Contributed By: Monte Friesner - Financial Crime Analyst
MOSSACK LAW FIRM HID ITS DODGY BVI AND CUBAN SUBSIDIARIES
The Panamanian law firm of Mossack and Fonseca, roasted in global media, for its illegal activities, as revealed in the Panama Papers, went to great lengths to disguise its illicit overseas subsidiaries. The use of corporate names that cannot be identified with a parent, and the use of deceptive names, are the hallmarks of money launderers.
We already know that the law firm used "MF" in the names of subs, to conceal their relationship with the parent, but the firm resorted to even more confusing methods, to insure that the public would not connect it with its secretive formation, in other tax haven jurisdictions. For example:
(1) in the opaque British Virgin Islands, where Mossack formed the majority of its corporations for dodgy clients(and where the local regulator, the FSC, allowed it to operate with impunity*) it employed "Mossack Fonseca & Co." as its local subsidiary. law firms do NOT use the word company in their name; its use was clearly intended to deceive the non-lawyer public, who would assume that the firm was a commercial business.
(2) In the Republic of Cuba, Mossack used "Pan American Corporation," which obviously was a scheme to rely upon the fact that many companies use the phrase 'Pan American' in their title, and it was an effort to link it with other, totally unaffiliated entities. it also connotes such former old-line companies as Pan American Airways, and Pan American Bank, which seemingly provides a level of legitimacy. Again, this is classic money laundering trade craft.
A number of corrupt Cuban Communist Party officials have recently been unmasked, for having MF forming offshore companies for them, directly, or through Swiss intermediaries. Most senior Cuban officials are believed to hold large Swiss accounts, containing criminal proceeds, and some of those accounts are in the names of tax haven companies formed by Mossack Fonseca.
The more details that emerge, about the financial crime which Mossack and Fonseca engaged in, the louder the clamor will be, to shut down the firm, and charge all the partners, not just the duo whose names appear, with money laundering, in multiple jurisdictions, including the United States and Canada. If Panama does not act in a timely manner, you can expect its reputation to sink even lower, in the eyes of the world, and it will cease to be a destination for legitimate international business.
* See Regulator Allowed Mossack and Fonseca to Run Amuck in BVI, Kenneth Rijock's Financial Crime Blog, may 17, 2016.