Firm at the center of controversy over tax evasion cites economic and reputational damage in announcement

This article is more than 1 year old

This article is more than 1 year old

A Panamanian law firm at the center of the Panama Papers scandal has announced it is shutting down.

The directors of Mossack Fonseca blamed the economic and reputational damage inflicted by its role in the global tax evasion debacle for the closure.

Leaked files from the company were the basis of the Panama Papers investigation in early 2016, provoking a global scandal after showing how the rich and powerful used offshore corporations to evade taxes.

Panama Papers: inside the Guardian's investigation into offshore secrets Read more

“The reputational deterioration, the media campaign, the financial circus and the unusual actions by certain Panamanian authorities, have occasioned an irreversible damage that necessitates the obligatory ceasing of public operations at the end of the current month,” the firm said in a statement on Wednesday.

Mossack Fonseca said a skeleton staff would remain in order to comply with requests from authorities and other public and private groups.

Nonetheless, the law firm said it would continue “fighting for justice”, adding it would continue to cooperate with authorities.

Founded in 1977 by the German lawyer Jürgen Mossack, it was the world’s fourth-biggest provider of offshore services at the time the scandal erupted. Mossack was joined by the Panamanian lawyer Ramón Fonseca and a third director, the Swiss lawyer Christoph Zollinger, was later added.

Until the publication of the Panama Papers, it had been mostly obscure despite sitting at the heart of the global offshore industry and acting for about 300,000 companies. More than half were registered in British tax havens – as well as in the UK.

Last month, Panamanian prosecutors raided the offices of Mossack Fonseca, seeking possible links to Odebrecht, Latin America’s largest engineering company. The Brazilian construction firm has admitted to bribing officials in Panama and other countries to obtain contracts in the region between 2010 and 2014.

Ramón Fonseca denied last month that his firm had a connection to Odebrecht, while accusing the Panamanian president, Juan Carlos Varela, of directly receiving money from Odebrecht.

Varela has denied that he took any money from Odebrecht.</s>The firm at the centre of the Panama Papers scandal says it is closing its doors due to the economic and reputational damage caused by its role in the global tax evasion debacle.

Mossack Fonseca is keeping on a skeleton staff to comply with requests from authorities (Credit: Reuters)

Mossack Fonseca, the law firm at the centre of the Panama Papers scandal, says it is shutting down due to the economic and reputational damage inflicted by its role in the global tax evasion debacle.

The so-called Panama Papers, which consist of millions of documents stolen from Mossack Fonseca and leaked to the media in April 2016, provoked a global scandal after showing how the rich and powerful used offshore corporations to evade taxes.

"The reputational deterioration, the media campaign, the financial circus and the unusual actions by certain Panamanian authorities have occasioned an irreversible damage that necessitates the obligatory ceasing of public operations at the end of the current month," the firm said in a statement.

Mossack Fonseca said a skeleton staff would remain in order to comply with requests from authorities and other public and private groups.

Nonetheless, the law firm said it would continue "fighting for justice", adding it would continue to cooperate with authorities.

Last month Panamanian prosecutors raided the offices of Mossack Fonseca, seeking possible links to Brazilian engineering company Odebrecht.

The Brazilian construction firm has admitted to bribing officials in Panama and other countries to obtain contracts in the region between 2010 and 2014.

Ramon Fonseca, a partner at Mossack Fonseca, denied last month that his firm had a connection to Odebrecht, while accusing Panamanian President Juan Carlos Varela of directly receiving money from Odebrecht, Latin America's largest engineering company.

Mr Varela has denied that he took any money from Odebrecht.</s>Mossack Fonseca, the Panamanian law firm at the center of the “Panama Papers” scandal, said on Wednesday it was shutting down due to the economic and reputational damage inflicted by its role in the global tax evasion debacle.



The so-called Panama Papers, which consist of millions of documents stolen from Mossack Fonseca and leaked to the media in April 2016, provoked a global scandal after showing how the rich and powerful used offshore corporations to evade taxes.

“The reputational deterioration, the media campaign, the financial circus and the unusual actions by certain Panamanian authorities, have occasioned an irreversible damage that necessitates the obligatory ceasing of public operations at the end of the current month,” the firm said in a statement.

Mossack Fonseca said a skeleton staff would remain in order to comply with requests from authorities and other public and private groups.

Nonetheless, the law firm said it would continue “fighting for justice,” adding it would continue to cooperate with authorities.

Last month, Panamanian prosecutors raided the offices of Mossack Fonseca, seeking possible links to Brazilian engineering company Odebrecht. The Brazilian construction firm has admitted to bribing officials in Panama and other countries to obtain contracts in the region between 2010 and 2014.

