U.S. prosecutors this week unsealed an indictment revealing criminal charges brought against four individuals for their alleged roles in a decades-long criminal scheme perpetrated by Panama-headquartered law firm Mossack Fonseca and related entities, the first charges brought in the United States connected to the Panama Papers leak.
Unsealed Dec. 4 in the Southern District of New York, the indictment describes charges of wire fraud, tax fraud, money-laundering, and other offenses. “For decades, the defendants, employees, and a client of global law firm Mossack Fonseca allegedly shuffled millions of dollars through offshore accounts and created shell companies to hide fortunes,” said Manhattan U.S. Attorney Geoffrey Berman. “In fact, as alleged, they had a playbook to repatriate un-taxed money into the U.S. banking system.”
The individuals charged in the 11-count indictment are:
- Panamanian citizen Ramses Owens, who worked for Mossack Fonseca;
- German citizen Dirk Brauer, an investment manager for Mossfon Asset Management, an asset management company closely affiliated with Mossack Fonseca;
- U.S. citizen Richard Gaffey, a U.S.-based accountant; and
- German citizen Harald Joachim Von Der Goltz, allegedly one of Mossack Fonseca’s U.S. taxpayer clients.
According to the Department of Justice, three of the four defendants named in the indictment—Brauer, Gaffey, and Von Der Goltz—have been arrested. Owens remain at large.
According to the indictment, “from at least in or about 2000 through in or about 2017, Owens and Brauer conspired with others to help U.S. taxpayer clients of Mossack Fonseca conceal assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means.”
To conceal their clients’ assets and income from the IRS, Owens and Brauer allegedly worked to establish and manage opaque offshore trusts and undeclared bank accounts on behalf of U.S. taxpayers who were clients of Mossack Fonseca. “Owens and Brauer allegedly marketed, created, and serviced sham foundations and shell companies formed under the laws of countries such as Panama, Hong Kong, and the British Virgin Islands, to conceal from the IRS and others the ownership by U.S. taxpayers of accounts established at overseas banks, as well as the income generated in those accounts,” the Justice Department stated.
As structured by Mossack Fonseca, the sham foundations typically “owned” the shell companies that nominally held the undeclared assets on behalf of the U.S. taxpayer clients of Mossack Fonseca. The names of Mossack Fonseca’s clients generally did not appear anywhere on the incorporation paperwork for the sham foundations or related shell companies, although the clients in fact beneficially owned, and had complete access to, the assets of those sham entities and accounts.
In furtherance of the scheme, and in exchange for additional fees, Owens and Brauer allegedly 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. Moreover, Owens and Brauer are alleged to have purposefully established the bank accounts in locations with strict bank secrecy laws, which impeded the ability of the United States to obtain bank records for the accounts.
Owens and Brauer also allegedly instructed Mossack Fonseca’s U.S. taxpayer clients on how to repatriate funds to the United States from their offshore bank accounts in a manner designed to keep the undeclared bank accounts concealed. Owens and Brauer instructed clients, for example, to use debit cards and fictitious sales to repatriate their funds covertly, the indictment alleges.
Von Der Goltz was allegedly one of Mossack Fonseca’s U.S. taxpayer clients. He is alleged to have evaded his tax reporting obligations by setting up a series of shell companies and bank accounts and hiding his beneficial ownership of the shell companies and bank accounts from the IRS. These shell companies and bank accounts allegedly made investments totaling tens of millions of dollars. According to the indictment, Owens and Gaffey assisted Von Der Goltz in this scheme.