Monday, May 09, 2016

How Panama Papers' sponsor George Soros made billions offshore

 
The Independent provided this 1994 glimpse into how George Soros made billions with an offshore Netherlands Antilles fund using tax breaks which are now villified under the Panama Papers by the International Consortium of Journalists he sponsors.  The Quantum fund was formed by Citco (Curacao Investment Trust Co) instead of a Panama law firm.


Lifting the lid of the Soros money machine: 
In an exclusive journey through the labyrinthine empire of the master speculator, Stephanie Cooke and Charles Raw find gains are 'reallocated' to a charmed circle of associates

STEPHANIE COOKE and CHARLES RAW Saturday 5 March 1994


'I STILL consider myself selfish and greedy,' says George Soros. 'I am not putting myself forward as any kind of saint. I have very healthy appetites and I put myself first.'
Mr Soros is the man who made dollars 1bn when Britain left the European exchange rate mechanism in September 1992, earning him the status of a legendary investor. But that status was tarnished last month, when he lost a similar sum on the yen.

Nevertheless, he has set the tone for a new generation of large-scale professional investors who run so-called hedge funds on behalf of wealthy private clients. Markets regularly hang on his predictions for the course of gold, currencies and shares.

The size of these hedge funds means they are regularly singled out as the cause of seismic shifts in financial markets. That is putting Mr Soros into sharper focus, simply because he is the leader of the pack. If he should falter, the knock-on effect could be widespread.

That is why central banks have started to ask questions about unregulated offshore operations such as his.

Ever the master of public relations, Mr Soros welcomed the central banks' probe. 'I feel there is an innate instability in unregulated markets,' he told the Reuters news agency.

Until now, however, remarkably little has been known about how the Soros financial empire is organised.

The first detailed analysis of the funds' published documents reveals that he has created a complex and bizarre financial creature in which the interests of Mr Soros, his family, close friends and key executives in the business are incestuously intertwined with those of his public investors.

Some of those investors may not have noticed that in the past few years Mr Soros has altered the structure of the organisation so as to reallocate some of the profits in favour of his private circle.

Mr Soros started his offshore fund operation with dollars 4m in 1969, at the age of 39, after learning the arbitrage and investment business in London and New York.

He appears from the start to have aimed at wealthy individuals and professional European investors. He told prospective clients that the purpose of his key Quantum fund was 'to enable sophisticated investors to participate in an internationally diversified investment portfolio'. The Quantum fund is active in currency, commodity and interest- rate markets as well as equities and fixed-interest securities.

Later, in the early 1980s, Soros honed to perfection the technique of charging buyers a premium based on the supply and demand of fund shares.

Normally an open-ended investment fund is sold or redeemed at net asset value, with a sales charge added or an administrative charge deducted. But the Quantum fund can issue shares at a premium to its net asset value. The premium, however, is not based on an open market value.

Instead it is set by the fund's managing director, Citco (Curacao Investment Trust Co) in Curacao in the Netherlands Antilles. This is declared to be 'by or at the direction of the fund's board of supervisory directors', which is chaired by Alberto Foglia of the Banca del Ceresio in Lugano, Switzerland. Its seven other members are mainly European bankers and brokers, including in London the renowned fund manager Nils Taube of Lord Rothschild's St James's Place Capital.

In the late 1980s the Quantum fund's documents stated that the premium would not rise above 25 per cent. As the premium for buying the fund was as low as 1 per cent during that period, it was not an unduly onerous restriction. But in the past few years, as the fund's fortunes have risen, the restriction has been quietly dropped and the premium soared at one point to nearly 40 per cent. After the Japanese loss last month, it dropped four points to 35 per cent, but is now back to 36 per cent.

Possibly to avoid problems with the US authorities, Soros states that his funds are barred to Americans - whether in the US or abroad. At least one exception to this is Soros himself, who became a US citizen in 1961.

By 1972 the fund was worth dollars 20m. For reasons not made clear in recent documents, the operation was relaunched under the Quantum name in 1973. The fund was registered in the Netherlands Antilles, but Soros ran it from New York through Soros Fund Management. No information is given about this firm's precise corporate status, other than that it has always been wholly owned by him personally.

Although Soros now leaves the running of SFM to his executives, the documents state that in his 'personal capacity, he manages a securities trading partnership formed for the benefit of members of the Soros family and several other family accounts'.

By the end of 1980 the fund was worth more than dollars 380m and the net asset value of each share had risen by almost 4,400 per cent. In 1981 Quantum shares fell by 23 per cent, their first drop in value, and the fund nearly halved to dollars 193m. The following year a new category of share was created - the B share - in which Soros placed money invested by himself and his trusts and charities. His own main investment in the fund is now via these shares. It is through them that he apparently exercises control over the fund, although the voting rights of these shares are not explained in more recent documents. He can and does convert B into A shares from time to time, but these are primarily held by outsiders. No single external investor is allowed to exercise more than 4.9 per cent of the votes.

Although the fund recovered and grew once more, it hit another rocky patch in the late 1980s when more investors were selling Quantum shares than were buying. Around this time Soros made serious efforts to expand his operation.

In 1989, in spite of the fact that very few investors came into the fund, the net asset value of Quantum increased by 31.6 per cent.

Mr Soros had demonstrated the magical effect of simple mathematics, something not immediately apparent to laymen. Because of the high number of redemptions during 1989, the benefits were divided among fewer shares, so the net asset value still rose.

By then the operation was working as follows. Under an agreement approved by shareholders in 1988, Soros Fund Management is paid a basic investment advisory fee of 1 per cent a year, payable monthly. But the real cash cow is the annual performance fee. The fee is mainly composed of a sum equal to 15 per cent of any increase in net assets resulting from the fund's operation - before the deduction of the performance fee itself, of course.

There is another element in the fee - 15 per cent 'in net assets resulting from premiums realised on fund share subscriptions and premiums or discounts realised on fund share redemptions'.

Although the fund can issue shares at a premium direct to investors and - as is normal with open-ended funds - redeem them, in practice Quantum acts differently.

It has a subsidiary called Quasco which sells Quantum shares at a premium and buys them back either at a smaller premium or, should the situation arise, a discount of up to 1 per cent. Quasco makes a profit from the margin between the premiums charged to buyers and the price offered to sellers. In recent years the margin has been around 4-5 per cent.

Quasco's accounts are not available, but it is clear it makes a substantial amount of money through these dealings. This money has historically been reinvested in the fund and SFM has taken its 15 per cent cut.

Indeed, the very fact that the money was ploughed back has been used as a strong promotional point by brokers selling the funds.

But in 1991 things started to change. In a significant restructuring of the operation that included the launch of new funds, Mr Soros began the 'reallocation' of some of the gain for 'selected persons associated with SFM'.

By then Mr Soros had apparently finally decided that Quantum's growth had to be curtailed. In February of that year he announced the biggest distribution so far: dollars 4,000 per share, a total of dollars 611m. To satisfy investors who did not want cash, he offered shares in a new fund, Quasar International.

Quasar was a different animal to Quantum. Instead of investing directly in securities, it would invest only in one entity - Quasar International Partners. That in turn would carry out investment activities under advice from SFM. But Quasar, like Quantum, had a dealing subsidiary, Quinter.

The fund was not the only investor in the partnership, however. Mr Soros, 'certain members of his family and other selected persons associated with the partnership's management' also joined the club.

The Quasar fund has had a very successful run. In only its second year of operation it showed an increase in net asset value per share of 56.2 per cent, following a 44.9 per cent rise the previous year.

The accounts for the year ending 31 January 1993 show that of the dollars 18.2m netted on premiums, dollars 5.6m was 'reallocated to other partners'. In the previous year they were allotted dollars 2.55m in premiums. These reallocations were based on their share of the partnership, which had risen from 24.6 per cent at the outset to 29 per cent by the end of the second year, partly because of the reallocations.

Thus Mr Soros, his family and key members of his management team had effectively increased the membership dues for Quantum's sophisticated investors in the fund, and helped to dilute the fund's interest in the partnership.

In the explanatory memorandum about Quasar, Mr Soros explained that 'the Fund's net profit or loss from transactions in the Fund shares (whether realized directly or through Quinter) generally is accounted for as if earned by the Partnership, and thus is shared among the Fund and the other partners.'

Close examination of the accounts also reveals that the 'selected persons' appear to have benefited in another way from the establishment of the partnership.

In April 1991 Soros told Quantum shareholders that they had subscribed for a total of dollars 541m in 'Quasar', without specifying whether he meant the fund or the partnership.

In fact the accounts reveal that while dollars 541m of Quantum's assets were indeed transferred to the Quasar partnership, the Quasar fund's initial net asset value was only dollars 493m - a difference of dollars 48m.

