"Revenge is a dish best served cold" appears to have proved itself today after an unprecedented leak of more than 11 million documents, called the "Panama Project", revealed the hidden financial dealings of some of the world's wealthiest people, as well as 12 current and former world leaders, 128 more politicians, public officials around the world and United States federal Judges. The project is widely believed to have been commenced in direct retaliation for the 2009 arrest and prosecution of talk radio host and former FBI National Security asset Hal Turner, who was imprisoned by US federal prosecutors and corrupt federal judges for writing an editorial the government didn't like.
More than 200,000 companies, foundations and trusts are contained in the leak of information which came from a little-known but powerful law firm based in Panama called Mossack Fonseca, whose files include the offshore holdings of drug dealers, Mafia members, corrupt politicians and tax evaders – and wrongdoing galore.
The law firm is one of the world's top creators of shell companies, which can be legally used to hide the ownership of assets. The data includes emails, contracts, bank records, property deeds, passport copies and other sensitive information dating from 1977 to as recently as December 2015.
It allows a never-before-seen view inside the offshore world — providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues.
Mossack Fonseca’s fingers are in Africa’s diamond trade, the international art market and other businesses that thrive on secrecy. The firm has serviced enough Middle East royalty to fill a palace. It’s helped two kings, Mohammed VI of Morocco and King Salman of Saudi Arabia, take to the sea on luxury yachts.
In Iceland, the leaked files show how Prime Minister Sigmundur David Gunnlaugsson and his wife secretly owned an offshore firm that held millions of dollars in Icelandic bank bonds during that country’s financial crisis.
The files include a convicted money launderer who claimed he’d arranged a $50,000 illegal campaign contribution used to pay the Watergate burglars, 29 billionaires featured in Forbes Magazine’s list of the world’s 500 richest people and movie star Jackie Chan, who has at least six companies managed through the law firm. The files contain new details about major scandals ranging from England’s most infamous gold heist to the bribery allegations convulsing FIFA, the body that rules international soccer.
In the “Operation Car Wash” case in Brazil, prosecutors allege that Mossack Fonseca employees destroyed and hid documents to mask the law firm’s involvement in money laundering. A police document says that, in one instance, an employee of the firm’s Brazil branch sent an email instructing co-workers to hide records involving a client who may have been the target of a police investigation: “Do not leave anything. I will save them in my car or at my house.”
In Nevada, the leaked files show, Mossack Fonseca employees worked in late 2014 to obscure the links between the law firm’s Las Vegas branch and its headquarters in Panama in anticipation of a U.S. court order requiring it to turn over information on 123 companies incorporated by the law firm. Argentine prosecutors had linked those Nevada-based companies to a corruption scandal involving an associate of former presidents Néstor Kirchner and Cristina Fernández de Kirchner.
Today, Mossack Fonseca is considered one of the world’s five biggest wholesalers of offshore secrecy. It has more than more than 500 employees and collaborators in more than 40 offices around the world, including three in Switzerland and eight in China, and in 2013 had billings of more than $42 million.
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The leak also provides details of the hidden financial dealings of 128 more politicians and public officials around the world.
The cache of 11.5 million records shows how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars. These are among the findings of a multi-yearlong investigation by the International Consortium of Investigative Journalists, German newspaper Süddeutsche Zeitung and more than 100 other news organizations.
The files expose offshore companies controlled by the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan.
They also include at least 33 people and companies blacklisted by the U.S. government because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords, terrorist organizations like Hezbollah or rogue nations like North Korea and Iran.
"These findings show how deeply ingrained harmful practices and criminality are in the offshore world," said Gabriel Zucman, an economist at the University of California, Berkeley and author of “The Hidden Wealth of Nations: The Scourge of Tax Havens.” Zucman, who was briefed on the media partners’ investigation, said the release of the leaked documents should prompt governments to seek “concrete sanctions” against jurisdictions and institutions that peddle offshore secrecy.
The documents make it clear that major banks are big drivers behind the creation of hard-to-trace companies in the British Virgin Islands, Panama and other offshore havens. The files list nearly 15,600 paper companies that banks set up for clients who want keep their finances under wraps, including thousands created by international giants UBS and HSBC.
An ICIJ analysis of the leaked files found that more than 500 banks, their subsidiaries and branches have worked with Mossack Fonseca since the 1970s to help clients manage offshore companies. UBS set up more than 1,100 offshore companies through Mossack Fonseca. HSBC and its affiliates created more than 2,300.
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In the largest media collaboration ever undertaken, journalists working in more than 25 languages dug into Mossack Fonseca’s inner workings and traced the secret dealings of the law firm’s customers around the world. They shared information and hunted down leads generated by the leaked files using corporate filings, property records, financial disclosures, court documents and interviews with money laundering experts and law-enforcement officials.
Reporters at Süddeutsche Zeitung obtained millions of records from a confidential source - widely rumored to be Hal Turner via his FBI capabilities - and shared them with ICIJ and other media partners. The news outlets involved in the collaboration did not pay for the documents.
