In May of 2016, the then little known International Consortium of Investigative Journalists (ICIJ) released millions of records that were in the possession of a Panamanian law firm, Mossack Fonseca. The documents were allegedly leaked in 2015 to the ICIJ and later published. The release of papers sparked dozens of tax evasion and corruption investigations across the country.
Although Mossack Fonseca denied any wrongdoing, many believe the law firm was helping wealthy individuals hide money from taxing authorities and helped companies launder money. In the year since the ICIJ published more than 11.6 million records, many criminal investigations have been started. Two weeks ago, Pakistan’s former Prime Minister, Nawaz Sharif, was indicted on corruption charges tied to the Panama Papers.
Appleby Data Breach
As authorities worldwide continue to pore over the millions of documents, last week ICIJ announced they had acquired thousands of new records, this time tied to a new data breach at Bermuda based international law firm, Appleby. Where the new records lead is anyone’s guess.
We are interested in these leaks because often they detail evidence of money laundering, tax evasion and foreign bribery.
Appleby calls the data breach a criminal act. They say they were hacked. Whether the law firm were hacked or a disgruntled employee simply copied the data, private banking information of the ultra rich is again in the hands of the media.
In a statement on their website, Appleby says,
“During the cyber-attack, we believe, but we do not know for certain, that a limited number of private documents were stolen by criminals from servers in a number of our offices. Whilst we have taken robust measures to protect ourselves from further attacks, we believe that these illegally held documents will be used by journalists who will be publishing stories about the off-shore world in the next few days. We will continue to defend ourselves and our legitimate and lawful business against these groundless allegations…
“Appleby has thoroughly and vigorously investigated the allegations and we are satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients. We refute any allegations which may suggest otherwise and we would be happy to cooperate fully with any legitimate and authorised investigation of the allegations by the appropriate and relevant authorities.
“We are an offshore law firm who advises clients on legitimate and lawful ways to conduct their business. We do not tolerate illegal behaviour. It is true that we are not infallible. Where we find that mistakes have happened we act quickly to put things right and we make the necessary notifications to the relevant authorities.”
Mossack Fonseca said many of the same things. Whether or not the lawyers did anything wrong, we suspect that many of their clients do. (In February, the founding partners Jürgen Mossack and Ramón Fonseca were charged with money laundering. Panama’s Attorney General said about the allegedly laundered funds, “Put simply, the money comes from bribes, circulated via certain corporate entities to return bleached or washed to Panama.”)
Paul Manafort and Panama Papers
After the indictment was released last week, we revisited the Panama Papers database. It is free and searchable by anyone with an Internet connection. What did we find this time? Several of the companies alleged tied to Manafort listed in the papers. Companies with accounts in Cyprus banks. Several Cyprus banks, of course, are long suspected of having ties with Russian mobsters.
Is any of this evidence of wrongdoing by Manafort? No, not by itself. But we certainly were not surprised by what we found and suspect that prosecutors are already aware of the information.
Whistleblowers, Unreported Foreign Accounts and Foreign Bribery
The IRS, SEC and Department of Justice are all interested in offshore accounts. U.S. law says that anyone with an interest in foreign financial account must report that account annually. Having the account isn’t illegal but failing to disclose the details to Uncle Sam is. Businesses with offshore business dealings or Americans living abroad often have foreign accounts. Unfortunately, we know that many people have unreported accounts in the hopes of hiding money from Uncle Sam or concealing their criminal activities.
The IRS Whistleblower Program pays large cash awards to people with inside information about unreported offshore accounts. They also pay awards for information about tax evasion. If you know about individuals or companies with ties to the United States that are failing to report foreign bank accounts, you may qualify for an award.
The largest IRS whistleblower award to date was paid to Bradley Birkenfeld, a former executive with Swiss bank UBS. Birkenfeld was paid over $100 million for providing evidence on how UBS was helping wealthy Americans conceal offshore accounts from the IRS. Whether you are working for an offshore bank or a law firm like Appleby, if you employer is knowingly aiding Americans evade taxes or conceal accounts, you may be eligible for an award.
The IRS Whistleblower Program is very confidential. Few IRS whistleblowers are ever identified.
The SEC and Justice Department investigate violations of the Foreign Corrupt Practices Act (FCPA). That law makes it illegal to pay or offer to pay bribes to foreign government officials. In many countries, public corruption is widespread. The United States and most developed countries now have laws to punish companies that seek to get a competitive business advantage through illegal means. The FCPA helps level the playing field for honest businesses.
The SEC Whistleblower Program pays large cash awards to individuals with inside information about foreign bribery. Like the IRS, the SEC also has a great track record with keeping the whistleblower’s identity confidential.
Simply finding someone’s name on ICIJ’s website probably isn’t enough. But coupled with inside information, we may be able to help you qualify for a large cash award.
ICIJ publishes the information it gathers from its sources in the hopes that transparency will eliminate money laundering. In our experience, money laundering is often tied to drug dealing, arms dealing, organized crime, tax evasion and divorce fraud. If the account was legit, most companies or people would have no problem in reporting their accounts.
To learn more about becoming a whistleblower, give us a call. All inquiries are confidential. We never charge for our services unless we recover money for you. For more information: