Panama Papers: Mossack Fonseca’s Offices in Panama, Peru, and El Salvador Raided

Published: 14 April 2016

HDR of Panama City PanamaPanama City (Photo: Wikimedia)

By Stella Roque

Panamanian police raided the headquarters of Mossack Fonseca, the law firm at the center of the Panama Papers leaks Tuesday, reported Agence-France Presse (AFP). The same afternoon, Peruvian police raided Mossack Fonseca’s office in Lima, said the PanAm Post. The raids followed earlier police actions in El Salvador.

The Panama Papers provoked a worldwide scandal revealing the ownership of secretive offshore companies by government officials, business tycoons and criminals to hide wealth.

The leak of 11.5 million records from Mossack Fonseca were examined in a year-long probe by a network of about 400 investigative journalists around the world. The revelations have put a spotlight on an apparently vast failure of due diligence by the firm, igniting global debates on financial secrecy and tax evasion.

Prosecutors in Panama Zoom In On Mossack Fonseca

The Panama raid was organized by Prosecutor Javier Caraballo, reported La Prensa. National Attorney General Kenia Porcell recently appointed Caraballo to head the newly-created Money Laundering and Terrorism Finance Unit to investigate Mossack Fonseca in light of the Panama Papers, according to Panama America.  

The public prosecutor's office said Mossack Fonseca’s staff would not be "collaborating with the prosecutor" as the offices were searched, according to La Prensa. Other agents searched a facility that provides backup computer services for the firm, prosecutors said.

The AFP reported that raids were also being carried out on several other Mossack Fonseca branches in Panama. Police units surrounded the law firm’s headquarters, as did journalists.

The national police said they were searching for evidence that "would establish the possible use of the firm for illicit activities," reported Australian news outlet SBS. The firm has been accused of tax evasion and fraud.

Mossack Fonseca did not respond to SBS’s requests for comment on Tuesday. Earlier, founding partner Ramon Fonseca had said the company had broken no laws, destroyed no documents, and all its operations were legal, SBS reported.

Prior to the raid on Monday, intellectual property prosecutors were summoned to Mossack Fonseca’s offices to investigate the firm’s claim that its computers were hacked before the leak, reported the Guardian.

No arrests have been made in connection to the raids, reported Reuters.

Peru: Court Orders Searches of Mossack Fonseca Office

Meanwhile in Lima, the National Tax Administration and the National Police carried out a court-ordered search of Mossack Fonseca’s office in the capital, reported PanAm Post.  

Tax collector Percy Díaz said that the raid involved the seizure of bookkeeping documents so officials could verify possible connections with the Panama Papers case in Peru.

Authorities raided the residence of Mónica de Ycaza Clerc, Mossack Fonseca’s legal counsel in Peru. They are looking for possible evidence of tax evasion and fraud, PamAm Post reported.

Attorney General Pablo Sánchez Velarde said a preliminary investigation may be launched.

El Salvador Raids Mossack Offices

El Salvadorian authorities also raided Mossack Fonseca’s office late last week seizing documents and equipment, reported Reuters. The El Salvador office is not listed on Mossack Fonseca’s website.

Attorney General Douglas Melendez said the government decided to search the offices of Mossack Fonseca after noticing it had removed its office sign late on Thursday, reported MWC News. 

The attorney general's Twitter feed said an employee claimed the company was planning to move.

Europe Mulls Global Tax Issues

As the raids took place, the Guardian reported investigators were preparing to meet in Paris to launch an inquiry into global tax evasion.

Senior officials from the world’s tax authorities are intent on analyzing the documents to devise a new global strategy to target offenders. The inquiry is being led by the Joint International Tax Shelter Information and Collaboration (JITSIC) network. Australia’s tax commissioner, Chris Jordan, is JITSIC’s chairman and has advocated a global approach to tackling tax evasion. 

The EU unveiled a proposed plan on Tuesday to compel international companies to report earnings and pay their share of taxes, arguing the Panama Papers scandal pressed the need for change, reported the AFP.

The Panama Papers have created tensions between Panama and France in light of Mossack Fonseca’s possibly illegal activities. Mossack Fonseca is only one of many offshore service providers who set up structures such as anonymous shell companies.

France restored Panama to its national list of uncooperative jurisdictions, after removing it from its tax blacklist in 2012, said AFP. In the wake of the leaks, France is urging all European Union (EU) countries and member states of the Organization for Economic Cooperation and Development to do the same.

Panama responded to the scandal by forming an international panel to review the country’s legal and financial practices, said the Guardian. The government said that Joseph Stiglitz, winner of the Nobel prize in economics in 2001, would be appointed a member to the panel to make recommendations.

Mossack Fonseca has 34 offices around the world, according to its website.