PANAMA’S SHADOW ECONOMY: Mossack Fonseca’s Role in Facilitating Financial Crime and Corruption
The Leaked Records
Documents leaked from the files of Panama-based law firm Mossack Fonseca have revealed the company’s involvement in facilitating financial crime and corruption. The records, which were obtained through a series of investigations, shed light on the complex web of relationships between law firms, banks, and other middlemen involved in laundering money and evading taxes.
The Brink’s-Mat Robbery
One notable case highlighted by the leaked records is the 1983 Brink’s-Mat robbery at London’s Heathrow Airport. Six thieves stole nearly 7,000 gold bars, diamonds, and cash, with much of the loot never recovered. However, Mossack Fonseca may have helped the conspirators keep their spoils out of the hands of authorities.
- Protection of a shell company: The law firm set up a Panama shell company called Feberion Inc., which was used to manage the proceeds of the heist.
- Evading U.K. police: Despite being aware that the company was involved in laundering money from the Brink’s-Mat theft, Mossack Fonseca took steps to prevent U.K. police from gaining control of the company.
Global Network of Offshore Operations
The leaked records reveal that Mossack Fonseca worked with big banks and law firms in places like The Netherlands, Mexico, the United States, and Switzerland, helping clients move money or slash their tax bills. The firm has set up thousands of offshore companies, foundations, and trusts for customers, often using anonymous entities to disguise the origins of dirty money.
- Anonymity and secrecy: Critics argue that Mossack Fonseca’s use of anonymous entities is a symptom of a broader problem with offshore secrecy.
- Global financial hub: As Panama seeks to maintain its reputation as a global financial hub, concerns about offshore secrecy and money laundering continue to grow.
Criticism and Defense
Mossack Fonseca has faced criticism for its role in facilitating financial crime and corruption. However, the company maintains that it follows all applicable laws and regulations.
- Robert Mazur’s assessment: Robert Mazur, a former U.S. drug agent and author of “The Infiltrator”, says that Mossack Fonseca and other offshore operatives are essential to the success of criminal organizations.
- Company response: Mossack Fonseca has defended its practices, suggesting that it is committed to following both the letter and spirit of the law.
Conclusion
The leaked records from Mossack Fonseca’s files have shed light on the complex web of relationships between law firms, banks, and other middlemen involved in facilitating financial crime and corruption. As Panama seeks to maintain its reputation as a global financial hub, concerns about offshore secrecy and money laundering continue to grow.