Four men have been criminally charged in the US government’s investigation into the findings of the Panama Papers, the leaked files from the offshore law firm Mossack Fonseca.
Prosecutors in New York said the four men, including an attorney and an investment manager who worked for the company, have been charged with wire fraud, tax fraud, money laundering, and other crimes.
The prosecutors said Mossack Fonseca perpetrated a “decades-long criminal scheme,” which was first exposed in a series of articles since 2015 by the Guardian and dozens of media partners around the world.
Geoffrey Berman, the US attorney in Manhattan, said in a statement on Tuesday that the four went to “extraordinary lengths to circumvent US tax laws” in order to boost the wealth of their clients.
“Now, their international tax scheme is over, and these defendants face years in prison for their crimes,” said Berman.
Those charged were Ramses Owens, a Panamanian attorney who worked for Mossack Fonseca; Dirk Brauer, an investment manager for a Mossack subsidiary; Richard Gaffey, a US-based accountant; and Harald Joachim von Der Goltz, a former US resident and Mossack client.
Von Der Goltz, an 81-year-old German citizen, was arrested in London on Monday, according to prosecutors, who thanked British authorities for their assistance in the case.
Brauer, 54, was arrested in Paris last month and Gaffey, 74, was arrested in Massachusetts on Tuesday. But Owens, 50, remains at large, US authorities said. The charges were unsealed on Tuesday. A court filing indicated that the men had been indicted in secret by a grand jury in September.
Investigators said Owens and Brauer had for years created and managed sham foundations, opaque offshore trusts and undeclared bank accounts to allow American clients of Mossack Fonseca to hide their income from US tax authorities.
Clients were then advised on how to illegally bring the funds from their offshore accounts into the US, using specially created debit cards and falsely claiming the money had come from the sale of companies.
Von Der Goltz, a German citizen who was allegedly one of the firm’s American-based clients, is accused of using shell companies to hide tens of millions of dollars from the IRS, and falsely claiming his Guatemalan mother was the true owner of his offshore holdings.
Gaffey is accused of assisting Von Der Goltz’s scheme and advising another American taxpayer, who is identified in Tuesday’s filings only as “Client 1”. Gaffey allegedly devised a system for this client to bring $3m of offshore funds into the US by falsely telling the IRS he had sold a company.
The indictments were announced less than a week after law enforcement officials in Frankfurt raided the offices of Deutsche Bank as part of a German investigation into alleged money laundering connected to the Panamanian scheme.
German authorities said that 170 police officers, prosecutors, and tax inspectors searched six Deutsche Bank offices around Frankfurt and seized files as part of their investigation into two bank employees who allegedly helped create offshore shell companies to help their clients launder money.
The decision to prosecute the case represented one of the most aggressive actions against white-collar crime so far by the Trump administration’s justice department.
Apart from some of the largest fraud cases in US history, such as the decision to indict the accountant Arthur Andersen in the wake of the Enron scandal, white-collar prosecutors have not always aggressively pursued people involved in money-laundering.
Brian Benczkowski, an assistant attorney general, said on Tuesday: “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.”
Although the case is being brought by the Trump administration, it appears to have been initiated in 2016, by Preet Bharara, who was then US attorney for the southern district of New York, nominated by Barack Obama.
Bharara opened a formal criminal investigation into wrongdoing exposed in the publication of the Panama Papers. Bharara sent a letter to the International Consortium of Investigative Journalists (ICIJ) at the time, asking to speak to reporters on the subject.