Accountant pleads guilty in DOJ Panama Papers probe

On Friday, the Department of Justice announced Richard Gaffey pleaded guilty to wire and tax fraud, money laundering, aggravated identity theft, and other charges. U.S. prosecutors first unsealed the indictment in December 2018 against Gaffey and three others: 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; and German citizen Harald Joachim von der Goltz, allegedly one of Mossack Fonseca’s U.S. taxpayer clients.

“Richard Gaffey went to extraordinary lengths to circumvent U.S. tax laws in order to maintain Harald Joachim von der Goltz’s wealth and hide it from the IRS,” said U.S. Attorney Geoffrey Berman of the Southern District of New York in a news release. “Using the specialized criminal services of global law firm Mossack Fonseca, Gaffey assisted others in violating U.S. tax laws for decades.”

According to the allegations, since at least 2000 through 2018, “Gaffey conspired with others to defraud the United States by concealing his clients’ assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means,” the Justice Department stated. Gaffey helped U.S. taxpayers evade their tax reporting obligations in a variety of ways, “including by hiding the beneficial ownership of his clients’ offshore shell companies and by setting up bank accounts for those shell companies. These shell companies and bank accounts made and held investments totaling tens of millions of dollars.”

From 2000 until 2017, co-defendant von der Goltz was a U.S. resident subject to U.S. tax laws. To conceal his assets and income from the IRS, Gaffey, as the U.S. accountant for von der Goltz, “falsely claimed that von der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident and, unlike von der Goltz, was not a U.S. taxpayer,” the Justice Department stated. “In support of this fraudulent scheme, Gaffey submitted the name, date of birth, government passport number, address, and other means of identification of von der Goltz’s elderly mother to a U.S. bank in Manhattan.”

Gaffey’s sentencing will be held June 29. Von der Goltz, who pleaded guilty on Feb. 18, is scheduled to be sentenced June 24.