Jerusalem, Israel — April 29, 2016 … Security analysts in Israel have
long believed that Donald Trump’s candidacy was not real. It was
started and restarted in recent years. Perhaps an excellent marketing
campaign to brand his real estate properties. But as Trump now allocates
more of his own money (actually not his, but being loaned to Trump with
online donations) his demeanor as an aggressive, serious candidate is
now transparent. But his lack of seriousness in addressing both domestic
and foreign issues is anything but serious.
“Most alarming is Trump’s new campaign slogan – “America First”, says
an Israel security and defense analyst who has worked with the Israel
Ministry of Defense.
“The slogan ‘America First’ was first created and used to support
Nazi Germany and to keep the US out of War World 2. ‘America First’ is
not about placing America First but rather the continuing and
destructive Obama, Clinton concept of isolation – not actively engaging
America’s enemies. This has a direct and negative effect on Israel with
Trump having said that he is neutral on Palestinian terrorism, that
Israel was not committed to peace and that only after heavy criticism
and desperation to secure votes, Trump agreed to move the US Embassy to
Jerusalem.”
“Trump stated that he will negotiate a deal with the Palestinians.
Sounds great if you are talking at a 5th grade school level. Reality
asks who will Trump negotiate with? Hamas, Islamic Jihad, Hezbollah,
Fatah or ISIS? None of these terror groups agree on anything except for
the destruction of the Jewish state,” says the veteran security
professional.
“Who will Trump negotiate with as his proposed ban on Muslims to the
US now has him banned from every Arab and Muslim nation? How can we form
an international Islamic and Arab alliance against ISIS as Trump bashes
Muslims?”
As a result of Trump’s proposed ban, Prime Minister Netanyahu
suggested to Trump to cancel his visit to Israel last December. No one
wanted to see mass demonstrations at Ben-Gurion Airport or at the Prime
Minister’s Office. Every political party in Israel agreed that it would
be destructive to have Trump in Israel. No one wanted to be photographed
shaking the hand of a racist. Trump stated that the ban would
be temporary until “we find out what’s going on.”
What Trump does not understand or does not want to understand in
order to secure votes from scare tactics is that the CIA, NSA, military
intelligence and the FBI know exactly what is going on. They have done
an excellent job in securing the US. No one, including the Israelis, can
ever prevent terrorism by 100 percent, but we are doing an effective
job.
But it’s not just Israel which Trump threatens.
Trump wants to dismantle NATO and is asking European states to pay
their share for membership. What Trump does not realize is that security
comes first and payment comes second. Many European nations such as the
Ukraine need American support today without financial conditions that
they cannot meet. Trump attacks China with regard to foreign trade as he
outsources the manufacture of his line of ties and shirts to China. If
China was to forgo and or limit trade with the US it would have a
devastating effect on China and the US economy. Trump doesn’t mention
this. This is not placing America First.”
Foreign policy experts might also find severe fault in some of the
internal contradictions in Trump’s speech: he’s against stabilizing
countries but in favor of world stability, he wants to save money but to
spend without limit on the military, he wants to return the US to its
supposed previous status as a strong and reliable ally but claims that
the most important thing is that America remain “unpredictable.” He
forgets that if Washington turns unpredictable, others will follow in
its wake and the most likely outcome will be chaos.
Nuclear chaos.
While most foreign governments were careful not to comment publicly
on a speech by a US presidential candidate, Germany’s foreign minister
veered from protocol to express deep concern at Trump’s wording.
“I can only hope that the election campaign in the USA does not lack the perception of reality,” Frank-Walter Steinmeier said.
“The world’s security architecture has changed and it is no longer
based on two pillars alone. It cannot be conducted unilaterally,” he
said of foreign policy in a post-Cold War world. “No American president
can get round this change in the international security architecture….
‘America first’ is actually no answer to that.”
Carl Bildt, a former Swedish prime minister and foreign minister who
served as UN envoy to the Balkans in the aftermath of the Yugoslav wars
of the 1990s, said he heard Trump’s speech as “abandoning both
democratic allies and democratic values”.
“Trump had not a word against Russian aggression in Ukraine, but
plenty against past U.S. support for democracy in Egypt,” Bildt said on
Twitter, referring to lines from Trump’s speech that criticized the
Barack Obama administration for withdrawing support for autocrat Hosni
Mubarak during a 2011 uprising.
The US can only assist Israel and her allies if she remains strong, focused and consistent.
It is doubtful that under Trump’s watch we will ever see anything
consistent. Trump, who has no experience in the military or global
public affairs, would be forced to rely on advisers. Problem is, at the
age of 69 and a highly sheltered life, Trump has not and will not
consult with others. If he does, Trump would then be forced to make the
final decision.
If Trump does not know the basic elements of the US Constitution how
is he expected to understand complicated, external threats by Russia,
Iran, North Korea, ISIS, Hamas and China?
Saturday, April 30, 2016
Wednesday, April 27, 2016
Pennsylvania Man Charged In Alleged $35 Million Fraud Against Veterans’ Education GI Bill
NEWARK, N.J. – A Harrisburg, Pennsylvania, man will appear in federal court
today to face charges that he conspired to defraud millions from the
Post 9/11 GI Bill, a federal education benefits program designed to help
veterans who served in the armed forces following the terrorist attacks
on Sept. 11, 2001, U.S. Attorney Paul J. Fishman announced.
David Alvey, 49, is charged by complaint with one count of conspiracy to commit wire fraud. Special agents with the U.S. Department of Veterans Affairs, Office of Inspector General, the FBI, and the U.S. Department of Education, Office of Inspector General, arrested Alvey this morning in Maryland. He will appear this afternoon before U.S. Magistrate Judge Stephanie A. Gallagher in Maryland federal court.
“The Post 9/11 GI Bill was designed to provide educational opportunities to a generation of men and women who served in the U.S. Armed Forces following the attacks on 9/11,” U.S. Attorney Fishman said. “Alvey and others allegedly sought to pillage those well-earned benefits as part of a complex $35 million scam that targeted veterans and enrolled them in unapproved online courses without their knowledge. Rooting out fraud against the government is always a priority of this office, especially when the conduct exploits those who serve our country with such courage.”
“The allegations of fraud committed by David Alvey are extremely serious because not only did his scheme potentially harm the Department of Veterans Affairs, it also victimized our nations deserving veterans and their families,” Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General’s Northeast Field Office, said. “The VA’s education benefit program is meant to help our veterans who have selflessly made great sacrifices for our country and now are in need of VA assistance. Any fraud against this program directly impacts our nation’s heroes.”
According to the complaint unsealed today:
From November 2009 through August 2013, Alvey and others engaged in a conspiracy to defraud the United States by obtaining tuition assistance and other education-related benefits under the Post 9/11 Education Assistance Act, more commonly known as the Post 9/11 GI Bill.
The Post 9/11 GI Bill provides educational assistance to eligible veterans of the United States Armed Forces by paying for veterans’ tuition, housing costs, and other educational costs and fees as long as the courses of study meet certain criteria. Due to the fact that the tuition benefits under the Post 9/11 GI Bill are paid by the United States directly to the school, all entities involved in developing and administering the courses must be fully disclosed to the United States in order for the government to properly assess the courses for approval.
Over the course of the conspiracy, Alvey, operating largely through his own company, ED4MIL LLC (“ED4MIL”), partnered with a New Jersey university (the “University”), to obtain approval from the United States to receive tuition and other education benefits under the Post 9/11 GI Bill for several online non-credit training and certification courses. These courses were purportedly developed, taught, and administered by the faculty of the University, but were, in fact, actually developed, taught, and administered by undisclosed and unapproved sub-contractors of ED4MIL, including an online correspondence school located in Pennsylvania.
Alvey and others at ED4MIL developed marketing materials and a script to be used by ED4MIL salespersons at various military bases around the United States in order to market to and enroll thousands of veterans in the courses. These “field representatives” employed by ED4MIL traveled across the United States pitching the fraudulent courses to veterans using the marketing materials and script developed by Alvey and others at ED4MIL. Field representatives were instructed to identify themselves to veterans as employees of the University, and were specifically told not to mention ED4MIL or the online correspondence school in which the veterans were actually enrolled. The marketing materials were emblazoned with the University’s insignia, and the field representatives wore t-shirts and handed out pens bearing the University’s name. The field representatives, and several other employees at ED4MIL, were also given University email addresses with which to communicate with the veterans.
Alvey and others then nominally enrolled the veterans in the University while simultaneously enrolling them in the unapproved online correspondence courses. Due to the fact that Alvey and others concealed the true source of the courses and the contract relationships between the University and ED4MIL, the veterans were unaware that the courses they were taking were actually being taught and administered by the online correspondence school.
Even though the University contributed no content or value to the courses whatsoever, the University charged the Post 9/11 GI Bill between ten and thirty times the prices charged by the online correspondence school for the same courses. While most courses at the correspondence school cost between approximately $600 and $1,000 in tuition, the University charged between approximately $5,000 and $26,000 per course. Over the course of the conspiracy, Alvey and others caused the United States to pay out over approximately $35 million in total benefits.
“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” said Special Agent in Charge Timothy Gallagher. “Our job is to protect victims, especially our veterans who are on the front lines keeping our country safe, and these charges reflect our commitment to that goal.”
“Scams like this steal money from hardworking taxpayers and legitimate students – and in this case, our veterans – and that is completely unacceptable," Brian Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General's Northeastern Regional Office, said. "OIG is committed to fighting student financial aid fraud and we will continue to aggressively pursue those that participate in these types of crimes."
The wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office, under the direction of Special Agent in Charge Jeffrey G. Hughes in Newark; the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney David M. Eskew of the Economic Crimes Unit, Assistant U.S. Attorneys Jane Yoon and Lucy Muzzy of the Health Care and Government Fraud Unit, and Assistant U.S. Attorney Jafer Aftab of the Asset Forfeiture and Money Laundering Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense Counsel: Judith Germano Esq., Montclair
David Alvey, 49, is charged by complaint with one count of conspiracy to commit wire fraud. Special agents with the U.S. Department of Veterans Affairs, Office of Inspector General, the FBI, and the U.S. Department of Education, Office of Inspector General, arrested Alvey this morning in Maryland. He will appear this afternoon before U.S. Magistrate Judge Stephanie A. Gallagher in Maryland federal court.
