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Documents tie offshore holdings to law firm with Las Vegas office

BERLIN — An international coalition of media outlets on Sunday published what it said was an extensive investigation into the offshore financial dealings of the rich and famous, based on a vast trove of documents provided by an anonymous source.

The nonprofit International Consortium of Investigative Journalism also delves into a court case involving a Las Vegas subsidiary of a Panamanian law firm whose internal documents are at the center of the organization’s larger investigation.

The Washington, D.C.-based group’s wider investigation focuses on a cache of 11.5 million records detailed the offshore holdings of a dozen current and former world leaders, as well as businessmen, criminals, celebrities and sports stars.

The consortium also delves into a court case involving a Las Vegas subsidiary of a Panamanian law firm whose internal documents are at the center of the organization’s larger investigation.

The Associated Press wasn’t immediately able to verify allegations made in articles that were published by the more than 100 news organizations around the world involved in the investigation.

However, the German newspaper Sueddeutsche Zeitung, which first received the data more than a year ago, said it was confident the material was genuine.

The Munich-based daily was offered the data through an encrypted channel by an anonymous source who requested no monetary compensation and asked only for unspecified security measures, said Bastian Obermayer, a reporter for the paper.

The data concerned internal documents from a Panama-based law firm, Mossack Fonseca. Founded by German-born Juergen Mossack, the firm has offices across the globe and is among the world’s biggest creators of shell companies, the Munich newspaper said.

In the Las Vegas case, NML Capital Ltd., a bondholder that claims Argentina owes it $1.7 billion, went to federal court two years ago to obtain information about the 123 Nevada companies set up by Mossack Fonseca and its Las Vegas subsidiary, MF Corporate Services, according to court documents reviewed Sunday by the Las Vegas Review-Journal, which is not part of the journalism consortium.

The litigation was part of NML Capital’s efforts to retrieve the millions of dollars allegedly laundered through the Nevada companies.

Last year, in a 27-page order, U.S. Magistrate Judge Cam Ferenbach supported NML Capital’s effort, ordering MF Corporate Services to provide key information and records to NML Capital.

Ferenbach referred to allegations swirling in Argentina and in the Las Vegas litigation that the laundered money was tied to political insiders close to Argentina’s former presidents, Cristina Fernandez de Kirchner and her husband, Nestor Kirchner.

Some of the money was allegedly funneled back to the Kirchners, Ferenbach wrote in his order.

A story on the consortium’s website also alleges the firm sought to remove potentially damaging records from phones and computers at the Las Vegas subsidiary to hide client information details from the U.S. justice system. It notes that Mossack Fonseca “categorically” denied hiding or destroying documents that might be used in an investigation or litigation.

Meanwhile, Ramon Fonseca, a co-founder of Mossack Fonseca, said the firm had no control of how its clients might use offshore vehicles created for them.

“We are not responsible for the actions of a corporation that we set up,” he told Panama’s Channel 2.

Panamanian President Juan Carlos Varela issued a statement saying his government would cooperate “vigorously” with any judicial investigation arising from the leak of the law firm’s documents. He said that the revelations shouldn’t detract from his government’s “zero tolerance” for any illicit activities in Panama’s finance industry.

ICIJ said the law firm’s leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories. It said it would release the full list of companies and people linked to them early next month.

Obermayer said that over the course of several months Sueddeutsche Zeitung received about 2.6 terabytes of data — more than would fit on 600 DVDs. The newspaper said the amount of data it obtained is several times larger than a previous cache of offshore data published by WikiLeaks in 2013 that exposed the financial dealings of prominent individuals.

“To our knowledge, this is the biggest leak that journalists have ever worked on,” Obermayer said.

The newspaper and its partners verified the data’s authenticity by comparing it to public registers, witness testimony and court rulings, he told the AP. A previous cache of Mossack Fonseca documents obtained by German authorities was also used to verify the new material, Obermayer added.

Among the countries with past or present political figures named in the reports are Iceland, Ukraine, Pakistan, Saudi Arabia, Russia and Argentina.

The Guardian newspaper, which took part in the investigation, published a video on its website late Sunday showing an interview with Iceland’s prime minister, Sigmundur David Gunnlaugsson. During the interview with Sweden’s SVT television, the prime minister is asked about a company called Wintris. He responds by insisting that its affairs are above board and calling the question “completely inappropriate,” before breaking off the interview.

In Russia, the Kremlin last week said it was anticipating what it called an upcoming “information attack.”

Russian President Vladimir Putin’s spokesman, Dmitry Peskov, told reporters that the Kremlin had received “a series of questions in a rude manner” from an organization that he said was trying to smear Putin.

“Journalists and members of other organizations have been actively trying to discredit Putin and this country’s leadership,” Peskov said.

The office of Argentina’s president, Mauricio Macri, confirmed Sunday that the business group owned by his family set up Fleg Trading Ltd., an offshore company based in the Bahamas. But it said Macri himself had no shares in Fleg and never received income from it.

Macri’s office commented after La Nacion, an Argentine national newspaper, reported that he and his family had links to Fleg.

Mexico’s tax office announced late Sunday that it would check on any Mexican resident or company mentioned in news reports on the leaked documents to see if there was any wrongdoing was involved.

The ICIJ said the documents included emails, financial spreadsheets, passports and corporate records detailing how powerful figures used banks, law firms and offshore shell companies to hide their assets. The data spanned a time frame of nearly 40 years, from 1977 through the end of 2015, it said.

“It allows a never-before-seen view inside the offshore world — providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues,” the ICIJ said.

According to the media group’s website, global banks including HSBC, UBS, Credit Suisse, Deutsche Bank and others have worked with Mossack Fonseca to create offshore accounts.

“The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicized reforms implemented over the last few years,” HSBC spokesman Rob Sherman said in an emailed response to an AP request for comment.

“We work closely with the authorities to fight financial crime and implement sanctions,” he said.

UBS, Credit Suisse and Deutsche Bank did not immediately respond to a request for comment.

Las Vegas Review-Journal reporter Jeff German contributed to this report. Contact German at jgerman@reviewjournal.com or 702-380-8135. Find @JGermanRJ on Twitter.

 

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