U.S. prosecutors announced Tuesday that they have charged four people with taking part in a decades-long scheme to evade U.S. taxes that came to light after a massive leak of offshore financial data known as the “Panama Papers.”
Three of the four people have already been arrested, prosecutors said, in the first criminal case brought by U.S. authorities in connection with Mossack Fonseca & Co, the Panamanian law firm at the centre of the leak.
Harald Joachim von der Goltz, a client of the firm, was arrested in London on Monday; Dirk Brauer, an employee of an asset management company closely tied to the firm, was arrested in Paris on Nov. 15; and Richard Gaffey, a U.S.-based accountant, was arrested in Massachusetts on Tuesday, according to prosecutors.
The fourth defendant, Ramses Owens, was a lawyer at Mossack Fonseca and remains at large, prosecutors said. The law firm shut down earlier this year.
Bill Lovett, a lawyer for Gaffey, could not immediately be reached for comment. Lawyers for the other three defendants could not immediately be identified.
The most serious charges in the case, which include wire fraud and money laundering conspiracy, carry a maximum sentence of 20 years in prison.
In an indictment unsealed in Manhattan federal court, prosecutors said that from 2000 to 2017, Owens and Brauer conspired to help clients of Mossack Fonseca conceal assets, investments and income from U.S. tax authorities, using sham foundations and shell companies formed under the law of countries including Panama, Hong Kong and the British Virgin Islands. Owens, 50, is a citizen of Panama and Brauer, 54, is German citizen, prosecutors said.
One of those clients was von Der Goltz, an 81-year-old German citizen, according to the indictment. Prosecutors said that Owens and Gaffey helped von Der Goltz avoid taxes by creating shell companies and bank accounts that he falsely claimed were solely owned by his elderly mother, a Guatemalan citizen who did not pay U.S. taxes.
Prosecutors also said that Gaffey, a 74-year-old U.S. citizen, helped another unnamed client of the Mossack Fonseca conceal offshore bank accounts from U.S. authorities.
The “Panama Papers,” which consist of millions of documents from Mossack Fonseca, were leaked to the media in April 2016.
A review of the documents also prompted German authorities to raid the offices of Deutsche Bank AG and its board members as part of a money laundering investigation last week.