“The Post 9/11 GI Bill was designed to provide educational opportunities to a generation of men and women who served in the U.S. Armed Forces following the attacks on 9/11,” U.S. Attorney Fishman said. “Alvey and others allegedly sought to pillage those well-earned benefits as part of a complex $35 million scam that targeted veterans and enrolled them in unapproved online courses without their knowledge. Rooting out fraud against the government is always a priority of this office, especially when the conduct exploits those who serve our country with such courage.”
“The allegations of fraud committed by David Alvey are extremely serious because not only did his scheme potentially harm the Department of Veterans Affairs, it also victimized our nations deserving veterans and their families,” Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General’s Northeast Field Office, said. “The VA’s education benefit program is meant to help our veterans who have selflessly made great sacrifices for our country and now are in need of VA assistance. Any fraud against this program directly impacts our nation’s heroes.”
According to the complaint unsealed today:
From November 2009 through August 2013, Alvey and others engaged in a conspiracy to defraud the United States by obtaining tuition assistance and other education-related benefits under the Post 9/11 Education Assistance Act, more commonly known as the Post 9/11 GI Bill.
The Post 9/11 GI Bill provides educational assistance to eligible veterans of the United States Armed Forces by paying for veterans’ tuition, housing costs, and other educational costs and fees as long as the courses of study meet certain criteria. Due to the fact that the tuition benefits under the Post 9/11 GI Bill are paid by the United States directly to the school, all entities involved in developing and administering the courses must be fully disclosed to the United States in order for the government to properly assess the courses for approval.
Over the course of the conspiracy, Alvey, operating largely through his own company, ED4MIL LLC (“ED4MIL”), partnered with a New Jersey university (the “University”), to obtain approval from the United States to receive tuition and other education benefits under the Post 9/11 GI Bill for several online non-credit training and certification courses. These courses were purportedly developed, taught, and administered by the faculty of the University, but were, in fact, actually developed, taught, and administered by undisclosed and unapproved sub-contractors of ED4MIL, including an online correspondence school located in Pennsylvania.
Alvey and others at ED4MIL developed marketing materials and a script to be used by ED4MIL salespersons at various military bases around the United States in order to market to and enroll thousands of veterans in the courses. These “field representatives” employed by ED4MIL traveled across the United States pitching the fraudulent courses to veterans using the marketing materials and script developed by Alvey and others at ED4MIL. Field representatives were instructed to identify themselves to veterans as employees of the University, and were specifically told not to mention ED4MIL or the online correspondence school in which the veterans were actually enrolled. The marketing materials were emblazoned with the University’s insignia, and the field representatives wore t-shirts and handed out pens bearing the University’s name. The field representatives, and several other employees at ED4MIL, were also given University email addresses with which to communicate with the veterans.
Alvey and others then nominally enrolled the veterans in the University while simultaneously enrolling them in the unapproved online correspondence courses. Due to the fact that Alvey and others concealed the true source of the courses and the contract relationships between the University and ED4MIL, the veterans were unaware that the courses they were taking were actually being taught and administered by the online correspondence school.
Even though the University contributed no content or value to the courses whatsoever, the University charged the Post 9/11 GI Bill between ten and thirty times the prices charged by the online correspondence school for the same courses. While most courses at the correspondence school cost between approximately $600 and $1,000 in tuition, the University charged between approximately $5,000 and $26,000 per course. Over the course of the conspiracy, Alvey and others caused the United States to pay out over approximately $35 million in total benefits.
“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” said Special Agent in Charge Timothy Gallagher. “Our job is to protect victims, especially our veterans who are on the front lines keeping our country safe, and these charges reflect our commitment to that goal.”
“Scams like this steal money from hardworking taxpayers and legitimate students – and in this case, our veterans – and that is completely unacceptable," Brian Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General's Northeastern Regional Office, said. "OIG is committed to fighting student financial aid fraud and we will continue to aggressively pursue those that participate in these types of crimes."
The wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office, under the direction of Special Agent in Charge Jeffrey G. Hughes in Newark; the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney David M. Eskew of the Economic Crimes Unit, Assistant U.S. Attorneys Jane Yoon and Lucy Muzzy of the Health Care and Government Fraud Unit, and Assistant U.S. Attorney Jafer Aftab of the Asset Forfeiture and Money Laundering Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense Counsel: Judith Germano Esq., Montclair
Thursday, April 21, 2016
47 Despicable Senate Republicans Vote To Deny Aid To Flint’s Lead Poisoned Children
By Jason Easley
Senate Republicans forced a vote on an amendment today that would have denied federal aid to the poisoned children of Flint, Michigan. What is even more deplorable is that 47 Senate Republicans voted not help lead poisoned children.
Senate Republicans forced a vote on an amendment today that would have denied federal aid to the poisoned children of Flint, Michigan. What is even more deplorable is that 47 Senate Republicans voted not help lead poisoned children.
The Coates Amendment to the Energy and Water Agencies Appropriations Act failed by a vote of 48-49. All Senate Democrats, with the exception of Sen. Claire McCaskill (MO) voted against the amendment. Five Republicans Sens. Lisa Murkowski (AK), Bill Cassidy (LA), Rob Portman (OH), Lamar Alexander (TN) and Dean Heller (NV) joined with Democrats in voting against the amendment, but 47 Senate Republicans voted not to provide federal aid for children that were poisoned by the decisions of Michigan’s Republican governor.
Senate Democratic Leader Harry Reid blistered Republicans for their vote:
Democrats should keep the actions of Senate Majority Leader Mitch McConnell (R-KY) and the 46 Republicans who voted for this amendment in mind the next time one of these Republicans demands federal aid after a flood, fire, or hurricane.
Senate Republicans have prioritized the Kochs over kids, which is why they should not be trusted with power in the United States Senate.
Senate Republicans forced a vote on an amendment today that would have denied federal aid to the poisoned children of Flint, Michigan. What is even more deplorable is that 47 Senate Republicans voted not help lead poisoned children.
Senate Republicans forced a vote on an amendment today that would have denied federal aid to the poisoned children of Flint, Michigan. What is even more deplorable is that 47 Senate Republicans voted not help lead poisoned children.
The Coates Amendment to the Energy and Water Agencies Appropriations Act failed by a vote of 48-49. All Senate Democrats, with the exception of Sen. Claire McCaskill (MO) voted against the amendment. Five Republicans Sens. Lisa Murkowski (AK), Bill Cassidy (LA), Rob Portman (OH), Lamar Alexander (TN) and Dean Heller (NV) joined with Democrats in voting against the amendment, but 47 Senate Republicans voted not to provide federal aid for children that were poisoned by the decisions of Michigan’s Republican governor.
Senate Democratic Leader Harry Reid blistered Republicans for their vote:
Three of the four Republican cosponsors of legislation to help the people of Flint voted to eliminate the funding source today. It is a disturbing trend that Senate Republicans are regularly unable to fulfill their commitments. The Senate cannot function if senators do not keep their word.The 47 Senate Republicans who voted for this amendment displayed a basic contempt for the American people that is proof of why Republicans should be voted out of the majority in November. It doesn’t get any lower than voting against helping poisoned children.
Republicans have proven once again that they are willing to turn their backs on the people of Flint. Every time the Senate comes close to a bipartisan compromise to help children suffering from lead poisoning, Republicans find an excuse to back away. Today, Republicans voted to remove a funding source for legislation to tackle Flint’s water crisis without offering a single dime to clean their poisoned water. More than 100,000 people – including 9,000 children under the age of six – have been poisoned in the city of Flint, and it is unconscionable that Republicans would attempt to deny them the support they desperately need.
Sadly, Republicans are happy to attack clean energy programs to please the Koch brothers, but they remain unwilling to lift a finger to help the people of Flint. I call on Republicans to end this unwarranted obstruction and protect the people of Flint and millions throughout the nation.
Democrats should keep the actions of Senate Majority Leader Mitch McConnell (R-KY) and the 46 Republicans who voted for this amendment in mind the next time one of these Republicans demands federal aid after a flood, fire, or hurricane.
Senate Republicans have prioritized the Kochs over kids, which is why they should not be trusted with power in the United States Senate.
Bundy militants harassed locals for weeks ahead of standoff: ‘They’re not patriots — they’re thugs’
RAW STORY
Anti-government extremists are awaiting trial for their armed takeover of an Oregon nature preserve — but the local sheriff said the gun-toting outsiders started causing trouble from the moment they arrived, about two months earlier.
Sheriff David Ward took over law enforcement duties in Harney County on Jan. 2, 2015 — one year to the day when armed militants led by Ammon Bundy began occupying the Malheur National Wildlife Preserve as part of a broader campaign to roll back federal control of public lands.
Ward recounted his experience with the militants, many of whom are now jailed on a variety of felony counts in connection with the 41-day standoff, during a podcast interview with an eastern Washington sheriff, reported The Spokesman-Review.
“I’m sorry, folks — they’re not patriots, they’re thugs,” said Spokane County Sheriff Ozzie Knezovich. “They are, in fact, the true tyranny.”
Ward knew little about Bundy, who’s now charged along with other family members in connection with an armed standoff in 2014 at his father’s Nevada ranch, until the Utah mechanic and other militants showed up in Burns and demanded a meeting Nov. 5 with the sheriff.
“It made me a little nervous about why these guys were in my community,” Ward said.
Bundy and Ryan Payne, an Army veteran from Montana, said they’d come to protest the prison sentencing of two local ranchers who set fire on public land as part of their own ongoing dispute with federal authorities.
Ward said the out-of-staters demanded that the sheriff go along with their plans to challenge the feds — or else.
Bundy came back Nov. 19 with 10 other men, most of them armed, and the militants posted other armed men outside Ward’s office.
