Tag Archives: Offshore accounts

Inside the leak that rocked the world: WIRED meets the men behind the Panama Papers

It’s not often a single anonymous message can result in ripples being made around the world’s political and economic elite. The one sent to Bastian Obermayer did.

The message the investigative journalist received was from ‘John Doe’ – the unknown whistleblower responsible for thePanama Papers’ revelations.

Iceland’s prime minister resigned; 800 companies are being investigated in Australia; 64 firms are being grilled in the UK;“Putinphobia” was created; and Obama called for global tax changes.

“At the beginning I didn’t think this was the new big story,” Obermayer, 38, told WIRED. Once the source had made contact and some initial verification documents had been sent, the Süddeutsche Zeitung newspaper journalist met colleague Frederik Obermaier and drank ouzo in a “shabby” Greek restaurant in Munich.

Now, several months after the global story broke and implicated world leaders, the pair has detailed the inside story of its investigation in a new book. A statement inside the book from ‘Doe’ says the 11.5 million documents, totalling 2.6 terabytes of data, were released to stop “massive, pervasive corruption”.

Read on.

Panama Papers probe looks stalled until October

It looks like checks carried out by authorities into possible Cypriot connections to the Panama Papers will be dragging into the autumn.

The House ethics committee, which tabled the issue for discussion – the matter was tabled by Greens MP George Perdikis – heard on Tuesday that state agencies and regulatory authorities will be able to come back with a more detailed picture, but not until October.

MPs heard from the Tax Department that to date it has identified 100 of some 3,600 individuals mentioned in the Panama Papers as being linked in some way or another to Mossack Fonseca, the Panamanian law firm at the centre of the leaks.

The Tax Department said it was having difficulty identifying the remainder of the individuals as some of the names in the leaked list were identical, occurred several times, and lacked an identity card number or phone details.

The Unit for Combating Money Laundering (MOKAS) has been combing through its own records to determine whether there are any individuals or companies linked to the Panama Papers who have come to the unit’s attention in the past.

A memo that MOKAS submitted to the House committee shows that since September 2013, from convictions relating to money-laundering offences, courts have issued 39 confiscation orders for amounts worth some €36 million.

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The Panama Papers reveal a secret McKinsey-linked investment scheme involving major financiers

Fusion:

McKinsey is perhaps the world’s best-known management consulting firm, and a high-powered farm team for America’s corporate elite. It’s also home to a $9.5 billion private hedge fund known as the McKinsey Investment Office. MIO invests in many companies linked to McKinsey, and has an enviable record: It has made money in 24 of the past 25 years, including a 14% return in 2014 alone. That’s much higher than the stock market or the average hedge fund.

McKinsey is willing to admit that MIO exists (it even has a very, very thin website), but they’re not willing to say much more than that. And beyond MIO, in the interstices of decades-old McKinsey friendships, we have no idea at all how many investments McKinsey-connected individuals make in each other’s companies.

Now, thanks to the Panama Papers, we have a tiny sliver of a window into one such scheme. It’s domiciled in a Caribbean tax haven, all but untraceable, and comes complete with a Panamanian lineage and a meaningless name: Brightao.

The Panama Papers, which were obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with Fusion and other media partners, have exposed the offshore holdings of heads of state and criminals, highlighting the potential for corruption, tax evasion, and other illicit activities within this parallel financial universe. The papers also provide a rare window into the wealth, privilege, and opportunity afforded the lucky members of the McKinsey elite, and their friends.

Brightao, founded in 2007, is a shell company in the British Virgin Islands. The founder was Peter Walker, a 43-year veteran of McKinsey and a globally recognized expert in both China and the insurance industry. The company’s founding shareholders include Sandy Weill, the financial services empire-builder who created Citigroup; legendary M&A banker Gary Parr; and various McKinsey ex-colleagues.

Brightao was created in the service of one of Walker’s protégés at McKinsey—a high-flying Chinese technocrat named Heidi Hu. It allowed big-name financiers, including current and former McKinsey employees, to invest in Hu’s nascent yet promising insurance company, even if that may have violated the spirit of McKinsey’s own rules against investing in the same companies it advises.