The Quantum investors choosing to invest in Quasar were thus effectively paying a premium of about 9.5 per cent for their new shares.

Another discrepancy appeared in the calculation of the net asset value at the end of the second year. While the fund's holding of the partnership at that time was 71 per cent, when it came to dividing up the net increase in the partnership's capital resulting from operations, the fund got only 67.1 per cent. This is possibly because the 'selected persons' do not pay advisory fees.

The pattern for spinning off new funds had been set.

When Quantum's next distribution of dollars 1.166m was made in February 1992, two further funds were launched: Quota and Quantum Emerging Growth.

Quota was different because it would be managed entirely by outside advisers (but, of course, under SFM's overall direction).

Quantum Emerging Growth remained inside the SFM stable - but its performance fee was set at 20 per cent and also spawned a partnership arrangement similar to the Quasar operation. In effect, therefore, it too raised the stakes for the growing ranks of investors in what was by this stage fast becoming the Soros phenomenon.

This time, though, there was no discrepancy between the assets of Quantum transferred to the partnership and the new fund's equity stake, according to the accounts issued for the first 15 months to 31 March 1993.

During that period the 'selected persons' put some dollars 100m into the partnership. Their share rose from less than 5 per cent at the outset to 15 per cent at the end of the period. Their allocation of the dollars 40m in profits, generated by the premiums from dealings in the fund's shares, was dollars 4.7m.

As the fund's fortunes rocketed, self-restraint among its management seemed to wane. The 25 per cent restriction on the premium had long since disappeared.

Then it spawned two property funds, each with a high- profile partner.

One, Quantum Realty Trust, was with Paul Reichmann, whose Olympia & York operation had collapsed as a result of the financial drain of the Canary Wharf development in London's Docklands.

The other, Quantum UK Realty Fund, was with John Ritblat of British Land. Again, capital was provided partly out of distributions from Quantum and Quasar as well as by Mr Soros and his family, but also this time by other participants.

Although the structure of these new funds is highly complex, they are essentially closed- end operations. What may not have been noticed was that in June 1993 the directors of the open-ended flagship - the Quantum fund - removed an important investment restriction: a prohibition on direct investment in property.

Until the audited accounts for 1993 are available (they are expected to be out in May or June), investors will not know whether advantage has been taken of this change, or what effect it may have had on the liquidity of the fund.

Last year, Quantum quietly transformed itself. On 1 August 'substantially all' of Quantum's assets and liabilities were transferred to a new Curacao partnership, Quantum Partners.

As with Quasar and Quantum Emerging Growth, the Quantum fund is not the only partner. 'Selected persons associated with SFM' - including SFM's managing directors - subscribed for 1.3 per cent of the new partnership's net equity.

In effect they were getting a share in Quantum without having to pay a premium. Already by the end of September their share of the net equity had risen to 1.9 per cent - dollars 78m - and, as with Quasar and Quantum Emerging, they would get a share of the net premiums made from dealings in the flagship fund.

Again, just how much this will be will not be known until the 1993 accounts are available. But in 1992 such dealings contributed dollars 68m towards the rise in the fund's net asset value.

Additionally, SFM's managing directors and 'trusts and charitable foundations created by them' have taken an insurance policy on the future of the fund. This comes in the form of dollars 220m of convertible debentures that pay 6 per cent a year and are convertible in 2003 into partnership shares at 120 per cent of their net asset value on the issue date. They may be worth considerably more than that by then.

In the great tidal wave of money into the Soros empire, which at the end of 1993 stood at dollars 4.9bn for Quantum alone and more than dollars 10bn for the whole group, there is another sum that may one day cause repercussions of its own: the size of the performance fee that SFM leaves in the fund. At the end of 1992, the latest reckoning available, that totalled nearly dollars 550m.

These deferred fees are so structured that they share in the appreciation of the fund, but investors are given no clear picture of when SFM can or will withdraw them.

It is curious that Mr Soros has not yet taken this money out, since it would be one way of reducing the size of the funds. But to take it out quickly now might suggest he was losing confidence in his own creation.



See full text in http://www.independent.co.uk/news/business/lifting-the-lid-of-the-soros-money-machine-in-an-exclusive-journey-through-the-labyrinthine-empire-1427341.html



Thursday, May 05, 2016

Free Zone merchant and Balboa Bank in OFAC sanction list

In the next hours expect more news about one of the newcomer banks in the Panama financial system and the developer of the Soho shopping mall.


Action Exposes Extensive Drug Money Laundering Network Based in Panama
WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)
designated the Waked Money Laundering Organization (Waked MLO) and its leaders, Nidal Ahmed Waked Hatum (Waked Hatum) and Abdul Mohamed Waked Fares (Waked Fares), as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act).  OFAC also targeted six Waked MLO associates and 68 companies tied to the drug money laundering network, including Grupo Wisa, S.A., Vida Panama (Zona Libre) S.A., and Balboa Bank & Trust.  Panamanian-Colombian-Spanish national Waked Hatum and Panamanian-Lebanese-Colombian national Waked Fares co-lead the Waked MLO, which uses trade-based money laundering schemes, such as false commercial invoicing; bulk cash smuggling; and other money laundering methods, to launder drug proceeds on behalf of multiple international drug traffickers and their organizations.  As a result of today’s action, all assets of these individuals and entities that are under the jurisdiction of the United States or in the control of U.S. persons are frozen, and U.S. persons are generally prohibited from engaging in transactions with them.
“This action exposes the Waked Money Laundering Organization and disrupts its ability to launder drug trafficking proceeds using trade-based methods, duty-free retail, real estate development, and financial services throughout the region,” said John E. Smith, Acting OFAC Director.  “We look forward to working jointly with the Panamanian authorities to protect the Panamanian and U.S. financial systems from abuse by narcotics traffickers and other illicit actors.”
In addition to the Waked MLO and its two leaders, the OFAC action designated six Panama-based MLO associates for providing material support and/or acting on behalf of the MLO:  Gazy Waked Hatum, Ali Waked Hatum, and Jalal Waked Hatum, brothers of Waked Hatum who manage Waked Hatum’s import/export, retail, and real estate businesses; Mohamed Abdo Waked Darwich, Waked Fares’ son, who manages Waked Fares’ duty-free retail and real estate development operations; and two attorneys, Norman Douglas Castro Montoto and Lucia Touzard Romo, who provide a variety of services, including incorporating shell companies, to the Waked MLO and serve various roles in several Waked-related companies. 
Today’s designations also target the principal Panama-based companies used by the Waked MLO to launder drug and other illicit proceeds:  Vida Panama (Zona Libre) S.A., an import/export company in Panama’s Colon Free Trade Zone; Grupo Wisa S.A., a holding company for businesses involved in real estate, construction, retail, hospitality, and media, including the La Riviera chain of duty-free stores operating throughout Latin America; Soho Panama S.A. and related entities, including a luxury mall and real estate development in downtown Panama City; Balboa Bank & Trust, a Panamanian bank; and the Strategic Investors Group Inc., a holding company that owns and controls Balboa Bank & Trust as well as two other financial services companies.  Balboa Bank & Trust was used to launder narcotics and other illicit proceeds for multiple international criminal organizations.  

See full text in https://www.treasury.gov/press-center/press-releases/Pages/jl0450.aspx
See also Balboa Bank & Trust www.balboabanktrust.com
Strategic Investors Group Inc. http://www.sigroup-inc.com
Strategic Investors Group Inc. stock http://www.panabolsa.com/es/emisor/sigr/
Grupo Wisa www.grupowisa.com




Due to the negative effects of an OFAC listing, Balboa Bank & Trust was intervened by the Panama regulator  as of 2:30 pm of May 5 for 30 days until June 5, subject to a 30-day extension.   The text in Spanish of the regulator notice is in
https://www.superbancos.gob.pa/superbancos/documentos/leyes_y_regulaciones/comunicados/2016/aviso7-2016.pdf 


May 9 is an important date if you are a Mossfon client

The International Consortium of Investigative Journalists (ICIJ) funded by George Soros will release on May 9 what they claim are the actual emails of the people behind offshore companies formed by Mossack Fonseca.  More than 50% are not related to Panama companies, but IBCs from BVI and Bahamas, yet they are called the Panama Papers because they were formed by a law firm in Panama founded by a lawyer born in Fürth, Germany.   None of the funds from the companies reported so far were kept in Panama banks - instead they were kept at banks in Switzerland, Channel Islands and Hong Kong who requested those companies for clients on whom presumably they conducted KYC due diligence searches.  

None of that will matter because on May 9 the data base of all correspondence will be released, after being censored by ICIJ to make sure that no friends of its sponsors are disclosed (what they call "a careful release of basic corporate information").  Since ICIJ has threatened to release correspondence dating back to the formation of the firm in 1978, current and former clients should consult with legal counsel in their country about the consequences of this release.