The sheriff again told the militants that he would not support their plans because he said his duties included enforcement of court orders — which called for ranchers Dwight Hammond Jr. and Steven Hammond to return to prison to finish serving their sentences.
Ward said the militants and their supporters then flooded his emergency dispatch center with so many complaints that dispatchers were unable to take 911 calls from locals, and he said the harassment didn’t stop there.
More and more militants and their supporters started arriving after Thanksgiving — including Blaine Cooper and Jon Ritzheimer.
They followed Ward, his deputies and their family members around and drove slowly past their homes, and they bothered residents who put up signs or social media posts criticizing the outsiders.
Bundy and some local supporters set up a “committee of safety,” which was apparently intended to serve as a shadow government, and talked about arresting public officials who failed to support their armed demonstration.
Ward said Cooper, who carried a lengthy felon record from Arizona, and Ritzheimer, a retired Marine who organized anti-Muslim rallies, stalked him and his family as they went Christmas shopping.
Ward, who served as an Army medic during combat overseas, said he didn’t like that so many of the militants lied about their military service, and he’s still upset that they put innocent civilians in danger.
“It was a very trying time,” Ward said. “I looked over my shoulder during that time more than I did in Afghanistan and Somalia.”
Knezovich said the anti-government militants’ actions were appalling.
“True patriots don’t do that to other Americans,” he said.
Anti-government extremists are awaiting trial for their armed takeover of an Oregon nature preserve — but the local sheriff said the gun-toting outsiders started causing trouble from the moment they arrived, about two months earlier.
Sheriff David Ward took over law enforcement duties in Harney County on Jan. 2, 2015 — one year to the day when armed militants led by Ammon Bundy began occupying the Malheur National Wildlife Preserve as part of a broader campaign to roll back federal control of public lands.
Ward recounted his experience with the militants, many of whom are now jailed on a variety of felony counts in connection with the 41-day standoff, during a podcast interview with an eastern Washington sheriff, reported The Spokesman-Review.
“I’m sorry, folks — they’re not patriots, they’re thugs,” said Spokane County Sheriff Ozzie Knezovich. “They are, in fact, the true tyranny.”
Ward knew little about Bundy, who’s now charged along with other family members in connection with an armed standoff in 2014 at his father’s Nevada ranch, until the Utah mechanic and other militants showed up in Burns and demanded a meeting Nov. 5 with the sheriff.
“It made me a little nervous about why these guys were in my community,” Ward said.
Bundy and Ryan Payne, an Army veteran from Montana, said they’d come to protest the prison sentencing of two local ranchers who set fire on public land as part of their own ongoing dispute with federal authorities.
Ward said the out-of-staters demanded that the sheriff go along with their plans to challenge the feds — or else.
Bundy came back Nov. 19 with 10 other men, most of them armed, and the militants posted other armed men outside Ward’s office.
The sheriff again told the militants that he would not support their plans because he said his duties included enforcement of court orders — which called for ranchers Dwight Hammond Jr. and Steven Hammond to return to prison to finish serving their sentences.
Ward said the militants and their supporters then flooded his emergency dispatch center with so many complaints that dispatchers were unable to take 911 calls from locals, and he said the harassment didn’t stop there.
More and more militants and their supporters started arriving after Thanksgiving — including Blaine Cooper and Jon Ritzheimer.
They followed Ward, his deputies and their family members around and drove slowly past their homes, and they bothered residents who put up signs or social media posts criticizing the outsiders.
Bundy and some local supporters set up a “committee of safety,” which was apparently intended to serve as a shadow government, and talked about arresting public officials who failed to support their armed demonstration.
Ward said Cooper, who carried a lengthy felon record from Arizona, and Ritzheimer, a retired Marine who organized anti-Muslim rallies, stalked him and his family as they went Christmas shopping.
Ward, who served as an Army medic during combat overseas, said he didn’t like that so many of the militants lied about their military service, and he’s still upset that they put innocent civilians in danger.
“It was a very trying time,” Ward said. “I looked over my shoulder during that time more than I did in Afghanistan and Somalia.”
Knezovich said the anti-government militants’ actions were appalling.
“True patriots don’t do that to other Americans,” he said.
Tuesday, April 12, 2016
Sunday, April 03, 2016
Giant Leak of Offshore Financial Records Exposes Global Array of Crime and Corruption
By The International Consortium of Investigative Journalists
In this story
- Files reveal the offshore holdings of 140 politicians and public officials from around the world
- Current and former world leaders in the data include prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia
- More than 214,000 offshore entities appear in the leak, connected to people in more than 200 countries and territories
- Major banks have driven the creation of hard-to-trace companies in offshore havens
A massive leak of documents exposes the offshore holdings of 12
current and former world leaders and reveals how associates of Russian
President Vladimir Putin secretly shuffled as much as $2 billion through
banks and shadow companies.
The leak also provides details of the hidden financial dealings of 128 more politicians and public officials around the world.
The cache of 11.5 million records shows how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars.
These are among the findings of a yearlong investigation by the International Consortium of Investigative Journalists, German newspaper Süddeutsche Zeitung and more than 100 other news organizations.
The files expose offshore companies controlled by the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan.
They also include at least 33 people and companies blacklisted by the U.S. government because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords, terrorist organizations like Hezbollah or rogue nations like North Korea and Iran.
One of those companies supplied fuel for the aircraft that the Syrian government used to bomb and kill thousands of its own citizens, U.S. authorities have charged.
“These findings show how deeply ingrained harmful practices and criminality are in the offshore world,” said Gabriel Zucman, an economist at the University of California, Berkeley and author of “The Hidden Wealth of Nations: The Scourge of Tax Havens.” Zucman, who was briefed on the media partners’ investigation, said the release of the leaked documents should prompt governments to seek “concrete sanctions” against jurisdictions and institutions that peddle offshore secrecy.
Chinese President Xi Jinping and British Prime Minister David Cameron. Photo: UK Government / Georgina Coupe
World
leaders who have embraced anti-corruption platforms feature in the
leaked documents. The files reveal offshore companies linked to the
family of China’s top leader, Xi Jinping, who has vowed to fight “armies
of corruption,” as well as Ukrainian President Petro Poroshenko, who
has positioned himself as a reformer in a country shaken by corruption
scandals. The files also contain new details of offshore dealings by the
late father of British Prime Minister David Cameron, a leader in the
push for tax-haven reform.
The leaked data covers nearly 40 years, from 1977 through the end of
2015. It allows a never-before-seen view inside the offshore world —
providing a day-to-day, decade-by-decade look at how dark money flows
through the global financial system, breeding crime and stripping
national treasuries of tax revenues.
Most of the services the offshore industry provides are legal if used by the law abiding. But the documents show that banks, law firms and other offshore players have often failed to follow legal requirements that they make sure their clients are not involved in criminal enterprises, tax dodging or political corruption. In some instances, the files show, offshore middlemen have protected themselves and their clients by concealing suspect transactions or manipulating official records.
The documents make it clear that major banks are big drivers behind
the creation of hard-to-trace companies in the British Virgin Islands,
Panama and other offshore havens. The files list nearly 15,600 paper
companies that banks set up for clients who want keep their finances
under wraps, including thousands created by international giants UBS and
HSBC.
The records reveal a pattern of covert maneuvers by banks, companies and people tied to Russian leader Putin. The records show offshore companies linked to this network moving money in transactions as large as $200 million at a time. Putin associates disguised payments, backdated documents and gained hidden influence within the country’s media and automotive industries, the leaked files show.
A Kremlin spokesman did not answer questions for this story, but instead went public March 28 with charges that ICIJ and its media partners were preparing a misleading “information attack” on Putin and people close to him.
The leaked records — which were reviewed by a team of more than 370 journalists from 76 countries — come from a little-known but powerful law firm based in Panama, Mossack Fonseca, that has branches in Hong Kong, Miami, Zurich and more than 35 other places around the globe.
The firm is one of the world’s top creators of shell companies, corporate structures that can be used to hide ownership of assets. The law firm’s leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories. ICIJ will release the full list of companies and people linked to them in early May.
The data includes emails, financial spreadsheets, passports and corporate records revealing the secret owners of bank accounts and companies in 21 offshore jurisdictions, from Nevada to Singapore to the British Virgin Islands.
Files show a number of luxury yachts bought and sold through offshore companies. Photo: Twiga269 / Flickr
Mossack
Fonseca’s fingers are in Africa’s diamond trade, the international art
market and other businesses that thrive on secrecy. The firm has
serviced enough Middle East royalty to fill a palace. It’s helped two
kings, Mohammed VI of Morocco and King Salman of Saudi Arabia, take to
the sea on luxury yachts.
In Iceland, the leaked files show how Prime Minister Sigmundur David Gunnlaugsson and his wife secretly owned an offshore firm that held millions of dollars in Icelandic bank bonds during that country’s financial crisis.
The files include a convicted money launderer who claimed he’d arranged a $50,000 illegal campaign contribution used to pay the Watergate burglars, 29 billionaires featured in Forbes Magazine’s list of the world’s 500 richest people and movie star Jackie Chan, who has at least six companies managed through the law firm.
As with many of Mossack Fonseca’s clients, there is no evidence that Chan used his companies for improper purposes. Having an offshore company isn’t illegal. For some international business transactions, it’s a logical choice.
The Mossack Fonseca documents indicate, however, that the firm’s customers have included Ponzi schemers, drug kingpins, tax evaders and at least one jailed sex offender. A U.S. businessman convicted of traveling to Russia to have sex with underage orphans signed papers for an offshore company while he was serving his prison sentence in New Jersey, the records show.
The files contain new details about major scandals ranging from England’s most infamous gold heist to the bribery allegations convulsing FIFA, the body that rules international soccer.
The leaked documents reveal that the law firm of Juan Pedro Damiani, a member of FIFA’s ethics committee, had business relationships with three men who have been indicted in the FIFA scandal — former FIFA vice president Eugenio Figueredo and Hugo and Mariano Jinkis, the father-son team accused of paying bribes to win broadcast rights to Latin American soccer events. The records show that Damiani’s law firm in Uruguay represented an offshore company linked to the Jinkises and seven companies linked to Figueredo.
