US, France to Investigate ‘Panama Papers’ For Evidence of Illegal Actions by Banks

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From The Wall Street Journal:

The U.S. Justice Department said Monday it is reviewing documents published by international media outlets to see if the papers constitute evidence of corruption that could be prosecuted in the U.S.

Also Monday, French prosecutors opened an investigation into whether French nationals or financial institutions have used Panama to evade taxes.

The so-called “Panama Papers” consist of thousands of internal documents from the Panamanian law firm Mossack Fonseca detailing alleged offshore holdings by 140 public figures, executives and celebrities around the world. The reports were published late Sunday.

“We are aware of the reports and are reviewing them,” Justice Department spokesman Peter Carr said. “While we cannot comment on the specifics of these alleged documents, the U.S. Department of Justice takes very seriously all credible allegations of high-level, foreign corruption that might have a link to the United States or the U.S. financial system.”

If the Justice Department were to find evidence of financial crimes linked to those accounts, it could face considerable hurdles in bringing a U.S. prosecution. Chief among these are determining whether any conduct involved American financial institutions, whether the internal records were obtained as a result of criminal behavior, such as computer hacking, and whether the documents are protected by attorney-client privilege.

Thousands of internal documents from the Panamanian law firm Mossack Fonseca detailing alleged offshore holdings by 140 public figures, executives and celebrities around the world

Mossack Fonseca denied any wrongdoing in a statement given to the Guardian, one of the newspapers that ran reports. The firm said it “has operated beyond reproach in our home country and in other jurisdictions where we have operations.”

Offshore accounts can be used for legitimate purposes, including consolidating assets, making foreign investments or planning an estate.

The Justice Department has made a push in recent years to seize assets in the U.S. that prosecutors believe were purchased by officials of foreign governments using corrupt funds. In November, for example, the department returned more than $1.1 million to South Korea after seizing funds linked to California real estate and other investments by the son of a former South Korean president convicted of accepting bribes.

Many of the new Panama documents appeared to show foreign political figures or their relatives holding millions of dollars in real estate in cities including London and Miami, raising questions about the sources of the funds. The papers also showed the Panama firm working with more than two dozen companies that were blacklisted by the U.S., often before the sanctions went into effect.

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