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Abu Dhabi, UAESunday 16 December 2018

US charges four in Panama Papers tax evasion scheme

Move marks the first criminal case in connection with Mossack Fonseca & Co, the law firm at the centre of the leak

The arrests were in connection with the Mossack Fonseca law firm, which has since closed. Reuters
The arrests were in connection with the Mossack Fonseca law firm, which has since closed. Reuters

US prosecutors announced on Tuesday that they had charged four people with taking part in a decades-long scheme to evade taxes that came to light after a massive leak of offshore financial data known as the Panama Papers.

Three of the four people have already been arrested, prosecutors said, in the first criminal case brought by US authorities in connection with Mossack Fonseca & Co, the Panamanian law firm at the centre of the leak.

Harald Joachim von der Goltz, a client of the firm, was arrested in London on Monday. Dirk Brauer, an employee of an asset management company closely tied to the firm, was arrested in Paris on Nov. 15. Richard Gaffey, a US-based accountant, was arrested in Massachusetts on Tuesday, according to prosecutors.

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Panama Papers law firm that exposed offshore rogue finance industry to shut down

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The fourth accused, Ramses Owens, was a lawyer at Mossack Fonseca and remains at large, prosecutors said. The law firm shut down earlier this year.

Bill Lovett, a lawyer for Mr Gaffey, could not immediately be reached for comment. Lawyers for the other three defendants could not immediately be identified.

The most serious charges in the case, which include wire fraud and money laundering conspiracy, carry a maximum sentence of 20 years in prison.

In an indictment unsealed in a Manhattan federal court, prosecutors said that from 2000 to 2017, Mr Owens and Mr Brauer conspired to help clients of Mossack Fonseca conceal assets, investments and income from US tax authorities. This was done using sham foundations and shell companies formed under the law of countries including Panama, Hong Kong and the British Virgin Islands. Mr Owens, 50, is a citizen of Panama and Mr Brauer, 54, is German citizen, prosecutors said.

One of those clients was Mr von Der Goltz, an 81-year-old German national, according to the indictment. Prosecutors said that the pair helped Mr von Der Goltz avoid taxes by creating shell companies and bank accounts that he falsely claimed were solely owned by his elderly mother, a Guatemalan citizen who did not pay US taxes.

Prosecutors also said that Mr Gaffey, a 74-year-old US citizen, helped another unidentified client of Mossack Fonseca conceal offshore bank accounts from US authorities.

The Panama Papers, which consist of millions of documents from Mossack Fonseca, were leaked to the media in April 2016.

A review of the documents also prompted the German authorities to raid the offices of Deutsche Bank AG and its board members as part of a money-laundering investigation last week.