US charges four in ‘Panama Papers’ tax evasion scheme

In this file photo taken on March 30, 2017 General view of the building where Panama-based Mossack Fonseca law firm offices are located, showing the sign identifying the firm was removed, in Panama City on March 30, 2017. (AFP)
Updated 05 December 2018
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US charges four in ‘Panama Papers’ tax evasion scheme

  • Prosecutors said that Gaffey, a 74-year-old US citizen, helped another unnamed client of the Mossack Fonseca conceal offshore bank accounts from US authorities

WASHINGTON/NEW YORK: US prosecutors announced Tuesday that they have charged four people with taking part in a decades-long scheme to evade US taxes that came to light after a massive leak of offshore financial data known as the “Panama Papers.”
Three of the four people have already been arrested, prosecutors said, in the first criminal case brought by US authorities in connection with Mossack Fonseca & Co, the Panamanian law firm at the center of the leak.
Harald Joachim von der Goltz, a client of the firm, was arrested in London on Monday; Dirk Brauer, an employee of an asset management company closely tied to the firm, was arrested in Paris on Nov. 15; and Richard Gaffey, a US-based accountant, was arrested in Massachusetts on Tuesday, according to prosecutors.
The fourth defendant, Ramses Owens, was a lawyer at Mossack Fonseca and remains at large, prosecutors said. The law firm shut down earlier this year.
Bill Lovett, a lawyer for Gaffey, could not immediately be reached for comment. Lawyers for the other three defendants could not immediately be identified.
The most serious charges in the case, which include wire fraud and money laundering conspiracy, carry a maximum sentence of 20 years in prison.
In an indictment unsealed in Manhattan federal court, prosecutors said that from 2000 to 2017, Owens and Brauer conspired to help clients of Mossack Fonseca conceal assets, investments and income from US tax authorities, using sham foundations and shell companies formed under the law of countries including Panama, Hong Kong and the British Virgin Islands. Owens, 50, is a citizen of Panama and Brauer, 54, is German citizen, prosecutors said.
One of those clients was von Der Goltz, an 81-year-old German citizen, according to the indictment. Prosecutors said that Owens and Gaffey helped von Der Goltz avoid taxes by creating shell companies and bank accounts that he falsely claimed were solely owned by his elderly mother, a Guatemalan citizen who did not pay US taxes.
Prosecutors also said that Gaffey, a 74-year-old US citizen, helped another unnamed client of the Mossack Fonseca conceal offshore bank accounts from US authorities.
The “Panama Papers,” which consist of millions of documents from Mossack Fonseca, were leaked to the media in April 2016.
A review of the documents also prompted German authorities to raid the offices of Deutsche Bank AG and its board members as part of a money laundering investigation last week.


Trump declares emergency for US-Mexico border wall, House panel launches probe

Updated 16 February 2019
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Trump declares emergency for US-Mexico border wall, House panel launches probe

  • The Republican president’s move, circumventing Congress, seeks to make good on a 2016 presidential campaign pledge to build a border wall
  • Within hours, the action was challenged in a lawsuit filed on behalf of three Texas landowners

WASHINGTON: President Donald Trump on Friday declared a national emergency in a bid to fund his promised wall at the US-Mexico border without congressional approval, an action Democrats vowed to challenge as a violation of the US Constitution.

The Republican president’s move, circumventing Congress, seeks to make good on a 2016 presidential campaign pledge to build a border wall that Trump insists is necessary to curtail illegal immigration he blames for bringing crime and drugs into the United States.

Within hours, the action was challenged in a lawsuit filed on behalf of three Texas landowners, saying that Trump’s declaration violates the US Constitution and that the planned wall would infringe on their property rights.

Both California and New York said that they, too, planned to file lawsuits.

Hours after Trump’s announcement, the Democratic-controlled House of Representatives’ Judiciary Committee said it had launched an investigation into the emergency declaration.

