13/02/17

Panama Papers law firm partners arrested

Jurgen Mossack and Ramón Fonseca, the founding partners of the law firm at the epicenter of the Panama Papers documents leak scandal, have been arrested by Panamanian authorities on suspicion of money laundering, reports Caribbean News Now.

Panama attorney Edison Teano, another partner at the firm of Mossack and Fonseca, was also detained for questioning by the authorities. Teano is said to have been involved in the use of Panamanian corporations to hide bribes received by members of a Brazilian political party. He is also being investigated for money laundering, according to published reports in Panama.

A judge has ordered pre-trial detention for all, to prevent their flight out of the country to avoid prosecution. 

The role played by a number of lesser known attorneys at the Mossack Fonseca firm has thus far escaped media attention. Many of the firm’s lawyers are seeking to avoid scrutiny by quietly moving to Panama City law firms, apparently hoping to escape being charged with money laundering. 

Whether Panamanian authorities will move against them is not known, but there are no real disciplinary agencies in Panama to control attorney misconduct, unless prosecutors arrest them.

In the meantime, additional search warrants have been executed by investigators, including at law firms that now employ former Mossack Fonseca attorneys that have already left the firm.

In what has been described as possibly the most extreme example of tax haven hubris, the staff of Mossack and Fonseca, exposed by the Panama Papers as a global facilitator of drug money laundering, corruption, tax evasion, and every type of financial crime imaginable, were out in the streets on Saturday, protesting the arrest, detention and interrogation of the firm’s partners.

On another front, an independent commission has been set up with a mandate to investigate Panamanian President Juan Carlos Varela regarding allegations of corruption in the expanding Odebrecht scandal. 

He is now believed to have accepted many millions of dollars to approve major government contracts for the Brazilian construction giant. 

Finally, the Superintendent of Banking has taken over the Panama office of the Brazilian bank, FPB Bank, Inc., over allegations that the bank was involved in the Brazilian Lava Jato (Car Wash) scandal, in which lucrative contracts for the government oil entity, Petrobras were obtained through bribery.

More than 50 Brazilian politicians, including those at the highest level, have been implicated. In the bank's Panama operation, there was reportedly a total and complete lack of any ‘know your customer’ procedures regarding accounts opened for foreigners, and that FPB was a conduit for laundering corrupt payments.