In response to the reporting by ICIJ and its media partners, FIFA’s ethics panel has launched a preliminary investigation into Damiani’s relationship to Figueredo. A spokesman for the committee said Damiani first informed the panel about his business ties to Figueredo on March 18. That was one day after the reporting team sent questions to Damiani about his law firm’s work for companies tied to the former FIFA vice president.
Argentine soccer player Lionel Messi. Photo: Shutterstock / CP DC Press
The
world’s best soccer player, Lionel Messi, is also found in the
documents. The records show Messi and his father were owners of a Panama
company: Mega Star Enterprises Inc. This adds a new name to the list of
shell companies known to be linked to Messi. His offshore dealings are
currently the target of a tax evasion case in Spain.
Whether they’re famous or unknown, Mossack Fonseca works aggressively
to protect its clients’ secrets. In Nevada, the records show, the law
firm tried to shield itself and its clients from the fallout from a
legal action in U.S. District Court by removing paper records from its Las Vegas branch and having its tech gurus wipe electronic records from phones and computers.
The leaked files show the firm regularly offered to backdate documents to help its clients gain advantage in their financial affairs. It was so common that in 2007 an email exchange shows firm employees talking about establishing a price structure — clients would pay $8.75 for each month farther back in time that a corporate document would be backdated.
In a written response to questions from ICIJ and its media partners, the firm said it “does not foster or promote illegal acts. Your allegations that we provide shareholders with structures supposedly designed to hide the identity of the real owners are completely unsupported and false.”
The firm added that the backdating of documents “is a well-founded and accepted practice” that is “common in our industry and its aim is not to cover up or hide unlawful acts.”
The firm said it couldn’t answer questions about specific customers because of its obligation to maintain client confidentiality.
The law firm’s co-founder, Ramón Fonseca, said in a recent interview on Panamanian television that the firm has no responsibility for what clients do with the offshore companies that the firm sells. He compared the firm to a “car factory” whose liability ends once the car is produced. Blaming Mossack Fonseca for what people do with their companies would be like blaming a carmaker “if the car was used in a robbery,” he said.
In February 2015, Süddeutsche Zeitung reported that German law-enforcement agencies had launched a series of raids targeting one of the country’s biggest banks, Commerzbank, in a tax-fraud investigation that authorities said could lead to criminal charges against Mossack Fonseca employees.
In Brazil, the law firm has become a target in a bribery and money laundering investigation dubbed “Operation Car Wash” (“Lava Jato,” in Portuguese), which has led to criminal charges against leading politicians and an investigation of popular former president Luiz Inacio Lula da Silva. The scandal threatens to unseat current President Dilma Rousseff.
Employees of Mossack Fonseca were among those arrested by Brazilian police as part of Operation Car Wash. Image: RedeTV
In January, Brazilian prosecutors labeled Mossack Fonseca as a “big money launderer”
and announced they had filed criminal charges against five employees of
the firm’s Brazilian office for their role in the scandal.
Mossack Fonseca denies any wrongdoing in Brazil.
The disclosures found inside the law firm’s leaked files dramatically expand on previous leaks of offshore records that ICIJ and its reporting partners have revealed in the past four years.
In the largest media collaboration ever undertaken, journalists working in more than 25 languages dug into Mossack Fonseca’s inner workings and traced the secret dealings of the law firm’s customers around the world. They shared information and hunted down leads generated by the leaked files using corporate filings, property records, financial disclosures, court documents and interviews with money laundering experts and law-enforcement officials.
Reporters at Süddeutsche Zeitung obtained millions of records from a confidential source and shared them with ICIJ and other media partners. The news outlets involved in the collaboration did not pay for the documents.
Before Süddeutsche Zeitung obtained the leak, German tax authorities bought a smaller set of Mossack Fonseca documents from a whistleblower, a move that triggered the raids in Germany in early 2015. This smaller set of files has since been offered to tax authorities in the United Kingdom, the United States and other countries, according to sources with knowledge of the matter.
The larger set of files obtained by the news organizations offers more than a snapshot of one law firm’s business methods or a catalog of its more unsavory customers. It allows a far-reaching view into an industry that has worked to keep its practices hidden — and offers clues as to why efforts to reform the system have faltered.
The story of Mossack Fonseca is, in many ways, the story of the offshore system itself.
“Thanks ever so much for your help. Have a nice Christmas,” one of the crooks said as they departed.
British media dubbed the heist the “Crime of the Century.” Much of the loot — including the cash reaped by melting the gold and selling it — was never recovered. Where the missing money went is a mystery that continues to fascinate students of England’s underworld.
Mossack Fonseca co-founder Jürgen Mossack.
Now
documents within Mossack Fonseca’s files reveal that the law firm and
its co-founder, Jürgen Mossack, may have helped the conspirators keep
the spoils out of the hands of authorities by protecting a company tied
to Gordon Parry, a London wheeler-dealer who laundered money for the
Brink’s-Mat plotters.
Sixteen months after the robbery, the records show, Mossack Fonseca
set up a Panama shell company called Feberion Inc. Jürgen Mossack was
one the company’s three “nominee” directors, a term used in the business
for stand-ins who control a company on paper but exercise no real
authority over its activities.
An internal memo written by Mossack shows he was aware in 1986 that the company was “apparently involved in the management of money from the famous theft from Brink’s-Mat in London. The company itself has not been used illegally, but it could be that the company invested money through bank accounts and properties that was illegitimately sourced.”
Mossack Fonseca records from 1987 make it clear that Parry was behind Feberion. Rather than help authorities gain access to Feberion’s assets, the law firm took steps that prevented U.K. police from gaining control of the company, the records show.
After police obtained the two certificates that controlled the company’s ownership, Mossack Fonseca arranged for Feberion to issue 98 new shares, a move that appears to have effectively wrested control away from investigators, the leaked records show.
It was not until 1995 — three years after Parry was sent to prison for his role in the gold caper — that Mossack Fonseca ended its business relationship with Feberion.
A spokesman for the law firm said any allegations the firm helped shield the proceeds of the Brink’s-Mat robbery “are entirely false.” The spokesman said Jürgen Mossack “never had any dealings” with Parry and was never contacted by police about the case.
Mossack Fonseca’s defense of the dodgy company illustrates how far many offshore operatives will go to serve their customers’ interests.
The offshore system relies on a sprawling global industry of bankers, lawyers, accountants and these go-betweens who work together to protect their clients’ secrets. These secrecy experts use anonymous companies, trusts and other paper entities to create complex structures that can be used to disguise the origins of dirty money.
“They are the gasoline that runs the engine,” says Robert Mazur, a former U.S. drug agent and author of The Infiltrator: My Secret Life Inside the Dirty Banks Behind Pablo Escobar’s Medellín Cartel. “They’re an extraordinarily important piece of the formula of success for criminal organizations.”
Mossack Fonseca told ICIJ that it follows “both the letter and spirit of the law. Because we do, we have not once in nearly 40 years of operation been charged with criminal wrongdoing.”
The men who founded the firm decades ago — and continue today as its main partners — are well-known figures in Panamanian society and politics.
Mossack Fonseca co-founder Ramón Fonseca.
Jürgen
Mossack is a German immigrant whose father sought a new life in Panama
for his family after serving in Hitler’s Waffen-SS during World War II.
Ramón Fonseca is an award-winning novelist who has worked in recent
years as an adviser to Panama’s president. He took a leave of absence as
presidential adviser in March after his firm was implicated in the
Brazil scandal and ICIJ and its partners began to ask questions about
the law firm’s practices.
From its base in Panama, one of the world’s top financial secrecy
zones, Mossack Fonseca seeds anonymous companies in Panama, the British
Virgin Islands and other financial havens.
The law firm has worked closely with big banks and big law firms in places like The Netherlands, Mexico, the United States and Switzerland, helping clients move money or slash their tax bills, the secret records show.
An ICIJ analysis of the leaked files found that more than 500 banks, their subsidiaries and branches have worked with Mossack Fonseca since the 1970s to help clients manage offshore companies. UBS set up more than 1,100 offshore companies through Mossack Fonseca. HSBC and its affiliates created more than 2,300.
In all, the files indicate Mossack Fonseca worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for customers, the records show.
Mossack Fonseca says these middlemen are its true clients, not the eventual customers who use offshore companies. The firm says these middlemen provide additional layers of oversight for reviewing new customers. As for its own procedures, Mossack Fonseca says they often exceed “the existing rules and standards to which we and others are bound.”
In its efforts to protect Feberion Inc., the shell company linked to the Brink’s-Mat gold heist, Mossack Fonseca used the services of a Panama-based firm, Chartered Management Company, run by Gilbert R.J. Straub, an American expatriate who played a cameo role in the Watergate scandal.
In 1987, as U.K. police were investigating the shell company, Jürgen Mossack and Feberion’s other paper directors resigned, with the understanding they’d be replaced by new directors appointed by Straub’s Chartered Management, the secret files show.
Straub was eventually caught in a U.S. Drug Enforcement Administration sting that was unrelated to the Brink’s-Mat case, according to Mazur, the former undercover agent. During one of his deep-cover stints, Mazur built the case that led Straub to plead guilty to money laundering in 1995. Believing Mazur was a well-connected money launderer, Straub tried to establish his own criminal bona fides, Mazur says, by describing how he’d illegally channeled cash to President Nixon’s 1972 re-election campaign.
Nick and his mother and his younger brother, who is deaf, survived thanks to monthly checks from a fund for widows and orphans of mineworkers.
One day the payments stopped.
Gold miners in South Africa. Photo: AP Photo / Themba Hadebe
His family was one of many that lost out because of a $60 million investment fraud
pulled off by South African businessmen. Prosecutors alleged that a
group of individuals connected to an asset management company, Fidentia,
had schemed to loot millions from investment funds — including the
mineworkers’ death benefits pool that was supporting some 46,000 widows
and orphans.
