[BreachExchange] US Launches Criminal Inquiry Into 200 US Citizens Named In The Panama Papers

[Audrey McNeil]

http://www.forbes.com/sites/irswatch/2016/04/23/us-launches-criminal-inquiry-into-200-us-citizens-named-in-the-panama-papers/#110f70721ebc

The Panama Papers. A massive law firm data breach of otherwise secretive
financial information identifying numerous high-ranking government and
public officials around the world was recently disclosed online by the
International Consortium of Investigative Journalists. (ICIJ). Almost forty
years of confidential information from 1977 to December 2015 was somehow
obtained by an anonymous source from the internal database of Panama-based
law firm Mossack Fonseca & Co. and apparently includes approximately 11.46
million files comprising approximately 2.6 terabytes (the equivalent of
approximately 600 DVDs) of otherwise confidential financial data.

US Launches Criminal Inquiry into Several of the 200 US Citizens Named in
the Panama Papers. The ICIJ has now confirmed that it received an email
(published by theGuardian) from U.S. Attorney Preet Bharara for the
Southern SO -0.12% District of New York indicating that his office had
“opened a criminal investigation regarding matters to which the Panama
Papers are relevant.” Further, his office would greatly appreciate the
opportunity to speak as soon as possible with any ICIJ employee or
representative involved in the Panama Papers Project in order to discuss
this matter further.”

The Guardian reports that U.S. Attorney Preet Bharara has “led several
crusades against criminal wrongdoing in the financial sector, is already
investigating several of the more than 200 US citizens named in the papers.”

ICIJ Pushes Back.  ICIJ Director Gerard Ryle responded to prosecutors in
Preet Bharara’s office that it would not turn over unpublished data. “We
certainly welcome the U.S. Attorney’s Office reviewing all of the
information from the Panama Papers series that we have made available to
our readers and conducting its own investigation,” said ICIJ Director
Gerard Ryle. “However, ICIJ does not intend to play a role in that
investigation. Our focus is journalism.”

“ICIJ, and its parent organization the Center for Public Integrity, are
media organizations shielded by the First Amendment and other legal
protections from becoming an arm of law enforcement,” said ICIJ Director
Gerard Ryle.

ICIJ Will Name Names in May.  In early May ICIJ will release the names of
the more than 214,000 offshore entities incorporated by Mossack Fonseca and
the people connected to them (as beneficiaries, shareholders or directors).
The names – with links to more than 200 countries – will be added to the
Offshore Leaks database (published in 2013), which already contains more
than 100,000 companies that ICIJ obtained in a previous leak.

But ICIJ Will NOT Share the Panama Papers with Governments.  The
long-standing policy of ICIJ, and the parent organization, the Center for
Public Integrity, is not to turn over such material. The ICIJ is not an arm
of law enforcement and is not an agent of the government. Their statements
affirm they are an independent reporting organization, served by and
serving their members, the global investigative journalism community and
the public.

However . . . What About Mossack Fonseca? Although the ICIJ may not
cooperate with any government inquiries, Mosack Fonseca has indicated that
“Due to recent events that have taken place in our office in Panama, we
would like to offer the following statement: ‘We have a long history of
working proactively with relevant authorities in various jurisdictions when
questions are raised and additional information is required, and in many
cases we’re the ones who actually initiate that contact when suspicious
activities are detected. In this case, we’re the ones against whom a crime
has been committed. Our systems having been unlawfully breached by parties
external to the firm. As we’ve always done over nearly 40 years of doing
business, we stand ready, willing and eager to cooperate with authorities
again on their latest investigations to ensure this situation is brought to
a just conclusion.’ ”

What About You? Anyone, located anywhere, who is potentially impacted by
the public release of the Panama Papers should consider immediately
contacting competent, experienced counsel. Although ICIJ reported that the
Panama Papers were not purchased, there are some reports this information
has been sold to the German tax authorities and may have been offered to
tax authorities in the United Kingdom, the United States and elsewhere.

U.S. individuals (citizens or legal residents) should contact competent tax
counsel. The failure to declare certain interests in foreign financial
accounts and assets can potentially bring about significant civil penalties
and, in egregious situations, the possibility of criminal problems. Concern
is not limited to those having some possibly remote link to the Panama
Papers. Leaks of perceived confidential information from an internal data
base of a law firm, trust company, financial institution or otherwise can
occur at anytime, anywhere in the world.

If you may have any potentially undisclosed interest in any foreign
financial accounts or assets, get in touch with competent, experienced
counsel to immediately determine if you should be concerned. The Panama
Papers investigation by the ICIJ represents the largest media collaboration
ever undertaken. Most individuals (and their professional advisors) will
sleep better if they get it right, somehow get into compliance and move on
in life. Waiting is simply not a viable option.
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