New Panama Papers identify dozens of Americans with dubious legal histories

When the first emerged the Panama Papers barely touched on a single American

Mossack Fonseca offices in Panama City (AP)

At least three dozen Americans with legal entanglements in their personal histories did business with the law firm at the heart of the Panama Papers affair, it has now emerged.

Previous revelations tied to internal papers of the Panama law firm Mossack Fonseca had barely touched on any US citizens. That changed on Monday, however, as the group of news organizations that has been reviewing the leaked memos in association with the International Consortium of Investigative Journalists (ICIJ), made the entire data trove public for the first time.

Most of the US citizens now being cited in relation to the documents bought shell companies or overseas trusts with the help of Mossack Fonseca. While purchasing such entities is itself not illegal, criminality is introduced if they are used for laundering, fraud or tax evasion purposes.

Since finding itself at the heart of the Panama Papers maelstrom, Mossack Fonseca has asserted that it has never knowingly done business with individuals burdened by any legal red flags. Over years it has set up more than 100,000 overseas entities for its customers, however, which brings into question how effective its vetting system with such a large turnover can be.

Among those American names which have now surfaced in connection with the Panama firm is Len Gotshalk, a former Atlanta Falcons football star who was charged in 2010 with being a key player in a kickbacks scheme to inflate stocks of tech companies. Three days later, he bought a British Virgin Islands shell company that Mossack Fonseca had set up.

That the company seemed actively to have avoided US-based clients may have been to do with the strict ethical oversight laws in the US. In an interview with the Associated Press, firm co-founder Ramón Fonseca said that “as a policy we prefer not to have American clients”.

The full trove of data now available online includes 11 million leaked documents on 200,000 entities in 21 jurisdictions from Hong Kong, to the Bahamas and British Virgin Islands and even Nevada in the US. The leaked documents were initially conveyed to the German publication the Süeddeustche Zeitung, which then reached out to the ICIJ for help in analysing them.

Mr Gotshalk paid $3,055 for the shell company that was called Irishmyst Consultants Limited. Mossack Fonseca at first declined to take his business precisely because of “negative” information that showed up in background checks of his record. However, the company relented and agreed to do business with him when he appealed the decision, reported the Washington Post, which is part of the media consortium making the data public.

While the Gotshalk connection stands out, it now emerges that quite the parade of other Americans accused of fraud or other serious financial misdeeds reached out to the Panama law firm for help. including Martin Frankel, a Connecticut financier whose criminal dealings two decades ago caused hundreds of millions of losses for his victims. He served 17 years in prison.

Ensconced before his imprisonment in a sprawling and highly fortified Greenwich, Connecticut, mansion, Frankel was also accused at the time of soliciting a number of women through classified ads for sadomasochistic sex.

Also named is Andrew Wiederhorn an executive who pleaded guilty to two felonies connected to one of the largest corporate scandals in Oregon’s history. He was given a 12-month sentence. Also named are six Americans all accused a federal lawsuit in Washington state of setting up a company through Mossack Fonseca that perpetrated a Ponzi scheme that stole more than $100 million from a collection of unsuspecting, middle class Indonesians.

The release of a first cache of data from the papers six weeks ago sent tremors globally because they identified several sitting and former world leaders with links to Mossack Fonseca or entities it created. They included friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine.

The only new world leader to emerge in connection to the firm yesterday was Mauricio Macri, recently elected President of Argentina named as a former director of Bahamas-based Fleg Trading. Mr Macri said it was founded by his father as a vehicle to make investments in Brazil but he had never benefited from it financially.