INVESTIGATIONS

Four Defendants Charged in Panama Papers Investigation for Their Roles in Panamanian-Based Global Law Firm’s Decades-Long Scheme to Defraud the United States

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Four individuals have been charged in an indictment unsealed today in the Southern District of New York with wire fraud, tax fraud, money laundering and other offenses in connection with their alleged roles in a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian-based global law firm, and related entities.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, Chief Don Fort of IRS Criminal Investigation (IRS-CI), and Special Agent in Charge Angel M. Melendez of U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations (HSI) New York made the announce­ment today.

Ramses Owens, 50, a Panamanian cit­i­zen; Dirk Brauer, 54, a German cit­i­zen; Richard Gaffey, 74, a U.S. cit­i­zen, of Medfield, Massachusetts; and Harald Joachim Von Der Goltz, 81, a German cit­i­zen, have been charged in an 11-count indict­ment.  Owens, Gaffey and Von Der Goltz are charged with one count of con­spir­a­cy to com­mit tax eva­sion, one count of wire fraud, and one count of mon­ey laun­der­ing con­spir­a­cy.  Owens and Brauer have been charged with one count of con­spir­a­cy to defraud the United States and one count of con­spir­a­cy to com­mit wire fraud.  Gaffey and Von Der Goltz are addi­tion­al­ly charged with four counts of will­ful fail­ure to file an FBAR.  Von Der Goltz has been addi­tion­al­ly charged with two counts of mak­ing false state­ments.

Three of the four defen­dants named in the indict­ment have been arrest­ed.  Brauer, who worked as an invest­ment man­ag­er for Mossfon Asset Management, S.A. (“Mossfon Asset Management”), an asset man­age­ment com­pa­ny close­ly affil­i­at­ed with Mossack Fonseca, was arrest­ed in Paris, France, on Nov. 15.  Von Der Goltz, a for­mer U.S. res­i­dent and tax­pay­er, was arrest­ed in London, United Kingdom, on Dec. 3.  Gaffey, a U.S.-based accoun­tant, was arrest­ed in Boston, Massachusetts ear­li­er today.  Owens, a Panamanian attor­ney who worked for Mossack Fonseca, remains at large.   

Law firms, asset man­agers, and accoun­tants play key roles enabling entry into the glob­al finan­cial sys­tem,” said Assistant Attorney General Benczkowski.  “The charges announced today demon­strate our com­mit­ment to pros­e­cute pro­fes­sion­als who facil­i­tate finan­cial crime across inter­na­tion­al bor­ders and the tax cheats who uti­lize their ser­vices.” 

As alleged, these defen­dants went to extra­or­di­nary lengths to cir­cum­vent U.S. tax laws in order to main­tain their wealth and the wealth of their clients,” said Manhattan U.S. Attorney Berman.  “For decades, the defen­dants, employ­ees and a client of glob­al law firm Mossack Fonseca alleged­ly shuf­fled mil­lions of dol­lars through off­shore accounts and cre­at­ed shell com­pa­nies to hide for­tunes.  In fact, as alleged, they had a play­book to repa­tri­ate un-taxed mon­ey into the U.S. bank­ing sys­tem.  Now, their inter­na­tion­al tax scheme is over, and these defen­dants face years in prison for their crimes.”

The unseal­ing of this indict­ment sends a clear mes­sage that IRS-CI is active­ly engaged in inter­na­tion­al tax enforce­ment, and more inves­ti­ga­tions are on the way,” said IRS-CI Chief Don Fort.  “IRS-CI spe­cial­izes in unrav­el­ing these intri­cate off­shore tax schemes and fol­low­ing the mon­ey around the globe wher­ev­er it may lead.  Cases like this help main­tain the public’s con­fi­dence in our tax sys­tem by let­ting them know that we inves­ti­gate and pros­e­cute those who evade their tax oblig­a­tion.”

Today we announce the indict­ment of four indi­vid­u­als who alleged­ly defraud­ed the U.S. gov­ern­ment through a large scale, inter­con­ti­nen­tal mon­ey laun­der­ing and wire fraud scheme, asso­ci­at­ed with Mossack Fonseca and its affil­i­ates,” said HSI Special Agent-in-Charge Angel M. Melendez.  “HSI’s El Dorado Task Force, togeth­er with the IRS, built a case that uncov­ered an alleged com­plex trail of off­shore shell cor­po­ra­tions and bogus foun­da­tions used to dis­guise the ben­e­fi­cial own­er­ship of huge amounts of mon­ey.  These efforts reflect the com­mit­ment of U.S. law enforce­ment to fol­low that trail and appre­hend these crim­i­nals regard­less of where they are in the world.”

According to the indict­ment, from at least in or about 2000 through in or about 2017, Owens and Brauer con­spired with oth­ers to help U.S. tax­pay­er clients of Mossack Fonseca con­ceal assets and invest­ments, and the income gen­er­at­ed by those assets and invest­ments, from the IRS through fraud­u­lent, deceit­ful, and dis­hon­est means.  To con­ceal their clients’ assets and income from the IRS, Owens and Brauer alleged­ly worked to estab­lish and man­age opaque off­shore trusts and unde­clared bank accounts on behalf of U.S. tax­pay­ers who were clients of Mossack Fonseca.  Owens and Brauer alleged­ly mar­ket­ed, cre­at­ed, and ser­viced sham foun­da­tions and shell com­pa­nies formed under the laws of coun­tries such as Panama, Hong Kong, and the British Virgin Islands, to con­ceal from the IRS and oth­ers the own­er­ship by U.S. tax­pay­ers of accounts estab­lished at over­seas banks, as well as the income gen­er­at­ed in those accounts.  As struc­tured by Mossack Fonseca, the sham foun­da­tions typ­i­cal­ly “owned” the shell com­pa­nies that nom­i­nal­ly held the unde­clared assets on behalf of the U.S. tax­pay­er clients of Mossack Fonseca.  The names of Mossack Fonseca’s clients gen­er­al­ly did not appear any­where on the incor­po­ra­tion paper­work for the sham foun­da­tions or relat­ed shell com­pa­nies, although the clients in fact ben­e­fi­cial­ly owned, and had com­plete access to, the assets of those sham enti­ties and accounts.

