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The Panama Papers: A Look at the Possible Repercussions

Offshore Account Update

Posted on April 15, 2016 |

Recently, a secretive law firm in Panama with a long history of representing some of the world's most powerful and wealthy people had its records leaked. More than 11 million records were released. These records are being called the Panama Papers and they are being reviewed by 107 different media organizations spread across 76 countries. They are likely also being subject to close scrutiny by taxing authorities within multiple countries worldwide. 

The leaked records track the day-to-day transactions that allegedly took place at the firm, Mossack Fonseca. The documents purportedly show the law firm helping clients worldwide to evade international laws aimed at preventing tax evasion and money laundering.  The information contained within the documents could provide an unprecedented look into how money moves around offshore and how people with offshore investments avoid having their accounts come to the attention of taxing authorities.

Information contained within the Panama Papers could not only lead to taxing authorities taking action against people whose information was revealed due to the leak but could also give more insight into how tax evasion takes place -- which is helpful to investigators in other cases as well.

Anyone with offshore funds should be aware that the Panama Papers present a potential risk, if for no other reason than the Papers will bring increased scrutiny to the offshore banking industry. A Boston criminal tax lawyer can provide insight into options for those with undeclared offshore funds who are concerned about taxing authorities coming after them.

The Panama Papers Change Offshore Investments Forever

The scope of the leak and the unprecedented insider look into how money laundering and tax evasion have worked with offshore accounts has prompted the director of the International Consortium of Investigative Journalists (ICIJ) to refer to the leaked documents as “probably the biggest blow the offshore world has ever taken because of the extent of the documents.” 

The BBC reports that the Panama Papers have already shown at least 60 people with ties to world leaders engaging in tax evasion and/or money laundering. Examples include individuals with a close relationship with Vladimir Putin, as well as the Prime Minister of Iceland who failed to reveal his personal financial connection with failing banks in his country. 

The papers also revealed an interaction with a millionaire U.S. life coach in which Mossack Fonseca reportedly offered to obscure ownership of accounts by using a natural person to act as the beneficial owner whose name would be disclosed instead of the actual account owner.

More revelations are likely to occur as researchers continue to review the 11 million leaked documents. The law firm has released a statement indicating it had never been charged with or accused of wrongdoing over 80 years, but the documents may reveal that the firm did play a substantial role in tax evasion efforts.

The information within the Panama Papers regarding how transactions were facilitated could prove invaluable to investigators who seek to trace transactions and uncover methods used to evade taxes. Anyone with offshore accounts could thus find themselves facing an investigation by taxing authorities who have an increasingly comprehensive picture of the shadowy world of offshore banking. Attorney Kevin Thorn can help those who become the target of an investigation.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989

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