Quantcast i24NEWS - How the rich got richer: massive document leak reveals billions in hidden assets

How the rich got richer: massive document leak reveals billions in hidden assets

Fantasy sports websites offer fans the chance to make money by assembling fantasy American football or baseball lineups, which then score points based on the performances of real athletes
Adek Berry (AFP)
11 million documents going back 40 years allegedly include 72 current or former heads of state

A massive leak of 11 million documents from Panama based law firm Mossack Fonseca show how the world's elite, including 72 current or former heads of state have been hiding billions of dollars in assets.

According to the BBC, Mossack Fonseca, one of the world's most secretive firms, aides its clients with money laundering, tax evasion, creating shell companies and eluding sanctions. These clients include 140 politicians from 50 different countries.

Among those allegedly included in the documents are friends and family of Russian President Vladimir Putin, nearly 600 Israeli companies and 850 Israeli shareholders, and Icelandic Prime Minister Sigmundur Gunnlaugsson.

According to the BBC, the documents were obtained by the German newspaper Suddeutsche Zeitung from an un-named source and shared with the International Consortium of Investigative Journalists (ICIJ).

ICIJ director Gerard Ryle said the documents cover business dealings at Mossack Fonseca going back 40 years.

"I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents," Ryle said.

The Israeli daily Haaretz reports that a number of prominent names were included on the list of shareholders that was leaked. However, as long as company holdings and revenues are declared to Israel's tax authority, these shareholders would not have broken any laws.

The head of Mossack Fonseca's Israel branch, attorney Amir Maor told Haaretz that the branch was told last week that a breach in the firm's computer systems had led to the theft of numerous files.

“Any information you use [from these files] is like using stolen data,” he told Haaretz, without giving additional details.

Also included in the leak is a trail of $2 billion linking close friends and family of Russian President Vladimir Putin, said the British daily the Guardian.

Putin himself was not named in the documents, however, data patterns in the documents show deals and earnings that likely could not have occurred without his influence.

One of the examples in the documents concerns St. Petersburg's Bank Rossiya, which the Guardian said is described as Putin's "crony bank," and which the US placed under sanctions in 2014 after Russia invaded Ukraine.

According to the Guardian, Bank Rossiya is headed by Yuri Kovalchuk, who the US claims is the “personal banker” for a number of senior Russian government officials, Putin included.

The leaked documents reportedly reveal that Kovalchuk and Bank Rossiya transferred at least $1 billion to an unknown offshore company titled Sandalwood Continental Ltd.

The money trail shows that these funds were given to Bank Rossiya as part of a series of unsecured loans from the government controlled Russian Commercial Bank (RCB) which operates in Cyprus, and other state banks, said the Guardian.

Once transferred off-shore, these funds were among other things then lent back to entities in Russia at extremely high interest rates, used to buy a $6 million yacht and given as extremely low-interest cash loans to member's of Putin's circle, said the Guardian.

In a third case, the Mossack Fonseca documents show that Iceland's Prime Minister Sigmundur Gunnlaugsson and his wife bought an offshore company called Wintris in 2007, which was registered in the British Virgin Islands, says Haaretz.

Upon entering parliament in 2009, Gunnlaugsson did not declare an interest in the company, and instead, eight months later sold his half of the company to his wife for $1.

Wintris reportedly held millions of dollars worth of bonds from three large Iceland banks, said Haaretz. When the banks collapsed in the 2008 world financial crisis, Gunnlaugsson and his wife became the debtors of one bank after it declared bankruptcy.

When Iceland's government conducted negotiations with bank debtors in 2015, Gunnlaugsson did not reveal that his family held a financial interest in the outcome.

According to the BBC, Gunnlaugsson is facing calls for his resignation.

Gunnlaugsson's wife however, posted on Facebook that the company was 100 percent hers and that she had paid all its taxes, said Haaretz.


8Previous articleYellen confident in US growth but stresses 'gradual' rate hikes
8Next article'Panama Papers' show Syria regime circumvented sanctions: report