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Mossack Fonseca offices raided by organised crime investigators in Panama Mossack Fonseca raided as investigators meet in Paris to launch tax probe
(about 1 hour later)
Organised crime prosecutors raided the offices of the Mossack Fonseca law firm on Tuesday looking for evidence of money laundering and financing terrorism following a leak of documents about tax havens it set up for wealthy international clients. The offices of the firm at the centre of the Panama Papers revelations were raided by police officers on Tuesday as investigators prepared to meet in Paris to launch an unprecedented inquiry into global tax evasion.
A half dozen police officers set up a perimeter around the offices while prosecutors searched inside for documents. Shortly after news reports based on a trove of documents from the firm began emerging more than a week ago, Panama’s government had said it would investigate. Panama’s attorney general ordered the raid on the Panamanian offices of Mossack Fonseca in an attempt to “establish the use of the firm for illicit activities”.
Police entered the company’s building under the command of the prosecutor Javier Caravallo, who specialises in organised crime and money laundering.
The raid comes after the leak of Mossack Fonseca’s huge database provoked international concern about the offshore industry. It occurred on the eve of a meeting in Paris of senior officials from the world’s tax authorities, who are intent on analysing the documents as part of new global strategy to crack down on offenders.
The aggressive new approach is being led by the Joint International Tax Shelter Information and Collaboration (Jitsic) network, of which the UK is a leading member.
A spokesman for Her Majesty’s Revenue and Customs (HMRC) confirmed that it would be sending delegates to the Paris conference.
Jitsic’s chairman, Chris Jordan, has previously spoken of establishing a “global mindset for tackling tax evasion and aggressive tax avoidance”.
Jordan, who is Australia’s tax commissioner, has established a reputation for his direct approach to multinational companies over their tax affairs.
The meeting in Paris will be chaired by the Australian tax office’s head of international tax, Mark Konza.
Related: Mossack Fonseca: inside the firm that helps the super-rich hide their moneyRelated: Mossack Fonseca: inside the firm that helps the super-rich hide their money
The attorney general’s office said in a statement that the objective of the raid was “to obtain documentation linked to the information published in news articles that establish the use of the firm in illicit activities.” Mossack Fonseca has denied any wrongdoing, saying it only set up offshore financial accounts and anonymous shell companies for clients and was not involved in how those accounts were used.
Mossack Fonseca has denied any wrongdoing, saying it only set up offshore financial accounts and anonymous shell companies for clients and was not involved in how those accounts were used. Co-founder Roman Fonseca told The Associated Press on Tuesday that the firm was preparing a statement. On Monday intellectual property prosecutors visited Mossack Fonseca to investigate the firm’s claim that its computers were hacked before the leak.
The search came a day after intellectual property prosecutors visited Mossack Fonseca to follow up on the firm’s allegations that a computer hack led to the leak of millions of documents about tax havens. “Finally the real criminals are being investigated,” Roman Fonseca, the firm’s founding partner, told AP. He has yet to comment on the attorney general’s raid.
The firm filed a complaint charging the security breach shortly before the first media reports working with the documents offered details on how politicians, celebrities and companies around the globe were hiding assets in offshore accounts and shell companies. The Panama-based firm is the world’s fourth biggest offshore law firm. It specialises in incorporating companies in offshore jurisdictions such as the British Virgin Islands.
“Finally the real criminals are being investigated,” Fonseca said in a message to the AP on Monday. Panama’s president, Juan Carlos Varela, has defended the country’s financial sector, which is considered vital to the country’s economy. But Varela has also promised the international community that he is willing to make reforms to make the sector more transparent.
Fonseca has maintained that the only crime which can be taken from the leak was the computer hack itself. He has said he suspects the hack originated outside Panama, possibly in Europe, but has not given any details. On Tuesday he met legal, banking and business professional associations and asked France to reconsider its decision to place Panama on a list of uncooperative countries in financial information.
The law firm is one of the most important in the world for creating overseas front companies. The Panama government announced that Joseph Stiglitz, who won the Nobel prize in economics in 2001, would be one member of an international panel formed to review Panama’s legal and financial practices and recommend improvements.
Panamanian President Juan Carlos Varela has defended the country’s financial sector, which is considered of strategic importance for the economy. But Varela has also promised the international community that he is willing to make reforms to make the sector more transparent. Last week the UN’s independent expert on foreign debt and human rights, Juan Pablo Bohoslavsky, stressed the need to end tax secrecy.
On Tuesday, Varela met with legal, banking and business professional associations. Afterward, he asked France to reconsider its decision to place Panama on a list of uncooperative countries in financial information. “Tax evasion destroys trust in public institutions and the rule of law, and shrinks the fiscal space for investing in public healthcare, education, social security and other goods and services,” he said.
The government announced that Joseph Stiglitz, who won the Nobel Prize in economics in 2001, would be one member of an international panel formed to review Panama’s legal and financial practices and recommend improvements. “Public funds that are essential to guarantee economic, social and cultural rights to all are robbed from the people.”