In a letter to Trump, committee Democrats asked him to make available for a hearing White House and Justice Department officials involved in the action. They also requested legal documents on the decision that led to the declaration, setting a deadline of next Friday.

“We believe your declaration of an emergency shows a reckless disregard for the separation of powers and your own responsibilities under our constitutional system,” said the letter, signed by Chairman Jerrold Nadler and other top Democrats on the panel.

Trump has been demanding for a wall on the 2,000-mile (3,200-kilometer) southern border

Trump on Friday also signed a bipartisan government spending bill that would prevent another partial government shutdown by funding several agencies that otherwise would have closed on Saturday.

The funding bill represented a legislative defeat for him since it contains no money for his proposed wall — the focus of weeks of conflict between Trump and Democrats in Congress.

Trump made no mention of the bill in rambling comments to reporters in the White House’s Rose Garden.

He had demanded that Congress provide him with $5.7 billion in wall funding as part of legislation to fund the agencies. That triggered a historic, 35-day government shutdown in December and January that hurt the US economy and his opinion poll numbers.

By reorienting his quest for wall funding toward a legally uncertain strategy based on declaring a national emergency, Trump risks plunging into a lengthy legislative and legal battle with Democrats and dividing his fellow Republicans — many of whom expressed grave reservations on Friday about the president’s action.

Fifteen Democrats in the Republican-controlled Senate introduced legislation on Thursday to prevent Trump from invoking emergency powers to transfer funds to his wall from accounts Congress has already committed to other projects.

Nancy Pelosi, the Democratic speaker of the House, and top Senate Democrat Chuck Schumer swiftly responded to Trump’s declaration.

“The president’s actions clearly violate the Congress’s exclusive power of the purse, which our Founders enshrined in the Constitution,” they said in a statement. “The Congress will defend our constitutional authorities in the Congress, in the courts, and in the public, using every remedy available.”

Members of the migrant caravan that has made its way from central America to the US-Mexico border

The first legal challenge, filed in federal court in Washington, came from three Texas landowners along the Rio Grande river claiming they were informed the US government would seek to build a border wall on their properties if money for the project were available in 2019.

The lawsuit, filed on their behalf by the consumer advocacy group Public Citizen, also named the Frontera Audubon Society as a plaintiff whose “members’ ability to observe wildlife will be impaired” by construction of a border wall and resulting habitat damage.

The suit contests Trump’s assertion of a national emergency at the border to justify the president’s action.

California Governor Gavin Newsom, a Democrat, describing the supposed border crisis touted by Trump as “made-up,” and New York state’s Democratic attorney general, Letitia James, both said they planned to challenge Trump in court.

Trump acknowledged his order would face a lengthy court fight.

“I expect to be sued. I shouldn’t be sued. ... We’ll win in the Supreme Court,” he predicted.

Trump may have also undermined his administration’s argument about the urgency of the situation when he told reporters, “I didn’t need to do this. But I’d rather do it much faster.”

In their letter to Trump, House Judiciary Democrats said that language had left them “troubled.”

Both the House and the Senate could pass a resolution terminating the emergency by majority vote. However, any such measure would then go to Trump, who would likely veto it. Overriding the veto would require a two-thirds vote in both chambers.

Although Trump says a wall is needed to curb illegal immigrants and illicit drugs coming across the border, statistics show that illegal immigration via the border is at a 20-year low and that many drug shipments come through legal ports of entry.

Confronted with those statistics by reporters at the Rose Garden event, Trump said they were “wrong.”

Also present were a half-dozen women holding poster-sized pictures of family members killed by illegal immigrants. Trump noted their presence in announcing the emergency declaration.

He estimated his emergency declaration could free up as much as $8 billion to pay for part of the wall. Estimates of its total cost run as high as $23 billion.

As a candidate, Trump repeatedly promised Mexico would pay for the wall. It was one of his biggest applause lines at his campaign rallies. Mexico firmly refused to pay, and now Trump wants US taxpayers to cover the costs.