Panama Papers are available. Why hasn’t U.S. asked to see them?

Panamanian government has received 3 requests from countries, but not U.S.

Little action apparent on Capitol Hill, other than questions from a committee

The Obama administration announced plans in May, but nothing has come of them

Nearly three months after the revelations from the Panama Papers exposed politicians, drug cartels and the wealthy hiding millions behind offshore companies, the U.S. Justice Department has yet to ask its Panamanian counterpart for access to seized records.

The inaction raises questions about the response by Congress and the Obama administration to the unprecedented leak that rocked governments in Iceland, Pakistan and the United Kingdom and prompted investigations worldwide.

“The biggest financial scandal involving offshores is greeted with a yawn by U.S. law enforcement officials?” said Charles Intriago, a former federal prosecutor and money-laundering expert in Miami. “It doesn’t make any sense that a pot of evidentiary gold is going unpursued by the U.S. Department of Justice.”

How an obscure nonprofit in Washington protects tax havens for the rich

In May 2007, during a global crackdown on offshore tax havens, an obscure nonprofit lobbying group in Northern Virginia sent a fundraising pitch to a law firm in one of the biggest tax havens in the world — Panama.

The Center for Freedom and Prosperity promised to persuade Congress, members of the George W. Bush administration and key policymakers to protect the players of the offshore world, where hundreds of thousands of shell companies had been created, often to hide money and evade taxes.

To reach out to American officials and fund its U.S. operations, the center said it needed an infusion of cash for an eight-month campaign: at least $247,000.

“We hope you can support this effort with a donation,” the center wrote in a document sent to Mossack Fonseca, the law firm at the heart of an international financial scandal known as the Panama Papers. The leak of more than 11.5 million documents, which came from inside the Panamanian law firm, has pulled back the curtain in recent months on secretive offshore tax havens and the people who use them to stash their money, including a rogues’ gallery of international criminals, money launderers and drug dealers.

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Report: Panama Papers implicates thousands of Americans

The Panama-based law firm made infamous for the Panama Papers document leak that rocked the globe had created more than 2,800 companies in the British Virgin Islands and elsewhere for more than 2,400 U.S.-based clients, The New York Timesreported Monday.

The April leak of more than 11.5 million financial and legal records and personal documents came from the firm Mossack Fonseca, which helps the world’s rich and powerful protect — or hide — financial assets and dealings.

Many of the transactions unveiled in the leak are legal. The Times, however, reports that “for many of its American clients, Mossack Fonseca offered a how-to guide of sorts on skirting or evading United States tax and financial disclosure laws.”

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Panama Papers Reveal How Wealthy Americans Hid Millions Overseas

Over the years, William R. Ponsoldt had earned tens of millions of dollars building a string of successful companies. He had renovated apartment buildings in the New York City area. Bred Arabian horses. Run a yacht club in the Bahamas, a rock quarry in Michigan, an auto-parts company in Canada, even a multibillion-dollar hedge fund.

Now, as he neared retirement, Mr. Ponsoldt, of Jensen Beach, Fla., had a special request for Mossack Fonseca, a Panama-based law firm well placed in the world of offshore finance: How could he confidentially shift his money into overseas bank accounts and use them to buy real estate and move funds to his children?

“He is the manager of one of the richest hedge funds in the world,” a lawyer at Mossack Fonseca wrote when the firm was introduced to Mr. Ponsoldt in 2004. “Primary objective is to maintain the utmost confidentiality and ideally to open bank accounts without disclosing his name as a private person.”

In summary, the firm explained: “He needs asset protection schemes, which we are trying to sell him.”

Thus began a relationship that would last at least through 2015 as Mossack Fonseca managed eight shell companies and a foundation on the family’s behalf, moving at least $134 million through seven banks in six countries — little of which could be traced directly to Mr. Ponsoldt or his children.

These transactions and others like them for a stable of wealthy clients from the United States are outlined in extraordinary detail in the trove of internal Mossack Fonseca documents known as the Panama Papers. The materials were obtained by the German newspaper Süddeutsche Zeitungand the International Consortium of Investigative Journalists, and have now been shared with The New York Times.

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