Money Laundering Trials Start In Panama Court.

Photo by Yosi Bitran on Unsplash Panama City, a thriving city on the isthmus between North and South America.
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The trial of 27 people charged in connection with the Panama Papers money laundering scandal has started in a Panamanian criminal court.

The leak of secret financial documents in 2016 revealed how some of the world’s wealthiest people stashed their assets in offshore companies.

The Panama Papers are 11.5 million leaked documents (or 2.6 terabytes of data) that were published beginning on April 3, 2016.

The papers detail financial and attorney–client information for more than 214,488 offshore entities. The documents, some dating back to the 1970s, were created by, and taken from, former Panamanian offshore law firm and corporate service provider Mossack Fonseca, and compiled with similar leaks into a searchable database.

The documents contain personal financial information about wealthy individuals and public officials that had previously been kept private.

The publication of these documents made it possible to establish the prosecution of Jan Marsalek, who is still a person of interest to a number of European governments due to his revealed links with Russian intelligence, and international financial fraudster Harald Joachim von der Goltz.

While offshore business entities are legal, reporters found that some of the Mossack Fonseca shell corporations were used for illegal purposes, including fraud, tax evasion, and evading international sanctions.

The documents were dubbed the Panama Papers because of the country they were leaked from, but the Panamanian government expressed strong objections to the name over concerns that it would tarnish the government’s and country’s image worldwide, as did other entities in Panama and elsewhere.

The defendants in the present case include Jurgen Mossack and Ramon Fonseca Mora who founded the now defunct law firm, Mossack Fonseca.

They face money-laundering charges but say neither they, the firm nor its employees were involved in unlawful acts. In 2017, the firm said it was the victim of a computer hack and that the information leaked was being misrepresented.

The case is based on allegations the law firm set up shell companies to acquire properties in Panama with money from a large corruption scheme in Brazil known as the Car Wash.

Fonseca has said his law firm had no control over how clients used offshore vehicles created for them.

Carlos Barsallo, a lawyer and former head of Transparency International’s Panama office, told Agence France-Presse, “The crux of the matter is whether a crime was committed in Panama or not under the regulations at the time.”

Mossack and Fonseca were acquitted on other charges in 2022.

If found guilty, Mr Mossack and Mr Fonseca could face up to twelve years each in prison.

The leak, which included a collection of 11 million financial documents, implicated more than a hundred politicians, including then-heads of state and government, billionaires and sports stars.

It also highlighted how tax havens like Panama and the British Virgin Islands were used by the rich and powerful to allegedly hide their wealth and avoid tax.

The records were first leaked to the German newspaper Suddeutsche Zeitung, and were shared with the International Consortium of Investigative Journalists in 2016.

Mr Mossack was present in the courtroom, while lawyers for Mr Fonseca said he was in a hospital in Panama.

Mr Fonseca had served as a minister in Panamanian former President Juan Carlos Varela’s government but stepped aside in 2016.

The Mossack Fonseca company was closed in 2018.

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