Panama Papers (North America)
The Panama Papers are 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities. The documents, some dating back to the 1970s, were created by, and taken from, Panamanian law firm and corporate service provider Mossack Fonseca, and were leaked in 2015 by an anonymous source. This page details related allegations, reactions, and investigations, in North America. Canada. Canadian prime minister Justin Trudeau has denied any involvement in the affair, saying he had "entirely and completely been transparent about mine and my family's finances. That is something I  learned early on that Canadians expect from their leaders." Canada Revenue Agency said in a statement that its current tax evasion audits include "some Canadian clients associated with law firm Mossack Fonseca," and added that it would "communicate" with its treaty partners to obtain any further information that may not currently be in its possession." The CRA has tax treaties with 92 different countries and 22 Tax Information Exchange Agreements. The CRA has begun or completed 116 audits and 234 more are planned. These investigations are expected to recoup at least $11 million in taxes and fines. Fewer than  10 related criminal investigations are in progress. The Royal Bank of Canada (RBC) denied any wrongdoing associated with the 370+ clients it had referred to Mossack Fonseca over the years."We have an extensive due diligence process... RBC works within the legal and regulatory framework of every country in which we operate," said a bank spokesman. CEO David McKay said the bank will review the four decades of documentation for any problems. CEO Bill Downe of the Bank of Montreal said "Canadian banks have 'dramatically' beefed up anti-money laundering control over the last seven to 10 years," and  added that any link between Canadian businesses and the Panama Papers companies would have originated a long time ago, before Canadian banks took action to stop money laundering. Some individuals did surface in the leaked documents, according to ICIJ partner in the investigation "Toronto Star". Canadians for Tax Fairness had calculated that legal tax avoidance by corporations alone cost the Canadian treasury almost $8 billion Canadian a year. When it calculated the 2015 numbers, they found that corporations and individuals combined sent CAN$40 billion of declared assets to tax havens, and the ten most popular alone now held $ 270 billion Canadian in assets. Costa Rica. The administration of President Luis Guillermo Solís suggested that some of the activity unveiled by the leaked documents suggests attempts to evade taxes. His administration's effort to implement tax increases and reforms has met strong resistance from opposition and business figures. Leaked documents suggest that Mossack Fonseca helped tuna export company Borda Azul set up a shell company in the British Virgin Islands in order to avoid Costa Rican taxes. The firm, now out of business, was headed by Hermes Navarro, president of the Costa Rican Football Federation from 1999 to 2006 . In the late 1990s the Finance Ministry and Prosecutor's Office investigated Borda Azul and other export companies for allegedly misusing tax credit certificates; in 1997 dozens of companies had been accused of using the certificates for fraud and to launder drug profits. According to ICIJ investigative partners DataBaseAR and Seminario Universidad, Mossack Fonseca helped Borda Azul fabricate invoices to allow it to report both inflated costs—to reduce its taxes—and inflated exports, to allow it to continue to qualify for the tax credit certificates. In a letter dated October 19, 1998, a Mossack Fonseca lawyer explained the investigation  to the Panama City office and concluded: More than thirty Costa Rican law firms are mentioned in the Panama Papers as referring clients to Mossack Fonseca, resulting in the creation of more than 360 shell companies. in particular Gonzalo Fajardo & Asociados, founded by former Finance Ministry official and later Economy Minister Gonzalo Fajardo Salas, and over nearly two decades helped Costa Rican companies set up 82 offshore corporations in tax havens, according to DataBaseAR. Finance Vice Minister Fernando Rodríguez said Costa Rica will push to sign a Tax Information Exchange Agreement with Panama. Legislators from several parties are trying to  line up political consensus to seek approval of the administration's tax fraud bill and to form a legislative commission to investigate those named in the Panama Papers, according to Emilia Molina Cruz of the Citizens' Action Party. While opposition parties have maintained that the country's financial problems stem from excess spending, according to the Finance Department, the sums Costa Rica loses to tax evasion equal about 8% of the country's gross domestic product, while its deficits have run at about 6%. Mexico. Aristóteles Núñez, in charge at the time of the government's tax administration, , said that  people involved in the Panama Papers case can still make tax declarations and pay taxes on their investments. Being Mexican and having foreign investments or bank accounts is not a crime, but having income and not declaring it is illegal. If investments are categorized as tax evasion, fines of up to 100% of the omitted tax payment can result, as well as three months to nine years imprisonment. According to "Forbes", "Hinojosa and other prominent Mexicans, mostly businessmen with close ties to the government, including at least one member of the Forbes billionaires list, were the subject of extensive articles  published online by ICIJ investigation partners "Proceso" and "Aristegui Noticias Sunday"." Proceso also said that the Mexicans mentioned in the leaked documents included individuals linked to drug cartels. Trinidad and Tobago. Ken Emrith, a member of the opposition United National Congress (UNC), is linked to a bribery scandal in Brazil through Panamanian shell companies used to transfer millions of US dollars to offshore bank accounts. The Brazilian construction company was awarded a contract in 2011 through the National Infrastructure Development Company (NIDCO) by the People's Partnership administration to build a highway in Trinidad for TT$5.2 billion. The highway is  49% complete, but it is now estimated that the highway will cost TT$8 billion when done. Investigators have found that Emirth's companies received $6 million from NIDCO and that Emirth was also a director of Pembury Consultants (Trinidad and Tobago) Limited, which OAS hired on the highway project as a consultant