic database here with primers on each and every individual in a position of power who has been linked to this massive corruption revelation, including the families of the leaders of Azerbaijan, Syria, Pakistan, Egypt, Morocco, Spain, etc.Oh, and if that wasn’t enough for a corruption scandal for you, FIFA’s involved.
One journalist described Mossack Fonseca’s services thusly:
This is always a really good opportunity to launder money. This is, they are doing really huge transactions from one country to another and they are hiding it and masking it in a way, so you really can’t follow the money.ON OFFSHORE ACCOUNTS BEING QUESTIONED
IT IS not certain if or to what extent investors have been bilked, or who has done the bilking. Indeed, it is hard to establish very much at all, given the complexity of the case: authorities in the Cayman Islands, Guernsey and Mauritius are all looking into it and a South African financial regulator is following it closely. Investigations are focused on various entities connected to Belvedere Management, a Mauritius-based group that claims to administer around 100 hedge funds and run several finance-related companies. David Marchant, editor of OffshoreAlert, a newsletter on financial crime, has identified numerous red flags in some of these funds, including several years of consistent, positive monthly returns, which can be a sign of a Ponzi scheme.
Belvedere’s bosses, Cobus Kellerman and David Cosgrove, deny all of the allegations of wrongdoing and criminal activity. Instead, Belvedere has told worried investors that Grant Thornton, an accounting firm, has been called in to wade through the complexities of the funds and “review your assets and to advise us and assist the relevant authorities”.
In the past, Belvedere has claimed to manage or advise on $16 billion in investments, for both institutional and retail customers. One of its clients, an international financial-consulting group in South Africa called deVere, claims to be a victim of wrongdoing and says it has provided evidence of it to local authorities. (Many of Belvedere’s retail investors are also believed to be South African.)
Last month the offices of Capital World Markets (CWM), a financial-services provider, were raided by the City of London police, with 13 arrests made on suspicion of fraud by false representation, conspiracy to defraud and money-laundering. Maria Woodall, the lead detective, said the arrests were meant to “stop what we believe was ongoing criminality” and asked investors, apparently lured by the promise of monthly returns of 5%, to come forward.
CWM strongly denies the police’s allegation that it is connected to fraud. Yet some claim the raid is tied to events at Belvedere because the two groups are linked. On a now-deleted part of its website, CWM stated it is part of the same group as Belvedere. Belvedere, however, says it merely provided services to CWM and that whatever allegations there may be against CWM have no bearing on Belvedere.
Whatever the outcome of the investigations into Belvedere and CWM, the affair raises awkward questions over the role of professional-services firms that advise and check the books of offshore financial groups. The long list of lawyers, auditors and fund administrators that have worked with or been engaged by Belvedere’s funds includes blue-chip names such as BDO and EY. In a statement deVere says it is deeply concerned that alarm bells were not rung until now and that worrying signs appear to have been “ignored by professional service providers trusted by deVere and other brokerages”. Auditors will certainly be in an awkward position (and could be open to lawsuits) if it turns out they signed off on a Ponzi scheme, says Jason Sharman of Griffith University in Australia.
In the coming months, as the shape of the affair becomes clearer, questions will also arise about how good a grip regulators have on money channelled through tax havens. Earlier this year Mauritius suffered another possible scandal involving Bramer Banking Corporation Ltd (BBCL), whose licence was revoked earlier this month “following strong evidence that BBCL is engaged in a Ponzi scheme which exceeds 25 billion rupees [$690m]”, according to the country’s prime minister. Partly under commercial pressure due to increased regulation and competition, offshore financial centres have begun to offer more complex funds and collective-investment schemes. These require more skill to regulate than the simpler trusts that have been their bread and butter. Mr Sharman, who studies offshore centres, says it is inevitable that, as they venture into more complex finance, they will become more vulnerable to scams.
