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Mossack Fonseca closes Luxembourg office days before bosses arrested
Economics

Mossack Fonseca closes Luxembourg office days before bosses arrested

2 min. 13.02.2017 From our online archive
Ten months after the publication of the so-called "Panama Papers", financial service provider Mossack Fonseca closed one of its offices in Luxembourg, just days before founders Jürgen Mossack and Ramon Fonseca Mora were arrested in relation to a corruption scandal.

(ndp/sth/AFP)  Ten months after the publication of the so-called "Panama Papers", financial service provider Mossack Fonseca closed one of its offices in Luxembourg, just days before founders Jürgen Mossack and Ramon Fonseca Mora were arrested in relation to a corruption scandal.

According to the Luxembourg business registry the company "Mossack Fonseca S.à.r.l." was dissolved on February 2, 2017. Mossack Fonseca is represented by two companies in Luxembourg, Mossack Fonseca S.à r.l. and Mossfon Luxembourg S.à r.l. The latter has been the "official" office of the firm in Luxembourg since March 2009 and continues to exist.

Consolidation of office network

After the "Panama Papers" revelations the firm did close its offices in various British tax havens such as Jersey, Isle of Man and Gibraltar.

Mossack Fonseca justified this as being part of a strategy to "consolidate the office network". Nevertheless, the company's services would continue to be available to "all" customers, the Panamanian company said in a statement.

Mossack Fonseca had 44 offices worldwide. The company was founded in 1977 by Jürgen Mossack as "Jürgen Mossack Lawfirm". In 1986 Mossack joined forces with Ramon Fonseca Mora.

The law firm came to notorious fame worldwide in April 2016 after an international network of investigative journalists had reported on more than 200,000 letterbox companies founded by the law firm, in which politicians, athletes and celebrities allegedly to have parked their assets. The revelations led to investigations around the world and a renewed debate on tax havens and money laundering.

Named partners under arrest

The closure of the office in Luxembourg came days before founders Ramon Fonseca Mora and Jürgen Mossack were being held as part of a probe into a sprawling graft case involving Brazilian construction group Odebrecht.

They were put in preventive detention late Thursday by Panamanian authorities, one of their attorneys said. Chief prosecutor Kenia Procell said the law firm was suspected of money-laundering and forming "a criminal organization that sought to hide assets and money of doubtful origin."

She alleged the firm also "got rid of evidence" implicating people in Brazil's "Car Wash" corruption scandal, in which the Brazilian national oil company Petrobras allegedly gave Odebrecht and other contractors inflated contracts in return for bribes.

Mossack Fonseca's attorney, Elias Solano, said there was a "lack of evidence" supporting the allegations.

On Thursday, as he turned up at the prosecutors' office to answer questions, Fonseca told reporters that Panamanian President Juan Carlos Varela -- a former friend -- had confided in him that he had accepted "donations" from Odebrecht.

Varela denied the accusation, saying "there were no donations from the Odebrecht company" to his 2014 electoral campaign. Fonseca used to be a high-ranking advisor to Varela but was dismissed when the Panama Papers scandal broke in April last year.

The vast data leak from the Mossack Fonseca law firm detailed how the world's wealthy stashed assets in offshore companies. Several countries in Latin America, among them Panama, Mexico, Argentina, Peru and Uruguay, are carrying out investigations into bribes paid by Odebrecht.

In December, the Brazilian construction company agreed with the US Justice Department to pay a world record $3.5-billion fine after admitting it paid $788 million in bribes to win fat construction contracts in 12 countries.

More revelations are expected soon because current and former Odebrecht executives have signed tell-all plea deals in Brazil in exchange for lighter sentences. In Panama, ex-president Ricardo Martinelli's son and brother are under investigation.