at $44,800 a month. Through May 2013 OAS paid Pembury at least TT$896,000; totals beyond that date are not currently available. Emrith, described as a low-level UNC party official, had a second Mossack Fonseca company, Pendrey Associates. Speaking in Parliament, Attorney General Faris Al-Rawi  said the leaked documents tied this offshore company to key players in the Petrobras scandal in Brazil, including the convicted , and Jose Luiz Pires of Queluz, who had dealings with Swiss AG. Pires is under investigation, he said. According to ICIJ investigative partner "Trinidad Express", Emrith was a close associate of Jack Warner and also owns half the shares in Proteus Holding SA, an investment he refuses to discuss because he says he has a responsibility of confidentiality to fellow shareholders. The "Express" also says that OAS used a Namibian port development project as camouflage for a $1 million  payment from Procopio shell company Santa Tereza Services Ltd to Emirth. United States. President Barack Obama was critical of Caribbean tax havens in his 2008 election campaign. In 2010, the United States implemented the Foreign Account Tax Compliance Act; the law required financial firms around the world to report accounts held by US citizens to the Internal Revenue Service. The US isn't a signatory to the Common Reporting Standard set up by the Organisation for Economic Co-operation and Development, alongside Vanuatu and Bahrain. At least 2,400 US-based clients were found in the papers; while many of their  transactions were legal, Mossack Fonseca offered advice to many of its US clients on how to evade US tax and financial disclosure laws. On 7 February 2020, federal prosecutors announced that they will obtain their first conviction in relation to the disclosures. On 18 February 2020, Harald Joachim von der Goltz, an 82-year-old former businessman and former U.S. resident who was a client for Mossack Fonseca, pleaded guilty to nine counts, including charges of conspiracy to evade taxes and commit money laundering and wire fraud. He is the first to plead guilty in the U.S. in connection to  the Panama Papers leak. On February 28, 2020, a Massachusetts accountant, Richard Gaffey, became the second person to plead guilty to charges related to the Panama Papers. Judgments against both von der Goltz and Gaffey were delivered in September 2020 in the United States District Court for the Southern District of New York, resulting in 87 months imprisonment and over $17.7 million in asset forfeitures, restitutions, and fines between the two defendants. Panama Free Trade Agreement. The Panama Free Trade Agreement, supported by Obama and Clinton, has been accused of enabling the practices detailed within the Panama Papers through  regulatory oversight. However, an Obama administration official said the argument has "zero merit". John Cassidy of "The New Yorker," said the Panama Free Trade Agreement actually forced Panama to release information to the American regulatory authorities on "the ownership of companies, partnerships, trusts, foundations, and other persons". Citing leaked diplomatic cables, "Fortune" writer Chris Matthews speculated that Obama and Clinton may have supported the agreement, after opposing it while campaigning for office, because it was a "quid pro quo" for Panamanian support of US efforts against drug trafficking. In any event, he notes, while it is true that the agreement  abolished limits on fund transfers between the US and Panama, the Obama administration insisted that the two countries first sign a Tax Information and Exchange Agreement as well, which facilitated the exchange of tax information between the countries. After the leak. President Barack Obama addressed the overseas shell companies listed by the leak in a press conference: "It's not that they're breaking the laws," he said, "it's that the laws are so poorly designed that they allow people, if they've got enough lawyers and enough accountants, to wiggle out of responsibilities that ordinary citizens are having  to abide by." Although no leader in the US was mentioned in the Panama Papers, Obama said that "Frankly, folks in America are taking advantage of the same stuff". Senators Sherrod Brown and Elizabeth Warren have requested that the Treasury Department investigate any US-linked companies that appeared in the leaks, in addition to the Justice Department, given its role in the financial markets. Former Secretary of State and 2016 Democratic presidential candidate Hillary Clinton condemned "outrageous tax havens and loopholes ... in Panama and elsewhere" at a Pennsylvania AFL–CIO event. Clinton added that "some of this behavior is clearly  against the law, and everyone who violates the law anywhere should be held accountable", but it was "scandalous how much is actually legal". Clinton promised that "We are going after all these scams and make sure everyone pays their fair share here in America." Manhattan US Attorney Preet Bharara has opened a criminal investigation on matters related to the Panama Papers and sent a letter April 3 to the International Consortium of Investigative Journalists (ICIJ) saying his office "would greatly appreciate the opportunity to speak as soon as possible." The ICIJ received many such requests from many countries and ICIJ  Director Gerard Ryle has said its policy is not to turn over any materials. New York's Department of Financial Services has asked 13 foreign banks, including Deutsche Bank AG, Credit Suisse Group AG, Commerzbank AG, ABN Amro Group NV and Societe Generale SA, for information about their dealings with Mossack Fonseca. The banks are not accused of wrongdoing but must provide telephone logs and records of other transactions between their New York branches and the law firm. Americans. McClatchy Newspapers initially found four Americans with offshore shell companies named in the documents. All had previously been either accused or  convicted of financial crimes such as fraud or tax evasion. Three reasons have been suggested to explain the scarcity of Americans in the leak: Asked about the paucity of American individuals in the documents, digital editor of "Süddeutsche Zeitung," Stefan Plöchinger, said via Twitter: "Just wait for what is coming next." Plöchinger later clarified that he was just advocating not jumping to conclusions. Copies of at least 200 American passports – indicating that their owners applied for banking services – have been discovered in the Papers, but no US politicians have yet been named in the leak. The names of a few  Americans are however mentioned: