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Wednesday
Feb152017

Mossack Fonseca founders arrested after Panama raid

The two principal partners of the law firm at the center of the Panama Papers scandal were arrested for their alleged connection to Brazil's Car Wash investigation, according to reports.

Mossack Fonseca partners Jürgen Mossack (pictured far left) and Ramon Fonseca Mora were arrested Thursday after a year-long investigation by prosecutors from Brazil, Peru, Ecuador, Colombia, Switzerland, and the United States, Panama Attorney General Kenya Porcell said.

Prosecutors conducted a surprise raid on the Mossack Fonseca offices in Panama Thursday, the Organized Crime and Corruption Reporting Project (OCCRP) said.

Fonseca said his firm has "no relationship" with any companies implicated in the Operation Car Wash scandal.

Car Wash refers to the massive corruption investigation focused on a multi-billion bribery and kickback scheme at Brazil’s state oil and gas giant, Petrobras.

The Panama Papers are more than ten million leaked documents from Mossack Fonseca that identify the real owners of secret offshore companies. The documents were leaked to the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists (ICIJ) with the OCCRP.

In May last year, the ICIJ launched a searchable database that used the Panama Papers to index 320,000 offshore companies and the people behind them.

Since publication of the leaked documents, Mossack Fonseca has closed its offices in Jersey, Isle of Man, and Gibraltar. The firm also dissolved its Luxembourg office earlier this month.

At one time the firm had 44 offices worldwide. Jürgen Mossack founded his own firm in 1977. Ramon Fonseca Mora joined him in 1986 to create Mossack Fonseca.

Panama AG Porcell said Mossack Fonseca acted as a "criminal organization" that helped hide money that came from suspicious sources.

Mossack Fonseca allegedly instructed its "person in charge" in Brazil to help transfer bribe money connected to the Car Wash case to Panama and to hide the transfers by removing evidence, Porcell said.

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Richard L. Cassin is the publisher and editor of the FCPA Blog