Mossack Fonseca’s leaked documents show that at least two of the men
involved in the fraud used the Panama-based law firm to create offshore
companies — and that Mossack Fonseca was willing to help one of the
fraudsters protect his money even after authorities publicly linked him
to the scandal.
Ponzi schemers and other fraudsters who bilk large numbers of victims often use offshore structures to pull of their schemes or hide the proceeds. The Fidentia case isn’t the only big-ticket fraud that appears in the files of Mossack Fonseca’s clients.
In Indonesia, for example, small investors claim a company incorporated by Mossack Fonseca in the British Virgin Islands was used to scam 3,500 people out of at least $150 million.
“We really need that money for our son’s education fee this April,” one Indonesian investor emailed Mossack Fonseca in April 2007 after payouts had stopped.
“You can give us any suggestion something we can do,” the investor asked in broken English after seeing Mossack Fonseca’s name on the investment fund’s advertising leaflet.
In the Fidentia case, Mossack Fonseca’s records show that one of the men later jailed in South Africa for his role in the fraud, Graham Maddock, paid Mossack Fonseca $59,000 in 2005 and 2006 to create two sets of offshore companies, including one called Fidentia North America. The law firm’s records say it gave him “the VIP service.”
Mossack Fonseca also created offshore structures for Steven Goodwin, a man that prosecutors later claimed had played an “instrumental role” within the Fidentia swindle. As the scandal broke in 2007, Goodwin flew to Australia, then to the U.S., where a Mossack Fonseca lawyer met with him at a luxury hotel in Manhattan to discuss his offshore holdings, the firm’s internal records show.
The firm official later wrote that he and Goodwin “spoke deeply” about the Fidentia scandal and that he had “convinced Goodwin to better protect” his offshore company’s assets by passing them to a third party.
In his memo, the firm official told colleagues that Goodwin wasn’t involved in the scandal “in any way whatsoever” — he was just “a victim of the circumstances.”
In April 2008, the FBI arrested Goodwin in Los Angeles and sent him back to South Africa, where he pleaded guilty to fraud and money laundering. He was sentenced to 10 years in prison.
A month after Goodwin’s sentencing, an employee at Mossack Fonseca suggested a plan for frustrating South African prosecutors who were expected to start digging into assets linked to Goodwin’s offshore company, Hamlyn Property LLP, which had been set up to buy real estate in South Africa.
The employee proposed having an accountant “prepare” audits for 2006 and 2007 “to try to prevent the prosecutor from taking actions against the entities behind Hamlyn.” He set off “prepare” in quote marks in his email.
It’s unclear whether the proposal was adopted.
Mossack Fonseca did not answer questions from ICIJ about its relationship with Goodwin. A representative for Goodwin told ICIJ that Goodwin “had nothing whatsoever” to do Fidentia’s collapse “or anything directly or indirectly to do with the 46,000 widows and orphans.”
The following day, Sandalwood assigned the rights to collect payments on the loan — including interest — to Ove Financial Corp., a mysterious company in the British Virgin Islands.
For those rights, Ove paid $1.
But the money trail didn’t end there.
The same day, Ove reassigned its rights to collect on the loan to a Panama company called International Media Overseas.
It too paid $1.
In the space of 24 hours the loan had, on paper, traversed three countries, two banks and four companies, making the money all but untraceable in the process.
Close
allies of Russian President Vladimir Putin make extensive use of
offshore holdings to shuffle large sums of money. Photo: AP Photo /
Krill Kudryavtsev
There were plenty of reasons why the
men behind the transaction might want it disguised, not least of all
because the money trail came uncomfortably close to Russian leader
Vladimir Putin.
St. Petersburg-based Bank Rossiya, an institution whose majority
owner and chairman has been called one of Putin’s “cashiers,”
established Sandalwood Continental and directed the money flow.
International Media Overseas, where rights to the interest payments from the $200 million appear to have landed, was controlled, on paper, by one of Putin’s oldest friends, Sergey Roldugin, a classical cellist who is godfather to Putin’s eldest daughter.
The $200 million loan was one of dozens of transactions totaling at least $2 billion found in the Mossack Fonseca files involving people or companies linked to Putin. They formed part of a Bank Rossiya enterprise that gained indirect influence over a major shareholder in Russia’s biggest truck maker and amassed secret stakes in a key Russian media property.
Suspicious payments made by Putin’s cronies may have in some cases been designed as payoffs, possibly in exchange for Russian government aid or contracts. The secret documents suggest that much of the loan money originally came from a bank in Cyprus that at the time was majority owned by the Russian state-controlled VTB Bank.
In a media conference call last week, Putin spokesman Dmitry Peskov said the government wouldn’t reply to “honey-worded queries” from ICIJ or its reporting partners, because they contain questions that “have been asked hundreds of times and answered hundreds of times.”
Peskov added that Russia has “available the full arsenal of legal means in the national and international arena to protect the honor and dignity of our president.”
Under national laws and international agreements, firms like Mossack Fonseca that help create companies and bank accounts are supposed to be on the lookout for clients who may be involved in money laundering, tax evasion or other wrongdoing. They are required to pay special attention to “politically exposed persons” — government officials or their family members or associates. If someone is a “PEP,” the middlemen creating their companies are expected to review their activities carefully to make sure they are not engaging in corruption.
Mossack Fonseca told ICIJ that it has “duly established policies and procedures to identify and handle those cases where individuals” qualify as PEPs.
Often, Mossack Fonseca appeared not to realize who its customers were. A 2015 internal audit found that the law firm knew the identities of the real owners of just 204 of 14,086 companies it had incorporated in Seychelles, a tax haven in the Indian Ocean.
British Virgin Islands authorities fined Mossack Fonseca $37,500 for violating anti-money-laundering rules because the firm incorporated a company for the son of former Egyptian President Hosni Mubarak but failed to identify the connection, even after the father and son were charged with corruption in Egypt. An internal review by the law firm concluded, “our risk assessment formula is seriously flawed.”
In all, an ICIJ analysis of the Mossack Fonseca files identified 61 family members and associates of prime ministers, presidents or kings.
The records show, for example, that the family of Azerbaijan
President Ilham Aliyev used foundations and companies in Panama to hold
secret stakes in gold mines and London real estate. The children of
Pakistani Prime Minister Nawaz Sharif also owned London real estate
through companies created by Mossack Fonseca, the law firm’s records
show.
Family members of at least eight current or former members of China’s Politburo Standing Committee, the country’s main ruling body, have offshore companies arranged though Mossack Fonseca. They include President Xi’s brother-in-law, who set up two British Virgin Islands companies in 2009.
Representatives for the Azeri, Pakistani and Chinese leaders did not respond to requests for comment.
The list of world leaders who used Mossack Fonseca to set up offshore entities includes the current president of Argentina, Mauricio Macri, who was director and vice president of a Bahamas company managed by Mossack Fonseca when he was a businessman and the mayor of Argentina’s capital, Buenos Aires. A spokesman for Macri said the president never personally owned shares in the firm, which was part of his family’s business.
During the bloodiest days of Russia’s 2014 invasion of the Ukraine’s Donbas region, the documents show, representatives of Ukrainian leader Petro Poroshenko scrambled to find a copy of a home utility bill for him to complete the paperwork to create a holding company in the British Virgin Islands.
A spokesperson for Poroshenko said the creation of the company had nothing to do with “any political and military events in Ukraine.” Poroshenko’s financial advisers said the president didn’t include the BVI firm in his 2014 financial disclosures because neither the holding company nor two related companies in Cyprus and the Netherlands have any assets. They said that the companies were part of a corporate restructuring to help sell Poroshenko’s confectionery business.
When Sigmundur David Gunnlaugsson became Iceland’s prime minister in 2013 he concealed a secret that could have damaged his political career. He and his wife shared ownership in an offshore company in the British Virgin Islands when he entered parliament in 2009. He sold his stake in the company months later to his wife for $1.
The company held bonds originally worth millions of dollars in three giant Icelandic banks that failed during the 2008 global financial crash, making it a creditor in their bankruptcies. Gunnlaugsson’s government negotiated a deal with creditors last year without disclosing his family’s financial stake in the outcome.
Gunnlaugsson has denied in recent days that his family’s financial interests influenced his stances. The leaked records do not make it clear whether Gunnlaugsson’s political positions benefited or hurt the value of the bonds held through the offshore company.
Iceland Prime Minister Sigmundur David Gunnlaugsson and his wife Anna Sigurlaug Pálsdóttir.
In
an interview with an ICIJ media partners, Reykjavik Media and SVT,
Gunnlaugsson denied hiding assets. When he was confronted with the name
of the offshore company linked to him — Wintris Inc. — the prime
minister said “I’m starting to feel a bit strange about these questions
because it’s like you are accusing me of something.”
Soon after, he ended the interview.
Four days later, his wife took the matter public, posting a note on Facebook asserting that the company was hers, not his, and that she had paid all taxes on it.
Since then, members of Iceland’s parliament have questioned why Gunnlaugsson never disclosed the offshore company, with one lawmaker calling for the prime minister and his government to resign.
The prime minister has fought back, putting out an eight-page statement arguing he wasn’t required to publicly report his connection to Wintris because it was really owned by his wife and because it was “merely a holding company, not a company engaged in commercial activities.”
Malchus Irvin Boncamper, an accountant on the Caribbean island of St. Kitts, pleaded guilty in a U.S. court in 2011 to helping the con artists launder proceeds of their frauds.
The Ethan Allen tour boat brought to the surface after sinking in Lake George, New York. Photo: AP Photo / Mary Altaffer
This
created a problem for Mossack Fonseca, because Boncamper had served as
the front man — a “nominee” director — for 30 companies created by the
law firm.
Once it learned of Boncamper’s criminal conviction, Mossack Fonseca
took quick action. It told its offices to replace Boncamper as director
of the companies — and to backdate the records in a way that made it
appear the changes had taken place, in some cases, a decade earlier.
The Boncamper case is one of the examples in the leaked files showing the law firm using questionable tactics to hide its own methods or its customers’ activities from legal authorities.
In the “Operation Car Wash” case in Brazil, prosecutors allege that Mossack Fonseca employees destroyed and hid documents to mask the law firm’s involvement in money laundering. A police document says that, in one instance, an employee of the firm’s Brazil branch sent an email instructing co-workers to hide records involving a client who may have been the target of a police investigation: “Do not leave anything. I will save them in my car or at my house.”
In Nevada, the leaked files show, Mossack Fonseca employees worked in late 2014 to obscure the links between the law firm’s Las Vegas branch and its headquarters in Panama in anticipation of a U.S. court order requiring it to turn over information on 123 companies incorporated by the law firm. Argentine prosecutors had linked those Nevada-based companies to a corruption scandal involving an associate of former presidents Néstor Kirchner and Cristina Fernández de Kirchner.
In an effort to free itself from the American court’s jurisdiction, Mossack Fonseca claimed that its Las Vegas office, MF Nevada, wasn’t in fact a branch office at all. It said it had no control over the office.
The firm’s internal records show the opposite. They indicate that the firm controlled MF Nevada’s bank account and the firm’s co-founders and another Mossack Fonseca official owned 100 percent of MF Nevada.
To erase evidence of the connection, the law firm arranged to remove paper documents from the branch and worked to delete computer traces of the link between the Nevada and the Panama operations, internal emails show. One big worry, an internal email said, was that the branch’s manager might be too “nervous” to carry out the effort, making it easy for investigators to discover “that we are hiding something.”
A sign for MF Corporate Services outside a buisness complex in Las Vegas, Nevada. Photo: McClatchy / Ronda Churchill
Mossack
Fonseca declined to answer questions about the Brazil and Nevada
affairs, but denied generally that it had obstructed investigations or
covered up improper activities.
“It is not our policy to hide or destroy documentation that may be of
use in any ongoing investigation or proceeding,” the firm said.
He could have looked no further than his late father to see how challenging that would be.
Ian Cameron, a stockbroker and multimillionaire, was a Mossack Fonseca client who used the law firm to shield his investment fund, Blairmore Holdings, Inc., from U.K. taxes.
The fund’s name came from Blairmore House, his family’s ancestral country estate. Mossack Fonseca registered the investment fund in Panama even though many of its key investors were British. Ian Cameron controlled the fund from its birth in 1982 until his death in 2010.
A prospectus for investors said the fund “should be managed and conducted so that it does not become resident in the United Kingdom for United Kingdom taxation purposes.”
The fund did this by using untraceable certificates of ownership known as “bearer shares” and by employing “nominee” company officers based in the Bahamas, the law firm’s leaked records show.
Ian Cameron’s tax-haven history is an example of how deeply offshore secrecy is woven into the lives of political and financial elites around the world. It’s also an important economic engine for many countries. The weight of that self-interest has made reform difficult.
In the U.S., for example, states like Delaware and Nevada, which have allowed company owners to remain anonymous, continue to fight against efforts to require greater corporate transparency.
Mossack Fonseca’s home country, Panama, has refused to embrace a plan for worldwide exchange of information about bank accounts — out of concern that its offshore industry could be left at a competitive disadvantage. Panama officials say they will exchange information, but on a more modest scale.
The challenge that reformers and law enforcers face is how to find and stop criminal behavior when it’s buried beneath layers of secrecy. The most effective tool for breaking through this secrecy has been leaks of offshore documents that have dragged hidden dealings into the open.
Document leaks uncovered by ICIJ and its media partners have prompted legislation and official investigations in dozens of countries — and fanned fears among offshore customers who worry their secrets will be revealed.
In April 2013, after ICIJ released its “Offshore Leaks” stories based on confidential documents from the British Virgin Islands and Singapore, some Mossack Fonseca customers emailed the firm looking for reassurance that their offshore holdings were safe from scrutiny.
Mossack Fonseca told customers not to worry. It said its commitment to its clients’ privacy “has always been paramount, and in this regard your confidential information is stored in our state-of-the-art data center, and any communication within our global network is handled through an encryption algorithm that complies with the highest world-class standards.”
This story was reported and written by Bastian Obermayer , Gerard Ryle, Marina Walker Guevara, Michael Hudson, Jake Bernstein, Will Fitzgibbon, Mar Cabra, Martha M. Hamilton, Frederik Obermaier, Ryan Chittum, Emilia Diaz-Struck, Rigoberto Carvajal, Cécile Schilis-Gallego, Marcos Garcia Rey, Delphine Reuter, Matthew Caruana Galizia, Hamish Boland-Rudder, Miguel Fiandor and Mago Torres.
The leak also provides details of the hidden financial dealings of 128 more politicians and public officials around the world.
The cache of 11.5 million records shows how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars.
These are among the findings of a yearlong investigation by the International Consortium of Investigative Journalists, German newspaper Süddeutsche Zeitung and more than 100 other news organizations.
The files expose offshore companies controlled by the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan.
They also include at least 33 people and companies blacklisted by the U.S. government because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords, terrorist organizations like Hezbollah or rogue nations like North Korea and Iran.
One of those companies supplied fuel for the aircraft that the Syrian government used to bomb and kill thousands of its own citizens, U.S. authorities have charged.
“These findings show how deeply ingrained harmful practices and criminality are in the offshore world,” said Gabriel Zucman, an economist at the University of California, Berkeley and author of “The Hidden Wealth of Nations: The Scourge of Tax Havens.” Zucman, who was briefed on the media partners’ investigation, said the release of the leaked documents should prompt governments to seek “concrete sanctions” against jurisdictions and institutions that peddle offshore secrecy.
Chinese President Xi Jinping and British Prime Minister David Cameron. Photo: UK Government / Georgina CoupeMost of the services the offshore industry provides are legal if used by the law abiding. But the documents show that banks, law firms and other offshore players have often failed to follow legal requirements that they make sure their clients are not involved in criminal enterprises, tax dodging or political corruption. In some instances, the files show, offshore middlemen have protected themselves and their clients by concealing suspect transactions or manipulating official records.
The records reveal a pattern of covert maneuvers by banks, companies and people tied to Russian leader Putin. The records show offshore companies linked to this network moving money in transactions as large as $200 million at a time. Putin associates disguised payments, backdated documents and gained hidden influence within the country’s media and automotive industries, the leaked files show.
A Kremlin spokesman did not answer questions for this story, but instead went public March 28 with charges that ICIJ and its media partners were preparing a misleading “information attack” on Putin and people close to him.
The leaked records — which were reviewed by a team of more than 370 journalists from 76 countries — come from a little-known but powerful law firm based in Panama, Mossack Fonseca, that has branches in Hong Kong, Miami, Zurich and more than 35 other places around the globe.
The firm is one of the world’s top creators of shell companies, corporate structures that can be used to hide ownership of assets. The law firm’s leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories. ICIJ will release the full list of companies and people linked to them in early May.
The data includes emails, financial spreadsheets, passports and corporate records revealing the secret owners of bank accounts and companies in 21 offshore jurisdictions, from Nevada to Singapore to the British Virgin Islands.
Files show a number of luxury yachts bought and sold through offshore companies. Photo: Twiga269 / FlickrThe files include a convicted money launderer who claimed he’d arranged a $50,000 illegal campaign contribution used to pay the Watergate burglars, 29 billionaires featured in Forbes Magazine’s list of the world’s 500 richest people and movie star Jackie Chan, who has at least six companies managed through the law firm.
As with many of Mossack Fonseca’s clients, there is no evidence that Chan used his companies for improper purposes. Having an offshore company isn’t illegal. For some international business transactions, it’s a logical choice.
The Mossack Fonseca documents indicate, however, that the firm’s customers have included Ponzi schemers, drug kingpins, tax evaders and at least one jailed sex offender. A U.S. businessman convicted of traveling to Russia to have sex with underage orphans signed papers for an offshore company while he was serving his prison sentence in New Jersey, the records show.
The files contain new details about major scandals ranging from England’s most infamous gold heist to the bribery allegations convulsing FIFA, the body that rules international soccer.
The leaked documents reveal that the law firm of Juan Pedro Damiani, a member of FIFA’s ethics committee, had business relationships with three men who have been indicted in the FIFA scandal — former FIFA vice president Eugenio Figueredo and Hugo and Mariano Jinkis, the father-son team accused of paying bribes to win broadcast rights to Latin American soccer events. The records show that Damiani’s law firm in Uruguay represented an offshore company linked to the Jinkises and seven companies linked to Figueredo.
In response to the reporting by ICIJ and its media partners, FIFA’s ethics panel has launched a preliminary investigation into Damiani’s relationship to Figueredo. A spokesman for the committee said Damiani first informed the panel about his business ties to Figueredo on March 18. That was one day after the reporting team sent questions to Damiani about his law firm’s work for companies tied to the former FIFA vice president.
Argentine soccer player Lionel Messi. Photo: Shutterstock / CP DC PressThe leaked files show the firm regularly offered to backdate documents to help its clients gain advantage in their financial affairs. It was so common that in 2007 an email exchange shows firm employees talking about establishing a price structure — clients would pay $8.75 for each month farther back in time that a corporate document would be backdated.
In a written response to questions from ICIJ and its media partners, the firm said it “does not foster or promote illegal acts. Your allegations that we provide shareholders with structures supposedly designed to hide the identity of the real owners are completely unsupported and false.”
The firm added that the backdating of documents “is a well-founded and accepted practice” that is “common in our industry and its aim is not to cover up or hide unlawful acts.”
The firm said it couldn’t answer questions about specific customers because of its obligation to maintain client confidentiality.
The law firm’s co-founder, Ramón Fonseca, said in a recent interview on Panamanian television that the firm has no responsibility for what clients do with the offshore companies that the firm sells. He compared the firm to a “car factory” whose liability ends once the car is produced. Blaming Mossack Fonseca for what people do with their companies would be like blaming a carmaker “if the car was used in a robbery,” he said.
Under scrutiny
Until recently, Mossack Fonseca has largely operated in the shadows. But it has come under growing scrutiny as governments have obtained partial leaks of the firm’s files and authorities in Germany and Brazil began probing its practices.In February 2015, Süddeutsche Zeitung reported that German law-enforcement agencies had launched a series of raids targeting one of the country’s biggest banks, Commerzbank, in a tax-fraud investigation that authorities said could lead to criminal charges against Mossack Fonseca employees.
In Brazil, the law firm has become a target in a bribery and money laundering investigation dubbed “Operation Car Wash” (“Lava Jato,” in Portuguese), which has led to criminal charges against leading politicians and an investigation of popular former president Luiz Inacio Lula da Silva. The scandal threatens to unseat current President Dilma Rousseff.
Employees of Mossack Fonseca were among those arrested by Brazilian police as part of Operation Car Wash. Image: RedeTVThe disclosures found inside the law firm’s leaked files dramatically expand on previous leaks of offshore records that ICIJ and its reporting partners have revealed in the past four years.
In the largest media collaboration ever undertaken, journalists working in more than 25 languages dug into Mossack Fonseca’s inner workings and traced the secret dealings of the law firm’s customers around the world. They shared information and hunted down leads generated by the leaked files using corporate filings, property records, financial disclosures, court documents and interviews with money laundering experts and law-enforcement officials.
Reporters at Süddeutsche Zeitung obtained millions of records from a confidential source and shared them with ICIJ and other media partners. The news outlets involved in the collaboration did not pay for the documents.
Before Süddeutsche Zeitung obtained the leak, German tax authorities bought a smaller set of Mossack Fonseca documents from a whistleblower, a move that triggered the raids in Germany in early 2015. This smaller set of files has since been offered to tax authorities in the United Kingdom, the United States and other countries, according to sources with knowledge of the matter.
The larger set of files obtained by the news organizations offers more than a snapshot of one law firm’s business methods or a catalog of its more unsavory customers. It allows a far-reaching view into an industry that has worked to keep its practices hidden — and offers clues as to why efforts to reform the system have faltered.
The story of Mossack Fonseca is, in many ways, the story of the offshore system itself.
Crime of the century
Before dawn on Nov. 26, 1983, six robbers slipped into the Brink’s-Mat warehouse at London’s Heathrow Airport. The thugs tied up the security guards, doused them in gasoline, lit a match and threatened to set them afire unless they opened the warehouse’s vault. Inside, the thieves found nearly 7,000 gold bars, diamonds and cash.“Thanks ever so much for your help. Have a nice Christmas,” one of the crooks said as they departed.
British media dubbed the heist the “Crime of the Century.” Much of the loot — including the cash reaped by melting the gold and selling it — was never recovered. Where the missing money went is a mystery that continues to fascinate students of England’s underworld.
Mossack Fonseca co-founder Jürgen Mossack.An internal memo written by Mossack shows he was aware in 1986 that the company was “apparently involved in the management of money from the famous theft from Brink’s-Mat in London. The company itself has not been used illegally, but it could be that the company invested money through bank accounts and properties that was illegitimately sourced.”
Mossack Fonseca records from 1987 make it clear that Parry was behind Feberion. Rather than help authorities gain access to Feberion’s assets, the law firm took steps that prevented U.K. police from gaining control of the company, the records show.
After police obtained the two certificates that controlled the company’s ownership, Mossack Fonseca arranged for Feberion to issue 98 new shares, a move that appears to have effectively wrested control away from investigators, the leaked records show.
It was not until 1995 — three years after Parry was sent to prison for his role in the gold caper — that Mossack Fonseca ended its business relationship with Feberion.
A spokesman for the law firm said any allegations the firm helped shield the proceeds of the Brink’s-Mat robbery “are entirely false.” The spokesman said Jürgen Mossack “never had any dealings” with Parry and was never contacted by police about the case.
Mossack Fonseca’s defense of the dodgy company illustrates how far many offshore operatives will go to serve their customers’ interests.
The offshore system relies on a sprawling global industry of bankers, lawyers, accountants and these go-betweens who work together to protect their clients’ secrets. These secrecy experts use anonymous companies, trusts and other paper entities to create complex structures that can be used to disguise the origins of dirty money.
“They are the gasoline that runs the engine,” says Robert Mazur, a former U.S. drug agent and author of The Infiltrator: My Secret Life Inside the Dirty Banks Behind Pablo Escobar’s Medellín Cartel. “They’re an extraordinarily important piece of the formula of success for criminal organizations.”
Mossack Fonseca told ICIJ that it follows “both the letter and spirit of the law. Because we do, we have not once in nearly 40 years of operation been charged with criminal wrongdoing.”
The men who founded the firm decades ago — and continue today as its main partners — are well-known figures in Panamanian society and politics.
Mossack Fonseca co-founder Ramón Fonseca.The law firm has worked closely with big banks and big law firms in places like The Netherlands, Mexico, the United States and Switzerland, helping clients move money or slash their tax bills, the secret records show.
An ICIJ analysis of the leaked files found that more than 500 banks, their subsidiaries and branches have worked with Mossack Fonseca since the 1970s to help clients manage offshore companies. UBS set up more than 1,100 offshore companies through Mossack Fonseca. HSBC and its affiliates created more than 2,300.
In all, the files indicate Mossack Fonseca worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for customers, the records show.
Mossack Fonseca says these middlemen are its true clients, not the eventual customers who use offshore companies. The firm says these middlemen provide additional layers of oversight for reviewing new customers. As for its own procedures, Mossack Fonseca says they often exceed “the existing rules and standards to which we and others are bound.”
In its efforts to protect Feberion Inc., the shell company linked to the Brink’s-Mat gold heist, Mossack Fonseca used the services of a Panama-based firm, Chartered Management Company, run by Gilbert R.J. Straub, an American expatriate who played a cameo role in the Watergate scandal.
In 1987, as U.K. police were investigating the shell company, Jürgen Mossack and Feberion’s other paper directors resigned, with the understanding they’d be replaced by new directors appointed by Straub’s Chartered Management, the secret files show.
Straub was eventually caught in a U.S. Drug Enforcement Administration sting that was unrelated to the Brink’s-Mat case, according to Mazur, the former undercover agent. During one of his deep-cover stints, Mazur built the case that led Straub to plead guilty to money laundering in 1995. Believing Mazur was a well-connected money launderer, Straub tried to establish his own criminal bona fides, Mazur says, by describing how he’d illegally channeled cash to President Nixon’s 1972 re-election campaign.
Secrets and victims
Nick Kgopa’s father died when Nick was 14. His father’s workmates at a gold mine in northern South Africa said Nick’s dad had been killed by chemical exposure.Nick and his mother and his younger brother, who is deaf, survived thanks to monthly checks from a fund for widows and orphans of mineworkers.
One day the payments stopped.
Gold miners in South Africa. Photo: AP Photo / Themba HadebePonzi schemers and other fraudsters who bilk large numbers of victims often use offshore structures to pull of their schemes or hide the proceeds. The Fidentia case isn’t the only big-ticket fraud that appears in the files of Mossack Fonseca’s clients.
In Indonesia, for example, small investors claim a company incorporated by Mossack Fonseca in the British Virgin Islands was used to scam 3,500 people out of at least $150 million.
“We really need that money for our son’s education fee this April,” one Indonesian investor emailed Mossack Fonseca in April 2007 after payouts had stopped.
“You can give us any suggestion something we can do,” the investor asked in broken English after seeing Mossack Fonseca’s name on the investment fund’s advertising leaflet.
In the Fidentia case, Mossack Fonseca’s records show that one of the men later jailed in South Africa for his role in the fraud, Graham Maddock, paid Mossack Fonseca $59,000 in 2005 and 2006 to create two sets of offshore companies, including one called Fidentia North America. The law firm’s records say it gave him “the VIP service.”
Mossack Fonseca also created offshore structures for Steven Goodwin, a man that prosecutors later claimed had played an “instrumental role” within the Fidentia swindle. As the scandal broke in 2007, Goodwin flew to Australia, then to the U.S., where a Mossack Fonseca lawyer met with him at a luxury hotel in Manhattan to discuss his offshore holdings, the firm’s internal records show.
The firm official later wrote that he and Goodwin “spoke deeply” about the Fidentia scandal and that he had “convinced Goodwin to better protect” his offshore company’s assets by passing them to a third party.
In his memo, the firm official told colleagues that Goodwin wasn’t involved in the scandal “in any way whatsoever” — he was just “a victim of the circumstances.”
In April 2008, the FBI arrested Goodwin in Los Angeles and sent him back to South Africa, where he pleaded guilty to fraud and money laundering. He was sentenced to 10 years in prison.
A month after Goodwin’s sentencing, an employee at Mossack Fonseca suggested a plan for frustrating South African prosecutors who were expected to start digging into assets linked to Goodwin’s offshore company, Hamlyn Property LLP, which had been set up to buy real estate in South Africa.
The employee proposed having an accountant “prepare” audits for 2006 and 2007 “to try to prevent the prosecutor from taking actions against the entities behind Hamlyn.” He set off “prepare” in quote marks in his email.
It’s unclear whether the proposal was adopted.
Mossack Fonseca did not answer questions from ICIJ about its relationship with Goodwin. A representative for Goodwin told ICIJ that Goodwin “had nothing whatsoever” to do Fidentia’s collapse “or anything directly or indirectly to do with the 46,000 widows and orphans.”
Politically exposed
On Feb. 10, 2011, an anonymous company in the British Virgin Islands named Sandalwood Continental Ltd. loaned $200 million to an equally shadowy firm based in Cyprus called Horwich Trading Ltd.The following day, Sandalwood assigned the rights to collect payments on the loan — including interest — to Ove Financial Corp., a mysterious company in the British Virgin Islands.
For those rights, Ove paid $1.
But the money trail didn’t end there.
The same day, Ove reassigned its rights to collect on the loan to a Panama company called International Media Overseas.
It too paid $1.
In the space of 24 hours the loan had, on paper, traversed three countries, two banks and four companies, making the money all but untraceable in the process.
