Four men were charged in the Panama Papers tax evasion investigation by federal authorities for conspiracy and tax fraud charges on Tuesday.
Federal authorities in New York said that 11-count indictment unsealed in Manhattan stems from what prosecutors described as an “intercontinental money laundering scheme” involving a global law firm based in Panama.
One American, one Panamanian citizen, and two Germans were indicted with conspiracy and other counts. It was not known if the men at defense attorneys.
The notorious Panama Papers included millions of secret financial documents that show how some of the world’s richest people hide and protect their money. These records were first leaked to a major newspaper in Germany and were shared with a consortium of international investigative journalists. The journalists began to publish the collaborative reports of the financial documents with news organizations in 2016.
The Panamanian law firm, Mossack Fonseca, conspired to avoid U.S. laws to sustain the wealth of their clients and hide tax dollars owed to the IRS, according to authorities. Federal authorities say the scheme dates back to 2000. Sham foundations and shell companies were created in Panama, Hong Kong, and the British Virgin Islands.
The indictment further alleges that, upon the advice of two of the men charged, Client-1 covertly repatriated approximately $3 million of Client-1’s offshore money to the United States by falsely stating on Client-1’s federal tax return that the money represented proceeds from the sale of a company. After Client-1 repatriated approximately $3 million in this manner, approximately $1 million still remained in Client-1’s offshore account, the existence of which remained hidden from the IRS.
U.S. Attorney Geoffrey Berman said the defendants “shuffled millions of dollars through off-shore accounts” and had “a playbook to repatriate un-taxed money into the U.S. banking system.”
“Now their international tax scheme is over,” Berman said in a statement, “and these defendants face years in prison for their crimes.”