Ramon Fonseca, a partner at Mossack Fonseca, denied last month that his firm had a connection to Odebrecht, while accusing Panamanian President Juan Carlos Varela of directly receiving money from Odebrecht, Latin America’s largest engineering company.

Varela has denied that he took any money from Odebrecht.</s>Mossack Fonseca, the Panama law firm at the centre of the "Panama Papers" scandal, said on Wednesday it was shutting down due to the economic and reputational damage inflicted by its role in the global tax evasion debacle.

The so-called Panama Papers, which consist of millions of documents stolen from Mossack Fonseca and leaked to the media in April 2016, provoked a global scandal after showing how the rich and powerful used offshore corporations to evade taxes.

"The reputational deterioration, the media campaign, the financial circus and the unusual actions by certain Panamanian authorities, have occasioned an irreversible damage that necessitates the obligatory ceasing of public operations at the end of the current month," the firm said in a statement.

Mossack Fonseca said a skeleton staff would remain in order to comply with requests from authorities and other public and private groups.</s>The law firm involved in the Panama Papers scandal Mossack Fonseca is going to close at the end of March, the firm's statement obtained by the International Consortium of Investigative Journalists (ICIJ) reads.

READ MORE: Panama Papers One Year On: 'Little Due Diligence,' Laws Not Enforced

The company cited "irreparable damage," caused by the reputational damage, as well as economic losses the firm suffered after the global tax evasion scandal erupted as the reasons for shutting down. As a result, Mossack Fonseca announced the "ceasing of public operations" at the end of March.

In 2016, Mossack Fonseca became involved in a major debacle after thousands of its leaked files, which revealed the allegedly illegal financial practices of officials and public figures from various countries, were published by the ICIJ. Mossack Fonseca refused to confirm that the leaked papers were authentic, although it claimed that it had been hacked.

READ MORE: Soros' Vendetta? What's Behind the Panama Papers Leak

Last year the story got its continuation when 13.4 million new documents, dubbed the "Paradise Papers," were released by the ICIJ. This time the published materials were based on a leaked database of offshore activities of powerful individuals and corporations. The database contained information about a number of prominent figures, including members of US President Donald Trump's administration, Apple and Uber and even Queen Elizabeth II of the UK.</s>"Reputational deterioration, the media campaign, the financial consequences and irregular actions by some Panamanian authorities have caused irreparable damage, resulting in the total ceasing of public operations at the end of this month," Mossack Fonseca said in a statement.

[PANAMA CITY] The law firm at the heart of the "Panama Papers" global tax evasion scandal that brought down two world leaders announced on Wednesday it would shut down operations, citing negative press and what it called unwarranted action by authorities.

"Reputational deterioration, the media campaign, the financial consequences and irregular actions by some Panamanian authorities have caused irreparable damage, resulting in the total ceasing of public operations at the end of this month," Mossack Fonseca said in a statement.

But it added a smaller group would continue working to address requests from authorities and other public and private groups.

Last August, co-founder Jurgen Mossack acknowledged the firm had closed most of its offices abroad after its damaged credibility caused business to flounder.

April 3, 2016 marked the beginning of the "Panama Papers" scandal - a leak of 11.5 million files from Mossack Fonseca's digital archive that revealed how wealthy and influential figures across the world had created offshore businesses to safeguard assets.

The information was obtained by German newspaper Sueddeutsche Zeitung, who shared it with the International Consortium of Investigative Journalists. It was released as a searchable database, with revelations continuing to be unearthed to this day.

Icelandic prime minister Sigmundur David Gunnlaugsson was forced to resign after it was revealed his family had offshore accounts - while former Pakistani prime minister Nawaz Sharif was disqualified for life from office after being implicated in the documents.

Other figures implicated included former British premier David Cameron, football star Lionel Messi, Argentina's President Mauricio Macri, Spanish filmmaker Pedro Almodovar, to name but a few.

At least 150 investigations were opened in 79 countries to examine possible tax evasion and money laundering, according to the US-based Center for Public Integrity.</s>The law firm at the centre of Panama Papers tax scandal has shut down.

Millions of documents were stolen from Panamania company Mossack Fonseca and leaked to the media in 2016.

They exposed the tax dodging of the rich and famous including former Primer Minister David Cameron .

"The reputational deterioration, the media campaign, the financial circus and the unusual actions by certain Panamanian authorities, have occasioned an irreversible damage that necessitates the obligatory ceasing of public operations at the end of the current month," Mossack Fonseca said in a statement.

The firm said a skeleton staff would remain in order to comply with requests from authorities and other public and private groups.

Nonetheless, the law firm said it would continue "fighting for justice," adding it would continue to cooperate with authorities.

