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The United States government and governments worldwide have been cracking down in recent years on offshore accountholders who are not reporting their offshore investment income or paying taxes on the income.  There have been numerous settlements with Swiss Banks through which the Department of Justice has gleaned extensive information on offshore banking practices.

Now, however, the unauthorized release of 11 million documents, which is being called The Panama Papers, has revealed a treasure-trove of information about offshore banking practices.

The Panama Papers were leaked by an unknown source from a law firm called Mossack Fonseca, which is based in Panama. The firm insists it has a storied 40-year history with no criminal violations or accusations of wrongdoing. However, the Panama Papers reportedly show tax evasion and money laundering on a global scale, including transactions implicating world leaders. 

The papers provide details on the day-to-day inner workings of the law firm, and so provide unparalleled insight into how undeclared and hidden funds move across the globe.

Any U.S.-connected accountholders who have done any business with Mossack Fonseca should be aware their information is now out there in this document leak. However, the implications of this leak go beyond just people who did business with the secretive company.  The details provided in the Panama Papers give authorities extensive insight into how transactions were structured and how money was moved.

The Panama Papers will also bring more scrutiny to the practice of holding funds offshore at a time when there is already significant focus on fighting offshore tax havens. Everyone with money offshore that is not declared should talk with a New Jersey criminal tax lawyer about what options may be available to them and how to best head off an investigation.

The Effects of the Panama Papers

The BBC reports that the director of the International Consortium of Investigative Journalists (ICIJ) described the leak of the Panama Papers as “probably the biggest blow the offshore world has ever taken because of the extent of the documents.” 

There are at least 60 people, with strong ties to either current world leaders or former world leaders, whose information was released in the Panama Papers. The leaks may show a link between close associates of Vladimir Putin and a money laundering scheme, and they have also revealed that the Prime Minister of Iceland failed to declare a financial interest in failing banks in his country.

The leaks also show that a millionaire and life coach in the United States was offered assistance by Mossack Fonseca to create fake ownership records aimed at hiding money from authorities.

More than 107 media organizations in 76 different countries are looking into stories involving world leaders and other public figures who may be implicated in money laundering or tax evasion by the information revealed in the Panama Papers. 

Some of the practices that appear to have taken place allegedly violate international regulations designed to prevent money laundering, as well as tax evasion. The violations of the law will be found not just by journalists but also by investigators of countries throughout the world.

The Panama Papers will reshape the offshore investment landscape further, at the same time as crackdowns continue to result in offshore banks giving information to taxing authorities. Contacting Kevin Thorn, a skilled criminal tax lawyer, is a prudent option for anyone with undeclared offshore funds who is concerned about their information being revealed and leading to legal action.