Financial details of the wealthy and corrupt – leaked

Is this another Edward Snowden for financial dealings?

In a development that is likely to have serious wide ranged implications, tax authorities in New Zealand and Australia are investigating into a massive data leak from a Panama based law firm with possible which is pointing to a series of high profile tax evasions.

The incident revolves around the leaking of 11.5 million documents from Mossack Fonseca, a law firm based out of Panama. Incidentally, the country is a tax haven. The leaked documents reveals inner details of hundreds and thousands of its clients with multi-country jurisdiction.

At the very centre of the investigations are these leaked documents which have been published by the International Consortium of Investigative Journalists, which includes Süddeutsche Zeitung, a German newspaper.

Süddeutsche Zeitung has reported it had received a huge cachement of documents which it shared with other media outlets.

This leak is significant since the “Panama Papers”, the leaked documents, cover a period of nearly 40 years. From 1977 to December 2015, to be precise. They allegedly contain a treasure trove of information including issues such as money laundering, tax evasions, arms and drug deals.

As per the Guardian, a British newspaper, the leaked documents contain information pertaining to a network of secretive offshore deals and loans worth $2 billion to people who are close friends of the Russian President Vladimir Putin.

With the leak of the Panama Papers, the Australian Tax Office (ATO) has begun investigating more than 800 Mossack Fonseca’s wealthy clients.

“Currently we have identified over 800 individual taxpayers and we have now linked over 120 of them to an associate offshore service provider located in Hong Kong,” said the ATO in a statement without naming the Hong Kong company.

In Denial

On its part, Mossack Fonseca has outright denied any kind of wrongdoing. Its head has however acknowledged that it had suffered a “limited” hack on its databse. The incident has been portrayed as “an international campaign against privacy” by Ramon Fonseca, Mossack Fonseca’s director.

Until March, Fonseca, was a senior government bureaucrat in the Panama government. In a telephonic interview with Reuters he has disclosed that the law firm specialises in setting up offshore companies, that more than 240,000 such companies have been created, of which the “vast majority” are for “legitimate purposes.”

The ATO meanwhile is targeting nearly 800 individuals, including taxpayers who had previously reported themselves under a voluntary tax disclosure initiative, which allowed citizens to declare their unaccounted monies so as to avoid heavy penalties and criminal charges. The investigations also includes people who did not have a prior tax evasion record.

New Zeland’s tax authorities are also “working closely” with its tax treaty partners so as to obtain full details, if any, of its citizens tax records with Mossack Fonseca.

On a similar note, other media reports have shed further light on the “Panama Papers” as the leaked data points to a nexus between FIFA’s ethics committee and a soccer officials from Uruguay who was arrested last year by U.S. authorities in a wide ranging probe related to corruption in sports.

In a statement, FIFA’s ethics committee has disclosed that Juan Pedro Damiani, who belongs to its judgment chamber, was being investigated into his business relationship with Eugenio Figueredo, a Uruguayan soccer official who was arrested in Zurich last year.

Damiani now claims that ever since Figueredo was accused of corruption he broke off his relationship with him.

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Categories: Economy & Finance, Entrepreneurship, Geopolitics, HR & Organization, Regulations & Legal, Strategy

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