Before Süddeutsche Zeitung obtained the leak, German tax authorities bought a smaller set of Mossack Fonseca documents from a whistleblower, a move that triggered the raids in Germany in early 2015. This smaller set of files has since been offered to tax authorities in the United Kingdom, the United States and other countries, according to sources with knowledge of the matter.
The larger set of files obtained by the news organizations offers more than a snapshot of one law firm’s business methods or a catalog of its more unsavory customers. It allows a far-reaching view into an industry that has worked to keep its practices hidden — and offers clues as to why efforts to reform the system have faltered.
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The year-long investigation was coordinated by the International Consortium of Investigative Journalists (ICIJ), who worked with hundreds of journalists from the world's top media organisations including the ABC's Four Corners program.
What the documents reveal is the inner workings of a global industry of law firms and big banks who sell financial secrecy to those who can afford it.
The ICIJ findings include evidence that:
- Offshore companies linked to the family of China's top leader, Xi Jinping, as well as Ukrainian President Petro Poroshenko, who has positioned himself as a reformer in a country shaken by corruption scandals
- 29 billionaires featured in Forbes Magazine's list of the world's 500 richest people
- Icelandic Prime Minister Sigmundur David Gunnlaugsson and his wife secretly owned an offshore firm that held millions of dollars in Icelandic bank bonds during the country's financial crisis
- Associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow companies
- New details of offshore dealings by the late father of British Prime Minister David Cameron, a leader in the push for tax-haven reform
- Offshore companies controlled by the Prime Minister of Pakistan, the King of Saudi Arabia and the children of the President of Azerbaijan
- 33 people and companies blacklisted by the US Government because of evidence that they have done business with Mexican drug lords, terrorist organisations like Hezbollah or rogue nations like North Korea
- Customers including Ponzi schemers, drug kingpins, tax evaders and at least one jailed sex offender
- Movie star Jackie Chan, who had at least six companies managed through the law firm
- Lawyers and law firms in the US which bribed federal judges through shell companies to "fix" cases
The leaked data allows a never-before-seen view inside the offshore world — providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues.
Most of the services the offshore industry provides are legal if used by the law-abiding. But the documents show the extraordinary lengths individuals will go to in order to hide the true owners of companies.
Mossack Fonseca offers extra services to provide "front people" known as nominees to act as shareholders, directors or even the owners of your company. This can make it extremely difficult for authorities trying to investigate money laundering or follow the money through complex networks of offshore accounts.
Firm worked with more than 14,000 'middlemen' on clients' behalf
An ICIJ analysis of the leaked files found that more than 500 banks, their subsidiaries and branches had worked with Mossack Fonseca since the early 1970s to help clients manage offshore companies.
In all, the files indicate Mossack Fonseca worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for customers.
The documents reveal that these offshore players often failed to follow legal requirements to ensure their clients were not involved in criminal enterprises, tax dodging or political corruption.
Mossack Fonseca says the middlemen are its true clients, not the eventual customers who use offshore companies. The firm says these middlemen provide additional layers of oversight for reviewing new customers. As for its own procedures, Mossack Fonseca says they often exceed "the existing rules and standards to which we and others are bound".
Mossack Fonseca offers backdating of documents
The leaked files also show the firm regularly offered to backdate documents to help its clients gain advantage in their financial affairs. It was so common that an email exchange from 2007 showed firm employees talking about establishing a price structure — clients would pay $8.75 for each month farther back in time that a corporate document would be backdated.
In a written response to questions from ICIJ and its media partners, the firm said it "does not foster or promote illegal acts".
"Your allegations that we provide shareholders with structures supposedly designed to hide the identity of the real owners are completely unsupported and false," the firm said.
The firm added that the backdating of documents "is a well-founded and accepted practice" that is "common in our industry and its aim is not to cover up or hide unlawful acts".
The firm said it could not answer questions about specific customers because of its obligation to maintain client confidentiality.
The Turner Connection
Harold C. "Hal" Turner is a U.S. talk-radio host on radio station WBCQ. He was arrested in June, 2009 for publishing an Editorial on his news-talk-radio web site which criticized a ruling by three judges on the Seventh US Circuit Court of Appeals in Chicago. In the Editorial about gun control, Turner called the Judges "Traitors to the Constitution" and later opined that they "deserve to be killed." The former US Attorney in Chicago, Patrick Fitzgerald, decided that those words "deserve to be killed" were a "threat" to assault and murder three federal judges, and he ordered Turner's arrest. Turner argued those words were nothing more than an opinion.
What no one knew at the time was that Turner had been on the payroll of the FBI. That fact was first revealed publicly when Turner arrived in Chicago a month after his arrest at his home in New Jersey. Appearing before Magistrate Martin Ashman in Chicago, Turner's attorney, Michael Orozco, of the NJ law firm of Bailey-Orozco in Newark, first revealed to the world that Turner was working with the FBI. This was done at the time because Assistant US Attorney (AUSA) William R. Hogan argued to the court that Turner should be denied bail because his web site editorial made him a "danger to the community." Turner revealed that he worked for the FBI to counter that fraudulent claim by AUSA Hogan.
