In mid February, the authorities in Geneva, Switzerland raided the offices of British multinational HSBC after a public prosecutor opened a criminal investigation into allegations that the bank, one of the world's largest, had helped its clients launder money by hiding it in offshore accounts. Not long afterwards, German police raided the offices of Commerzbank, suspecting that it, too, was involved in money laundering.
Evidence gathered during the second raid implicated a third company, the Panamanian-based law firm Mossack Fonseca, in the criminal money laundering. As it happens, I wrote about Mossack Fonseca for VICE last December, in a story titled "The Law Firm That Works with Oligarchs, Money Launderers, and Dictators." And the evidence found during the raid on Commerzbank suggests that despite my story—and the small sliver of sunlight it shined on Mossack Fonseca's dealings—the firm is still up to its old tricks.
Investigators believe that Mossack Fonseca helped set up offshore front companies linked directly to the accounts. It's not yet clear from published reports whose money HSBC, Commerzbank, and Mossack Fonseca allegedly helped hide offshore, but the list reportedly includes several Israeli billionaires.
As I reported after an extensive investigation that included trips to Panama and Las Vegas—where Mossack Fonseca uses a closely-linked firm, MF Corporate Services, to help its clients set up bogus shell companies—the Panamanian law firm has a long list of shady prior clients.
They include Rami Makhlouf, the richest and most powerful businessman in Syria who is believed to be the "bagman" for President Bashar al Assad. That kinda speaks for itself.
Other clients of Mossack Fonseca's include associates of Muammar Gaddafi and Robert Mugabe, as well as an Israeli billionaire who has plundered one of Africa's poorest countries, and a business oligarch named Lázaro Báez. According to US court records and reports by a federal prosecutor in Argentina, Báez allegedly laundered tens of millions of dollars through a network of shell firms, some which Mossack Fonseca had helped register in Las Vegas.
Incidentally, the main employee of MF Corporate Services is Patricia Amunategui, a native Chilean who previously worked as a casino cocktail waitress and, based on her Facebook page, enjoys yoga, spiritualism, and hiking, and admires the Dalai Lama, the Tea Party, and former Chilean dictator Augusto Pinochet.
Another person who has helped set up Las Vegas shell companies for Mossack Fonseca is Leticia Montoya. She's based in Panama and has previously registered or served as a nominee director for at least six anonymous companies that were involved in major international corruption scandals. Here is her passport photo.
Also, I mentioned HSBC above. Its CEO, Stewart Gulliver, was recently revealed by the Guardian to have controlled an offshore bank account in Panama. He has claimed that he only opened it because he didn't want his colleagues to know about the enormous, swollen bonus he received from HSBC. It is not yet clear if Mossack Fonseca set up his account.
According to the Guardian, Gulliver was the "beneficial owner of an account in the name of Worcester Equities Inc, an anonymous company registered in Panama, containing a balance in 2007 of $7.6m. It was through this entity that Gulliver 's HSBC bonuses were paid until 2003. He also held a second account in the name of Worcester Foundation, which had been closed before 2007." (See this article at Naked Capitalism, which very generously cited my earlier VICE story.)
What's more, a US Senate committee report has described HSBC as a major conduit for "drug kingpins and rogue nations," and in 2013 the bank signed a $1.92 billion settlement with the US Justice Department after admitting to helping launder millions of dollars through shell firms for Colombian and Mexican cartels.
(Credit where credit is due: The best, most groundbreaking work on money laundering and the offshore system has been done by the International Consortium of Investigative Journalists.)
The German and Swiss investigations are ongoing.
When I asked Mossack Fonseca for comment on these fresh investigations, the firm denied everything generally without denying anything specifically—though they essentially denied that Báez had ever been a client. The firm also bragged that it had never been criminally charged with wrongdoing, which seems like a pretty low bar, but that was its defense. And while it remains true, to the best of my knowledge, that the firm has not yet been charged with criminal conduct, that may soon change depending on the investigations in Switzerland and Germany.
Ana María Garzón, a communications advisor with Comunicaciones Corporativas— which is affiliated with PR firm Burson-Marsteller Panamá—sent an email on behalf of Mossack Fonseca wherein the firm stated that it is "inaccurate and ludicrous" to suggest that they are currently being investigated for criminal wrongdoing. Garzon, who is not a spokeswoman for Mossack Fonseca but whose firm is hired as an outside contractor to field media inquiries, also passed along word from her client that everything I have ever written about it is false, though the email failed to indicate what specifically was not true. Mossack Fonseca added that "all remarks made by publications such as Vice Magazine and others who have replicated the false accusations and fabrications are baseless and respond to vested interests."
I'd like to take this email at face value, but I would also note that according to the Guardian, Burson-Marsteller is PR firm that has worked for dictators and murderers in Nigeria, Argentina, Romania, and Indonesia, as well as Union Carbide after Bhopal.
But that's just from a cursory search on the Internet, so who knows? When I asked Garzón about these allegations against Burson-Marsteller, with which her PR shop is affiliated, she had no comment. If she replies, I will be sure to update this story.
Ken Silverstein is an investigative reporter who writes for VICE and other publications, including the New York Observer, where his new column, Washington Babylon, will soon debut. He was formerly a senior investigative reporter for Racket. Check out his original magazine story on Mossack Fonseca here, and the firm's indignant, poorly-translated-from-Spanish response letter here.