Police authorities and prosecutors raided the headquarters of the Panama law firm that is currently embroiled in the biggest financial data leak in history, reported Associated Press (AP).
At least six police officers cordoned the office of Mossack Fonseca in Panama City on April 12, a day after representatives from the Intellectual Property Office dropped by to follow up on the firm's complaint of security breach.
More than 11 million documents or 2.6 terabytes of data were provided to a Dutch publication by an anonymous source. Over the course of a year, multiple journalists joined together to investigate the contents and were able to trace the documents to Mossack Fonseca, the fourth biggest company that offers offshore services.
The attorney general explained that the purpose of the raid is "to obtain documentation linked to the information published in news articles that establish the use of the firm in illicit activities," reported AP.
However, the law firm has already denied committing any wrongdoing and accused [PDF] the media of providing "an inaccurate view of the services that we provide and, despite our efforts to correct the record, misrepresented the nature of our work and its role in global financial markets."
Nevertheless, it promises to cooperate and feels quite relieved that the "real criminals" are not under investigation.
Aside from its Panama headquarters, the home of one of the firm's representaives in Peru has also been raided and documents seized while the investigators are planning to expand their search to the company's subsidiaries and a computer support center to trace the leak's origin.
Wide-Ranging Impact
The impact of the scandal is widespread.
First, it sheds more light on how individuals and companies avoid paying exorbitant taxes and increase their wealth through creating anonymous and shell companies, particularly in different tax havens or places that offer favorable tax conditions such as lower income tax rates and lenient regulations on taxation. Although creating shell companies is legitimate, it has been abused and used to funnel "dirty money."
However, while the law firm helps create and sell these offshore companies, it's been described as doing only the grunt work, and the biggest players are the banks, which have the means and manpower to fully control financial assets of their clients, including how they're moved across different accounts overseas.
The paper's leak has also crossed over politics. Iceland prime minister Sigmundur Davíð Gunnlaugsson has already resigned after he and his wife were showed to have a company in British Virgin Islands.