In fur­ther­ance of the scheme, and in exchange for addi­tion­al fees, Owens and Brauer alleged­ly pro­vid­ed sup­port to clients who had pur­chased the sham foun­da­tions and relat­ed shell com­pa­nies by pro­vid­ing cor­po­rate meet­ing min­utes, res­o­lu­tions, mail for­ward­ing, and sig­na­ture ser­vices.  Moreover, Owens and Brauer are alleged to have pur­pose­ful­ly estab­lished the bank accounts in loca­tions with strict bank secre­cy laws, which imped­ed the abil­i­ty of the United States to obtain bank records for the accounts.  Owens and Brauer also alleged­ly instruct­ed U.S. tax­pay­er clients of Mossack Fonseca about how to repa­tri­ate funds to the United States from their off­shore bank accounts in a man­ner designed to keep the unde­clared bank accounts con­cealed.  Among oth­er things, Owens and Brauer instruct­ed clients to use deb­it cards and fic­ti­tious sales to repa­tri­ate their funds covert­ly, the indict­ment alleges.

Von Der Goltz was alleged­ly one of Mossack Fonseca’s U.S. tax­pay­er clients.  At all rel­e­vant times, Von Der Goltz was a U.S. res­i­dent and was sub­ject to U.S. tax laws, which required him to report and pay income tax on world­wide income, includ­ing income and cap­i­tal gains gen­er­at­ed in domes­tic and for­eign bank accounts.  U.S. cit­i­zens, res­i­dent aliens, and per­ma­nent legal res­i­dents with a for­eign finan­cial inter­est in or sig­na­to­ry author­i­ty over a for­eign finan­cial account worth more than $10,000 are required to file a Report of Foreign Bank and Financial Accounts, com­mon­ly known as an FBAR, dis­clos­ing the account.  Von Der Goltz is alleged to have evad­ed his tax report­ing oblig­a­tions by set­ting up a series of shell com­pa­nies and bank accounts, and hid­ing his ben­e­fi­cial own­er­ship of the shell com­pa­nies and bank accounts from the IRS.  These shell com­pa­nies and bank accounts alleged­ly made invest­ments total­ing tens of mil­lions of dol­lars.  According to the indict­ment, Von Der Goltz was assist­ed in this scheme by Owens and by Gaffey, a part­ner at a U.S.-based account­ing firm.  In fur­ther­ance of Von Der Goltz’s fraud­u­lent scheme, Von Der Goltz, Gaffey, and Owens are alleged to have false­ly claimed that Von Der Goltz’s elder­ly moth­er was the sole ben­e­fi­cial own­er of the shell com­pa­nies and bank accounts at issue because, at all rel­e­vant times, she was a Guatemalan cit­i­zen and res­i­dent, and — unlike Von Der Goltz — was not a U.S. tax­pay­er. 

As alleged in the indict­ment, Gaffey, in addi­tion to assist­ing Von Der Goltz evade U.S. income tax­es and report­ing require­ments, also worked close­ly with Owens to help anoth­er U.S. tax­pay­er client (“Client‑1”) of Mossack Fonseca defraud the IRS.  Client‑1 alleged­ly main­tained a series of off­shore bank accounts, which Mossack Fonseca helped Client‑1 con­ceal from the IRS for years.    The indict­ment fur­ther alleges that, upon the advice of Owens and Gaffey, Client‑1 covert­ly repa­tri­at­ed approx­i­mate­ly $3 mil­lion of Client‑1’s off­shore mon­ey to the United States by false­ly stat­ing on Client‑1’s fed­er­al tax return that the mon­ey rep­re­sent­ed pro­ceeds from the sale of a com­pa­ny.  After Client‑1 repa­tri­at­ed approx­i­mate­ly $3 mil­lion in this man­ner, approx­i­mate­ly $1 mil­lion still remained in Client‑1’s off­shore account, the exis­tence of which remained hid­den from the IRS.  

The charges in the indict­ment are mere­ly alle­ga­tions, and the defen­dants are pre­sumed inno­cent until proven guilty beyond a rea­son­able doubt in a court of law. 

The inves­ti­ga­tion was con­duct­ed by IRS-CI and HSI with sig­nif­i­cant assis­tance by the Justice Department’s Tax Division and the FBI.  The Justice Department’s Office of International Affairs and law enforce­ment part­ners in France and the United Kingdom secured the arrests of the defen­dants locat­ed over­seas.                                                                                                                                                                                                                                                                                                                                                                                                                                                    

This case is being pros­e­cut­ed by Trial Attorneys Michael Parker and Parker Tobin of the Criminal Division’s Money Laundering and Asset Recovery Section of the Justice Department and Assistant U.S. Attorneys Sarah E. Paul, Nathan Rehn, Kristy Greenberg and Andrew Adams of the Manhattan U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, with sub­stan­tial sup­port from pre­vi­ous co-coun­sel, Assistant U.S. Attorney Ann Marie Blaylock of the Western District of Kentucky.

Four Defendants Charged in Panama Papers Investigation for Their Roles in Panamanian-Based Global Law Firm’s Decades-Long Scheme to Defraud the United States

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