Close
allies of Russian President Vladimir Putin make extensive use of
offshore holdings to shuffle large sums of money. Photo: AP Photo /
Krill KudryavtsevInternational Media Overseas, where rights to the interest payments from the $200 million appear to have landed, was controlled, on paper, by one of Putin’s oldest friends, Sergey Roldugin, a classical cellist who is godfather to Putin’s eldest daughter.
The $200 million loan was one of dozens of transactions totaling at least $2 billion found in the Mossack Fonseca files involving people or companies linked to Putin. They formed part of a Bank Rossiya enterprise that gained indirect influence over a major shareholder in Russia’s biggest truck maker and amassed secret stakes in a key Russian media property.
Suspicious payments made by Putin’s cronies may have in some cases been designed as payoffs, possibly in exchange for Russian government aid or contracts. The secret documents suggest that much of the loan money originally came from a bank in Cyprus that at the time was majority owned by the Russian state-controlled VTB Bank.
In a media conference call last week, Putin spokesman Dmitry Peskov said the government wouldn’t reply to “honey-worded queries” from ICIJ or its reporting partners, because they contain questions that “have been asked hundreds of times and answered hundreds of times.”
Peskov added that Russia has “available the full arsenal of legal means in the national and international arena to protect the honor and dignity of our president.”
Under national laws and international agreements, firms like Mossack Fonseca that help create companies and bank accounts are supposed to be on the lookout for clients who may be involved in money laundering, tax evasion or other wrongdoing. They are required to pay special attention to “politically exposed persons” — government officials or their family members or associates. If someone is a “PEP,” the middlemen creating their companies are expected to review their activities carefully to make sure they are not engaging in corruption.
Mossack Fonseca told ICIJ that it has “duly established policies and procedures to identify and handle those cases where individuals” qualify as PEPs.
Often, Mossack Fonseca appeared not to realize who its customers were. A 2015 internal audit found that the law firm knew the identities of the real owners of just 204 of 14,086 companies it had incorporated in Seychelles, a tax haven in the Indian Ocean.
British Virgin Islands authorities fined Mossack Fonseca $37,500 for violating anti-money-laundering rules because the firm incorporated a company for the son of former Egyptian President Hosni Mubarak but failed to identify the connection, even after the father and son were charged with corruption in Egypt. An internal review by the law firm concluded, “our risk assessment formula is seriously flawed.”
In all, an ICIJ analysis of the Mossack Fonseca files identified 61 family members and associates of prime ministers, presidents or kings.
Family members of at least eight current or former members of China’s Politburo Standing Committee, the country’s main ruling body, have offshore companies arranged though Mossack Fonseca. They include President Xi’s brother-in-law, who set up two British Virgin Islands companies in 2009.
Representatives for the Azeri, Pakistani and Chinese leaders did not respond to requests for comment.
The list of world leaders who used Mossack Fonseca to set up offshore entities includes the current president of Argentina, Mauricio Macri, who was director and vice president of a Bahamas company managed by Mossack Fonseca when he was a businessman and the mayor of Argentina’s capital, Buenos Aires. A spokesman for Macri said the president never personally owned shares in the firm, which was part of his family’s business.
During the bloodiest days of Russia’s 2014 invasion of the Ukraine’s Donbas region, the documents show, representatives of Ukrainian leader Petro Poroshenko scrambled to find a copy of a home utility bill for him to complete the paperwork to create a holding company in the British Virgin Islands.
A spokesperson for Poroshenko said the creation of the company had nothing to do with “any political and military events in Ukraine.” Poroshenko’s financial advisers said the president didn’t include the BVI firm in his 2014 financial disclosures because neither the holding company nor two related companies in Cyprus and the Netherlands have any assets. They said that the companies were part of a corporate restructuring to help sell Poroshenko’s confectionery business.
When Sigmundur David Gunnlaugsson became Iceland’s prime minister in 2013 he concealed a secret that could have damaged his political career. He and his wife shared ownership in an offshore company in the British Virgin Islands when he entered parliament in 2009. He sold his stake in the company months later to his wife for $1.
The company held bonds originally worth millions of dollars in three giant Icelandic banks that failed during the 2008 global financial crash, making it a creditor in their bankruptcies. Gunnlaugsson’s government negotiated a deal with creditors last year without disclosing his family’s financial stake in the outcome.
Gunnlaugsson has denied in recent days that his family’s financial interests influenced his stances. The leaked records do not make it clear whether Gunnlaugsson’s political positions benefited or hurt the value of the bonds held through the offshore company.
Iceland Prime Minister Sigmundur David Gunnlaugsson and his wife Anna Sigurlaug Pálsdóttir.Four days later, his wife took the matter public, posting a note on Facebook asserting that the company was hers, not his, and that she had paid all taxes on it.
Since then, members of Iceland’s parliament have questioned why Gunnlaugsson never disclosed the offshore company, with one lawmaker calling for the prime minister and his government to resign.
The prime minister has fought back, putting out an eight-page statement arguing he wasn’t required to publicly report his connection to Wintris because it was really owned by his wife and because it was “merely a holding company, not a company engaged in commercial activities.”
Offshore cover-ups
In 2005, a tour boat called the Ethan Allen sank in New York’s Lake George, drowning 20 elderly tourists. After the survivors and families of the dead sued, they learned the tour company had no insurance because fraudsters had sold it a fake policy.Malchus Irvin Boncamper, an accountant on the Caribbean island of St. Kitts, pleaded guilty in a U.S. court in 2011 to helping the con artists launder proceeds of their frauds.
The Ethan Allen tour boat brought to the surface after sinking in Lake George, New York. Photo: AP Photo / Mary AltafferThe Boncamper case is one of the examples in the leaked files showing the law firm using questionable tactics to hide its own methods or its customers’ activities from legal authorities.
In the “Operation Car Wash” case in Brazil, prosecutors allege that Mossack Fonseca employees destroyed and hid documents to mask the law firm’s involvement in money laundering. A police document says that, in one instance, an employee of the firm’s Brazil branch sent an email instructing co-workers to hide records involving a client who may have been the target of a police investigation: “Do not leave anything. I will save them in my car or at my house.”
In Nevada, the leaked files show, Mossack Fonseca employees worked in late 2014 to obscure the links between the law firm’s Las Vegas branch and its headquarters in Panama in anticipation of a U.S. court order requiring it to turn over information on 123 companies incorporated by the law firm. Argentine prosecutors had linked those Nevada-based companies to a corruption scandal involving an associate of former presidents Néstor Kirchner and Cristina Fernández de Kirchner.
In an effort to free itself from the American court’s jurisdiction, Mossack Fonseca claimed that its Las Vegas office, MF Nevada, wasn’t in fact a branch office at all. It said it had no control over the office.
The firm’s internal records show the opposite. They indicate that the firm controlled MF Nevada’s bank account and the firm’s co-founders and another Mossack Fonseca official owned 100 percent of MF Nevada.
To erase evidence of the connection, the law firm arranged to remove paper documents from the branch and worked to delete computer traces of the link between the Nevada and the Panama operations, internal emails show. One big worry, an internal email said, was that the branch’s manager might be too “nervous” to carry out the effort, making it easy for investigators to discover “that we are hiding something.”
A sign for MF Corporate Services outside a buisness complex in Las Vegas, Nevada. Photo: McClatchy / Ronda ChurchillReforming the secret world
In 2013, U.K. leader David Cameron urged his country’s overseas territories — including the British Virgin Islands — to work with him to “get our own houses in order” and join the fight against tax evasion and offshore secrecy.He could have looked no further than his late father to see how challenging that would be.
Ian Cameron, a stockbroker and multimillionaire, was a Mossack Fonseca client who used the law firm to shield his investment fund, Blairmore Holdings, Inc., from U.K. taxes.
The fund’s name came from Blairmore House, his family’s ancestral country estate. Mossack Fonseca registered the investment fund in Panama even though many of its key investors were British. Ian Cameron controlled the fund from its birth in 1982 until his death in 2010.
A prospectus for investors said the fund “should be managed and conducted so that it does not become resident in the United Kingdom for United Kingdom taxation purposes.”
The fund did this by using untraceable certificates of ownership known as “bearer shares” and by employing “nominee” company officers based in the Bahamas, the law firm’s leaked records show.
Ian Cameron’s tax-haven history is an example of how deeply offshore secrecy is woven into the lives of political and financial elites around the world. It’s also an important economic engine for many countries. The weight of that self-interest has made reform difficult.
In the U.S., for example, states like Delaware and Nevada, which have allowed company owners to remain anonymous, continue to fight against efforts to require greater corporate transparency.
Mossack Fonseca’s home country, Panama, has refused to embrace a plan for worldwide exchange of information about bank accounts — out of concern that its offshore industry could be left at a competitive disadvantage. Panama officials say they will exchange information, but on a more modest scale.
The challenge that reformers and law enforcers face is how to find and stop criminal behavior when it’s buried beneath layers of secrecy. The most effective tool for breaking through this secrecy has been leaks of offshore documents that have dragged hidden dealings into the open.
Document leaks uncovered by ICIJ and its media partners have prompted legislation and official investigations in dozens of countries — and fanned fears among offshore customers who worry their secrets will be revealed.
In April 2013, after ICIJ released its “Offshore Leaks” stories based on confidential documents from the British Virgin Islands and Singapore, some Mossack Fonseca customers emailed the firm looking for reassurance that their offshore holdings were safe from scrutiny.
Mossack Fonseca told customers not to worry. It said its commitment to its clients’ privacy “has always been paramount, and in this regard your confidential information is stored in our state-of-the-art data center, and any communication within our global network is handled through an encryption algorithm that complies with the highest world-class standards.”
This story was reported and written by Bastian Obermayer , Gerard Ryle, Marina Walker Guevara, Michael Hudson, Jake Bernstein, Will Fitzgibbon, Mar Cabra, Martha M. Hamilton, Frederik Obermaier, Ryan Chittum, Emilia Diaz-Struck, Rigoberto Carvajal, Cécile Schilis-Gallego, Marcos Garcia Rey, Delphine Reuter, Matthew Caruana Galizia, Hamish Boland-Rudder, Miguel Fiandor and Mago Torres.