On 3 April, the Panama Papers leaked set of 11.5 million confidential documents that provide detailed information on more than 214,000 offshore companies listed by the Panamanian corporate service provider, Mossack Fonseca [a Panama-based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands, administering of offshore firms for a yearly fee and providing other services such as wealth management], including the identities of shareholders and directors of offshore companies.
The Panamanian law firm – the world’s fourth biggest provider of offshore services with a strong UK connection – runs a worldwide operation with its presence in about 42 countries. It has franchises around the world – Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies of Guernsey, Jersey and the Isle of Man – where separately owned affiliates sign up new customers and have exclusive rights to use its brand.
The unprecedented leak of 11.5 million files shows how a global industry of law firms and big banks sell financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars.
This revelation, made possible by internal data of the Panama-based offshore-provider, Mossack Fonseca, obtained by the German newspaper Süddeutsche Zeitung, was shared by the International Consortium of Investigative Journalists (ICIJ) to over 100 other media partners in 82 countries.
The files, seen by Sierraloaded, show how Mossack Fonseca, reputed as one of the most secretive companies in the world, helped clients register offshore entities, which are then used to launder money around the world, evade tax and dodge sanctions.
The data leak also provide details of the hidden financial dealings of 128 more politicians and public officials around the world, including Nawaz Sharif, Pakistan’s Prime Minister; Ayad Allawi, ex-interim Prime Minister and former Vice-President of Iraq; Petro Poroshenko, President of Ukraine; Alaa Mubarak, son of Egypt’s former president; Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson; Bukola Saraki, Nigeria’s Senate President; Beny Steinmetz, Sierra Leone’s prolific diamond buyer and supplier to the luxury jewelry brand Tiffany & Co., who reportedly had a personal fortune of $6 billion in 2012, among others.
The leaked data further sheds light on the internal financial structures created by BSGR to camouflage Octea’s financial activities. The data reveals a BSGR corporate structure, dated 2015, identifying Octea as wholly owned by Guernsey-based BSGR Resources.
The data leak also confirms a secretive financial structure connecting Koidu Holdings and Octea to wholly owned Steinmetz entities in Liechtenstein, the British Virgin Islands and Switzerland. Some of these entities hold a great deal of money, especially when compared to Koidu Holdings, which had only US$5,401 in its HSBC account in 2007. That same year, Nysco listed $27.7 million in a single HSBC bank account. Beny’s brother and business associate, Daniel, was listed as attorney for an HSBC bank account with more than US$250 million.
Both Koidu Holdings and Octea have failed to pay outstanding fees to the government of Sierra Leone – a situation that has threatened closure of the mine and contributed to the resignation of Octea CEO Brett Richards.
Octea and Koidu Holding’s financial accounts from 2012 to 2015 could not be accessed because they are incorporated in tax havens, the data leak further stated.
According to the data leak, the government department responsible for overseeing mining activity, the National Mineral Agency (NMA), declined to respond to questions around corporate structures, taxes, profits and valuation.
Mossack Fonseca deny any wrongdoing, saying the firm complies with anti-money-laundering laws and carries out thorough due diligence on all its clients. He says the firm also regrets any misuse of its services and tries actively to prevent it. The firm further says it cannot be blamed for failings by intermediaries, who include banks, law firms and accountants.
Last October, Concord Times published an Investigation into more than 100,000 leaked HSBC Switzerland client accounts linked to Sierra Leone. The SwissLeaks scandal [leaked HSBC Swiss account information] centered on the absolute values of money connected to individual countries around the world and the potential crimes of tax evasion and money laundering of their citizens’ foreign bank accounts.