Law firm partners arrested in connection to Panama Papers scandal

Former Panamanian President Ricardo Martinelli and his family are also under investigation by authorities in Panama.

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Shortly after Panamanian law enforcement raided the offices of the law firm, Mossack Fonseca, partners Ramon Fonseca Mora and Jurgen Mossack were arrested Thursday for allegedly participating in the Panama Papers scandal and other suspected corruption schemes throughout the world. According to Panama’s attorney general, Fonseca and Mossack used their law firm as a “criminal organization” to conceal financial assets offshore while destroying evidence of illicit activity.

In April 2016, Iceland Prime Minister Sigmundur David Gunnlaugsson and Gonzalo Delaveau, the president of Transparency International in Chile, both immediately resigned from their positions after being named in the 11.5 million leaked documents known as the Panama Papers that listed the financial details of more than 200,000 offshore accounts created by Mossack Fonseca. Other prominent figures named in the Panama Papers include the father of former U.K. Prime Minister David Cameron, several friends of Russian President Vladimir Putin, the family of Chinese President Xi Jinping, cousins of Syrian President Bashar al-Assad, the family of Pakistan Prime Minister Nawaz Sharif, the King of Saudi Arabia, Ukrainian President Petro Poroshenko, and Argentine President Mauricio Macri.

In a statement published in May 2016, the Panama Papers whistleblower known as “John Doe” cited income inequality as a prominent motivation for revealing the hundreds of thousands of secret offshore tax havens used by Mossack Fonseca clients, including celebrities, world leaders, and large corporations. Despite the fact that these offshore companies are legal to operate, John Doe accused the clients of committing tax evasion crimes while alleging that his employer and coworkers have repeatedly broken the law.

“The prevailing media narrative thus far has focused on the scandal of what is legal and allowed in this system,” John Doe wrote. “What is allowed is indeed scandalous and must be changed. But we must not lose sight of another important fact: the law firm, its founders, and employees actually did knowingly violate myriad laws worldwide, repeatedly. Publicly they plead ignorance, but the documents show detailed knowledge and deliberate wrongdoing. At the very least we already know that Mossack personally perjured himself before a federal court in Nevada, and we also know that his information technology staff attempted to cover up the underlying lies. They should all be prosecuted accordingly with no special treatment.”

During a recent press conference, Panama’s chief prosecutor Kenia Procell announced she had information identifying the law firm “allegedly as a criminal organization that is dedicated to hiding money assets from suspicious origins.” Procell also stated, “Put simply, the money comes from bribes, circulated via certain corporate entities to return bleached or washed to Panama.”

On Thursday, Fonseca accused Panamanian President Juan Carlos Varela of soliciting money from Odebrecht, a global construction conglomerate based in Brazil. In December, Odebrecht and Braskem, a Brazilian petrochemical company, pleaded guilty in U.S. federal court to violating anti-bribery laws and agreed to pay $3.5 billion in penalties.

“These resolutions are the result of an extraordinary multinational effort to identify, investigate and prosecute a highly complex and long-lasting corruption scheme that resulted in the payment by the defendant companies of close to a billion dollars in bribes to officials at all levels of government in many countries,” stated U.S. Attorney Robert Capers. “In an attempt to conceal their crimes, the defendants used the global financial system – including the banking system in the United States – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies. The message sent by this prosecution is that the United States, working with its law enforcement partners abroad, will not hesitate to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of the legitimate functions of government, no matter how sophisticated the scheme.”

President Varela denied Fonseca’s allegation, asserting that his campaign never accepted any contributions from Odebrecht. Fonseca had served as an advisor to Varela but was dismissed last April when the Panama Papers scandal broke.

Former Panamanian President Ricardo Martinelli and his family are also under investigation by authorities in Panama. Besides his possible involvement in the Panama Papers scandal, Martinelli was also accused of using public money to illegally spy on more than 150 people.

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