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Mossack Fonseca
Overview
Mossack Fonseca & Co was a law firm based in Panama. Founded in 1977, it was the world's fourth-largest provider of offshore financial services at one point. Before the leak of the Panama Papers 2016, the company was mostly secluded from public attention
Controversies of the firm
Argentine money laundering (2014)
Commonly known as the route of K-Money, the scandel allegedly revolves around Argentinean Presidents, Nestor Kirchner, his wife Cristina de Kirchner. Their business associate, Lázaro Báez and MF Corporate Services was subsidiary of Mossack Fonseca. In 2014, MF Corporate Services had established 123 shell companies for the purpose of transferring public infrastructure funds from the government to Lázaro Báez who further transferred these funds to several tax havens.
Operation Car Wash(2016)
In January 2016, the Brazilian Federal Police alleged that the firm used a real estate company to help hide criminal proceeds from the scheme involving Petrobras. Several employees who worked Mossack Fonesca's Brazilian branch were charged for implication to the scandal. The employees were accused in being implicit in facilitating money laundering by setting up offshoring companies.
Panama Papers leak
On 3 April 2016, one of Germany's largest newspapers, Süddeutsche Zeitung (SZ), revealed 11.5 million confidential documents that were owned by Mossack Fonesca were leaked to them by an anonymous source in 2015. Due to the 2.6 terabytes of data sent, the news firm enlisted the help of the International Consortium of Investigative Journalists (ICIJ).
ICIJ revealed the 2.6 terabytes of data contains records dating back to the 1970s, including information about more than 210,000 companies in 21 offshore jurisdictions. 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.
Closure of Mossack Fonseca
Mossack Fonseca closed in March 2018 after the Panama Papers scandal. The firm cited economic and reputational damage as the reasons for its closure. The firm blamed the “reputational deterioration, the media campaign, the financial circus and the unusual actions by certain Panamanian authorities“ in a statement to the press.