Last month, Panamanian prosecutors raided the offices of Mossack Fonseca, seeking possible links to Brazilian engineering company Odebrecht.

The Brazilian construction firm has admitted to bribing officials in Panama and other countries to obtain contracts in the region between 2010 and 2014.

Ramon Fonseca, a partner at Mossack Fonseca, denied last month that his firm had a connection to Odebrecht, while accusing Panamanian President Juan Carlos Varela of directly receiving money from Odebrecht, Latin America's largest engineerin company.

Varela has denied that he took any money from Odebrecht.</s>The firm at the heart of the "Panama Papers" global evasion scandal that brought down two world leaders announced today it would shut down operations, citing negative press and what it called unwarranted action by authorities.

"Reputational deterioration, the media campaign, the financial consequences and irregular actions by some Panamanian authorities have caused irreparable damage, resulting in the total ceasing of public operations at the end of this month," said in a statement.

But it added a smaller group would continue working to address requests from authorities and other public and private groups.

Last August, acknowledged the firm had closed most of its offices abroad after its damaged credibility caused business to flounder.

April 3, 2016 marked the beginning of the "Panama Papers" scandal -- a leak of 11.5 million files from Mossack Fonseca's digital archive that revealed how wealthy and influential figures across the world had created offshore businesses to safeguard assets.

The information was obtained by German newspaper Sueddeutsche Zeitung, who shared it with the Consortium of Investigative Journalists. It was released as a searchable database, with revelations continuing to be unearthed to this day.

Icelandic was forced to resign after it was revealed his family had offshore accounts -- while former Pakistani was disqualified for life from office after being implicated in the documents.

Other figures implicated included former British David Cameron, football star Lionel Messi, Argentina's Mauricio Macri, Spanish filmmaker Pedro Almodovar, to name but a few.

At least 150 investigations were opened in 79 countries to examine possible evasion and money laundering, according to the US-based</s>The law firm at the centre of the Panama papers leak is to close by the end of the month it announced today.

In a statement Mossack Fonseca said: “The reputational deterioration, the media campaign, the financial siege and the irregular actions of some Panamanian authorities have caused irreparable damage, whose obligatory consequence is the total cessation of operations to the public.”

Mossack Fonseca said it would “continue to call for justice” and said it would work with authorities to “demonstrate that no crime has been committed”.

Read more: Panama papers: Reaction to the revelations

The offshore firm shot to global prominence in 2016 after a cache of 11.5m documents from the firm was leaked to German newspaper Suddeutsche Zeitung (SZ).

The documents allegedly showed how Mossack Fonseca helped its clients launder money, dodge sanctions and evade tax.

Links to some of the world's most powerful figures were contained within the leaked data - including 72 current or former heads of state.

SZ worked with the International Consortium of Investigative Journalists (ICIJ) and a range of other newspapers including the Guardian in the UK, La Nacion in Argentina and Le Monde in France to investigate the documents and publish stories based on their contents.

Former UK prime minister David Cameron came under political pressure after his father was named in the leak.

A spokesperson for the then PM initially said that it was a private family matter, before issuing a statement which said: "There are no offshore funds or trusts which the prime minister, Mrs Cameron or their children will benefit from in future."

The leaks claimed the scalps of two prime ministers, Pakistan’s PM Nawaz Sharif and Iceland’s PM Sigmundur David Gunnlaugsson, after their offshore financial dealings were exposed to public scrutiny.

Read more: Paradise Papers reveal very little we didn’t already know

The offshore legal sector suffered another blow in 2017 when 13.4m documents from the law firm Appleby were leaked.

The revelations from the so called paradise papers were less explosive than those from the earlier Panama Papers, however the leak still exposed the financial affairs of prominent individuals such as Lord Ashcroft, a major donor to the Conservative party, Arsenal shareholder Alisher Usmanov, and former US secretary of state Rex Tillerson.</s>Mossack Fonseca, the offshore law firm behind the Panama Papers, is dead.

The Panamanian firm that gained international notoriety two years ago when its internal database was leaked, revealing decades of questionable business practices that facilitated money laundering, corruption, bribery and tax evasion, will close its remaining offices by the end of the month.

According to a statement obtained by the International Consortium of Investigative Journalists, the firm blamed the Panama Papers scandal for its demise.

“The reputational deterioration, the media campaign, the financial siege and the irregular actions of some Panamanian authorities have caused irreparable damage, whose obligatory consequence is the total cessation of operations to the public,” the statement said.

The firm also said it would “continue to call for justice” and would cooperate with authorities to “demonstrate that no crime has been committed.”
Panamanian law firm Mossack Fonseca announces that it is shutting down due to the economic and reputational damage inflicted by its role in the global tax evasion scandal.