MOSSACK FONSECA CREATED CRIMINAL CORPORATIONS FOR CANADIANS

Written By:                    Kenneth Rijock - International Financial Crime Consultant
Chronicles Of:               Monte Friesner - Financial Intelligence Analyst
Contributed By:            Vladimir Feldman - Financial Crime Analyst

MOSSACK FONSECA USED ITS CAPTIVE FOUNDATION TO HOLD BVI CORP FOR CANADIAN CLIENTS

The Panama law firm of Mossack Fonseca, whose methods and tactics more closely resemble those of an international money laundering operation, rather than a team of attorneys providing legitimate legal services, used its captive foundation to hold title to companies that it formed for clients; in this case, it was a Canadian national, though lawyers in that country now involved with him insist that they are winding down all offshore matters, and following Canada's tax laws, to the letter.

What Mossack did:

(1) Form a British Virgin Islands corporation for the client. BVI companies have bearer shares, so it si impossible to identify Beneficial Owners.

(2) Charge the client $9000 for that service. Under ordinary circumstances, this would be considered a clearly excessive fee. Ask your own lawyer what he charges to form a corporation in your jurisdiction.

(3) List "MF Foundation" as the shareholder of the BVI company. Foundations, under Panamanian law, have no shareholders, and the beneficiary can be changed at will. This is a classic money laundering technique, and it has no place in legitimate legal practice.

(4) A bank account was thereafter set up at Winterbotham Trust Company, Limited, in Nassau, Bahamas, and an initial deposit of $9000 was made. Such "under-ten" deposits are expressly designed to avoid any reporting requirements that might alert law enforcement, or tax authorities, to potential tax evasion, or criminal activity. Winterbotham also has offices in Uruguay and Hong Kong.

The above is a template for precisely how Mossack Fonseca, and indeed many other Panamanian law firms, move money for wealthy clients. Issues about whether the money is evading taxes, or is the proceeds of crime, are never brought up, as Panama is attractive, not for legitimate international commerce, but for dodgy clients, and dirty money.