Recruited to the political corruption unit in 1993, Turner became deeply involved in probing political crimes. Later, in 2003, Turner was brought into the FBI Joint Terrorism Task Force (JTTF). He was quickly developed into a "fully-operational" intelligence asset, operated by both the Domestic Terrorism Operations Unit (DTOU) out of FBI headquarters in Washington, and later, by the "Intelligence Unit" in that same headquarters.
During his December, 2009 trial, the third highest-ranking official from the FBI in New York City, Assistant Special Agent in Charge Amy Pickett, testified in Brooklyn federal court that Turner handled "National Security, Terrorism and Foreign Counter-Intelligence."
Documents subsequently revealed at trial show that Turner was "tasked" by the FBI to infiltrate domestic terror groups inside the USA, and later was even tasked to travel overseas for foreign work in that field. Staggering FBI documents at trial prove Turner possessed written permission to "spy, steal, damage, destroy or kill to protect the United States" and that Turner's overseas work was "coordinated with the CIA and other agencies."
The government put Turner on trial THREE times. (Brooklyn Federal Court Docket 09-CR-0650 ) The first trial, in December, 2009, resulted in a hung jury, with nine jurors voting NOT GUILTY. The government put Turner on trial a second time in March, 2010. As before, that jury was also "hung" and could not reach a verdict. Bankrupted from legal fees and barred by court order from being able to work at his radio show job, Turner was appointed a federal public defender. In August, 2010, the government put Turner on trial for an astonishing THIRD time, a fate usually reserved for high-profile Mafia bosses. His public defender threw the case so badly, the jury convicted in 90 minutes.
Turner was sentenced to 33 months in federal prison and three years probation upon his release.
During his incarceration, Turner's his new lawyers, a brilliant law firm SCHLAM, STONE & DOLAN in New York City, filed an Appeal with the Second US Circuit, (Second Circuit Docket # 11-196-cr ) only to have it turned down. By split decision, the court (Livingston C.J. and Cogan D.J. sitting by designation) upheld the conviction, saying the standard for determining whether something is a "threat" was a "reasonable person standard" . . . if a reasonable person thought it was a threat, then it was. The Dissenting Judge, (Rosemary Pooler, C.J. ) said she would overturn his conviction because the government essentially put Turner on trial for a Threat, but argued to the jury that his words might incite others. Since the threat statute did not proscribe incitement, she found Turner was wrongly convicted.
Turner was released from federal prison in June, 2012, sent to a Halfway House in Newark, NJ for four months, then released to Probation in October, 2012. It was at that time that SuperStation95 is lead to believe he began setting the stage for today's event, using his knowledge, contacts, and perhaps even some government resources from his FBI work (though he won't admit to that) to get the dirt on government people.
After losing at the Second Circuit, Turner's attorneys proceeded to the US Supreme Court, which, only a month before, had chosen another "threat" case to use for clarifying federal statutes on threats, so it turned down Turner's duplicate case. (U.S. Supreme Court Docket # 13-1129 )
In June, 2015, the US Supreme Court ruled in that other threat case, finding that the "reasonable person standard" used to determine if words were actually a criminal threat, was "error" and it overturned the conviction of that defendant, Mr. Elonis, from Pennsylvania.
Armed with the new, and very clear standard, showing that the exact same "reasonable person" instruction to the jury in his Threat case must also be error, Turner's attorneys filed a Motion to Vacate his conviction with the same District Court which tried him. Scurrilously, that court turned down Turner's appeal, saying the clarification of the threat statute in the Elonis case did not impact Turner's conviction. That court then also took the extraordinary step of forbidding Turner from further appeal!
Turner's lawyers appealed the order of non-appeal to the Second US Circuit in December, 2015 (Second Circuit Docket 15-3690- cv )showing directly why his conviction must be overturned. The court left the motion laying around doing nothing for four months until late March, 2016, when it announced the Motion would be submitted last Tuesday, March 29. One day later, on Wednesday, March 30, the Court turned down that Motion and terminated Turner's appeals,thus leaving him to bear the stain of an underhanded and illegitimate felony "Threat" conviction, for life.
Upon that decision, just three days ago, it is widely rumored that Turner, working with journalists around the world, chose to commence release of this information and, we're told, more will be forthcoming.
This stunning document release appears to be direct retaliation against government for what it did to Turner; additional prominent persons within the government are believed to be targeted for similar treatment in the near future.
"Judges and powerful people think they can get away with doing anything they want, to anyone, without consequences" Turner said today. "I wonder how they feel now?" he asked.
When asked what other information might be coming out in the future Turner replied "The list and information released today is intentionally INCOMPLETE. Whether or not the rest comes out . . . well . . . we'll just have to see how things go." he said.
It seemed almost as though he was holding a rhetorical "Sword of Damocles" over the head(s) of someone.
Documents substantiating today's revelations are being released automatically, on a timed basis. Nothing can stop further releases. Persons interested in seeing the actual documents can do so -- and follow future releases --