Panama Papers: Mossack Fonseca employees indicted by US authorities

Four men have been indicted in connection with their roles in a decades-long criminal scheme perpetrated by Mossack Fonseca, the company at the centre of the Panama Papers, according to the US Department of Justice.

Three of the men have been arrested, one is still at large, the US Department of Justice said. Mossack Fonseca was the Panama-based law firm subjected to a massive leak in 2016 known as the Panama Papers that lifted the lid on its alleged criminal activities, following which it was shut down, with many of its former employees arrested or wanted.

The chief of the IRS’ investigative office in the US, Don Fort, said the indictment sent a clear message that the IRS is seriously engaged in ensuring tax enforcement, unravelling intricate offshore tax schemes designed to avoid paying taxes due.

“Cases like this help maintain the public’s confidence in our tax system by letting them know that we investigate and prosecute those who evade their tax obligation,” he added.

In Malta, no such reassurance has been made. Malta is the only European country that boasts of a minister mentioned in the Panama papers. The Maltese Prime Minister’s chief of staff was also mentioned. They both remain in office.

Two of the men arrested by US authorities worked with Mossack Fonseca, establishing and managing opaque offshore trusts and undeclared bank accounts using sham foundations and shell companies in countries such as Panama, Hong Kong and the British Virgin Islands, ensuring that their clients’ name did not appear and that the funds could not be traced to their real owner.

The US Department of Justice noted that they also “provided support to clients who had purchased the sham foundations and related shell companies by providing corporate meeting minutes, resolutions, mail forwarding, and signature services”, essentially fabricating a paper trail to avoid detection by law enforcement and tax authorities.

Fake signatures were at the centre of the controversy of the Egrant inquiry, which remains unpublished.