ICIJ Investigations In the News - Panama Papers and Suspicious Activity Reports (9/22/20; 9/25/20)

I offer two related items in which the International Consortium of Investigative Journalists (“ICIJ”) is involved.  I have written on ICIJ with respect to the so-called “Panama Papers” which involved ICIJ’s investigation into offshore accounts via access to and disclosure of the Panama-based law firm Mossack Fonseca’s files helping tax evaders, including persons subject to U.S. tax.  Most readers of this blog will already be familiar generally with the Panama Papers.  

1. Yesterday, DOJ posted this release:  “U.S. Taxpayer in Panama Papers Investigation Sentenced to Prison (DOJ 9/21/20), here.  The defendant, Harald Joachim von der Goltz (also identified with several pseudonyms) pled guilty to “one count of conspiracy to commit tax evasion; one count of wire fraud; one count of money laundering conspiracy; four counts of willful failure to file Reports of Foreign Bank and Financial Accounts, FinCEN Reports 114; and two counts of false statements.”  The pattern is familiar.  Von der Goltz conspired with others to conceal assets and income (defraud / Klein conspiracy), using offshore accounts and shell companies.  He was assisted by Mossack Fonseca and others, including a Panamanian lawyer and a U.S. accountant.

2. ICIJ is at it again having gained access to a trove of FinCEN Suspicious Activity Reports that indicate some inattention by major banks and perhaps FinCEN who should be paying attention and even likely violations of money laundering, tax and related laws. The entry page for ICIJ’s revelations is here.  See also ICIJ’s the following ICIJ pages for further information:

• FAQs on “What is the FinCEN Files investigation?”, here.
• About Suspicious Activity Reports, here.
• About the FinCEN Files investigation, here.

The latter article summarizes:

The FinCEN Files investigation was able to trace banks’ roles in hiding money looted from government treasuries, scammed from pensioners, and generated through drug sales, illegal gold mining and other illegal activities.

The findings expose – from the inside – the consequences of allowing banks themselves to lead the world’s anti-money laundering defenses against kleptocracy, crime and terror, even as they earn huge profits from these same malefactors.

They also show how laundered money provides the lifeblood for corrupt authoritarian regimes and the enemies of democracy worldwide.

The Treasury Department documents reveal how major banks continued to move staggering sums of suspect cash even while on criminal probation after highly touted money-laundering crackdowns by U.S. and U.K. authorities.

ICIJ’s analysis of the FinCEN Files and U.S. authorities’ enforcement actions indicates that imposing fines and deferring prosecutions of banks and declining to prosecute bank executives hasn’t stopped banks from continuing to profit from moving suspect transactions

3.  (Added 9/25/20 11:30am).  Relating to Item 1 above, Richard Gaffey, aka Dick Gaffey, 76, the accountant / enabler for von den Goltz and other offshore tax cheats was sentenced by the same judge on 9/24/20 "to 39 months in prison for wire fraud, tax fraud, money laundering, aggravated identity theft, and other charges."  See DOJ Press Release, titled U.S. Accountant in Panama Papers Investigation Sentenced to Prison (9/24/20), here.  As described in the press release, Gaffey was a bad actor as enabler of offshore and related tax cheating.

JAT Comments:

1. Presumably, there will be more Panama Papers indictments and, if so, likely convictions.

2. I have not tried yet to really dig into the FinCEN files investigation.  Where surreptitious money flows there is almost certainly a host of crimes, both U.S. and foreign country.

3. As noted in the links, a Treasury Department official appears to have been the source of the FinCEN files that ICIJ obtained.  According to ICIJ’s site, that “official, Natalie Mayflower Sours Edwards, from Virginia, pleaded guilty in January to conspiring to unlawfully disclose documents to BuzzFeed News.”  

4. Blogs on Panama Papers (in reverse chronological order) may be viewed by the key searching in the word search box on either “ICIJ” or “Panama Papers”.

5. ICIJ had another set of disclosures called the Paradise Papers.  See ICIJ Offers a New Trove of Offshore Activity Documents -- the Paradise Papers (Federal Tax Crimes Blog 11/6/17), here.

6.    Added 9/25/20 11:30am:  On the addition of the sentencing for the accountant / enabler (see main paragraph 3 above), the accountant / enabler is 76 years old.  The 39 month sentence will mean that he will be at least 79 (even with good time credit) when he is released from prison.  Just worth thinking about, particularly for older persons wanting to play the game.

7. Readers may note that I generally use the word pled rather than pleaded that some refined writers prefer.  See June Casagrande, Column: A Word, Please: Whether someone pled or pleaded guilty is in question (LA Times Burbank Leader 3/7/19), here