The International Consortium of Investigative Journalists will release on May 9 a searchable database with information on more than 200,000 offshore entities that are part of the Panama Papers investigation.
The database will likely be the largest ever release of secret offshore companies and the people behind them.
The data comes from the Panamanian law firm Mossack Fonseca, one of the top players in the offshore world, and includes information about companies, trusts, foundations and funds incorporated in 21 tax havens, from Hong Kong to Nevada in the United States. It links to people in more than 200 countries and territories.
When the data is released, users will be able to search through the data and visualize the networks around thousands of offshore entities, including, when available, Mossack Fonseca’s internal records of the company’s true owners. The interactive database will also include information about more than 100,000 additional companies that were part of the 2013 ICIJ Offshore Leaks investigation.
While the database opens up a world that has never been revealed on such a massive scale, the application will not be a “data dump” of the original documents – it will be a careful release of basic corporate information.

See full text in www.icij.org.

Friday, April 15, 2016

Soros And CIA Behind #PanamaPapers?


The journalist consortium responsible for the "Panama Papers" story is funded by the Ford Foundation and George Soros' Open Society Foundation. On April 5 show, researcher Leo Zagami breaks down how the "Panama Papers" could influence global politics.



Wednesday, April 13, 2016

Still waiting for #DelawarePapers and #Nevadapapers


For just $309, you too can hide your assets — in the U.S.


The website for Corporation Makers promises that owning a business can remain “your deep dark secret.”

“Do you wish to own land or other assets without anyone becoming aware of it?” it advertises.

Not a problem. All for as little as $309.

The pitch doesn’t rely on the loose rules of well-known offshore havens such as the Cayman Islands. It’s about Nevada.

Nevada is among a handful of U.S. states with liberal incorporation laws that offer many of the same benefits that have drawn business tycoons, politicians and money launderers from around the world to hide their wealth in exotic locales — a secret economy revealed this week in a series of reports based on leaked documents from a Panamanian law firm.

The so-called Panama Papers show how the firm Mossack Fonseca set up shell companies for the rich to shield their millions from the prying eyes of tax authorities and the public.

The firm’s most common destination was the British Virgin Islands, where it worked with more than 100,000 entities. But its seventh-most popular place to set up corporations — after island nations such as Seychelles — was Nevada, with more than 1,000 companies.

In pursuit of fees and other revenue, several U.S. states have competed with each other in recent decades to attract people from around the world starting businesses. The states promise minimal taxation and maximum legal protection and privacy, much like offshore tax havens.

“The mechanisms are pretty much the same here,” said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, a nonprofit in Washington. “There’s nothing special happening in Panama. Panama is pretty much a microcosm of what the U.S. is a willing partner in.”

Financial watchdog groups have dubbed the competition among states a “race to the bottom” that places the U.S. among the worst places in the world for corporate transparency.

“From the states' perspective, the end game is to raise revenue for the state by creaming off fees from large numbers of companies incorporating there — and the consequences be damned,” one such group, the Tax Justice Network, based in the United Kingdom, wrote in a 2015 report.

When John Cassara, a former special agent with the U.S. Department of the Treasury who investigated money laundering and fraud, was training foreign investigators, they would often ask about “this thing called Delaware.”

“You’ve heard the expression ‘follow the money’?” Cassara said. “Well, when the money trail leads to a Delaware corporation, it is almost a dead end for law enforcement.”

More than a century ago, Delaware sought to attract businesses by allowing companies to write governance rules that shielded management from liability and eliminated standard protections for shareholders.

Today, the state is the legal home to 1.1 million companies, 95% of which have their principal location in another state or country. Tens of thousands of businesses list the same Delaware addresses, home to their incorporating agents.

The businesses registered in Delaware include 65% of Fortune 500 companies.

But many more are limited liability corporations essentially unknown to all but the owners and their agents and lawyers, drawing enough criticism that the state maintains a “facts and myths” Web page.

“Delaware has a comprehensive statutory and regulatory regime to protect the public from improper behavior by business entities, just like other states,” it says.

State officials say that over the last decade or so they have cracked down on a variety of questionable practices, including the use of shelf corporations, or old shell companies that are sold to start-ups trying to pass themselves off as businesses established long ago.

Not in dispute are the benefits to Delaware: corporate franchise taxes — the fees for maintaining a business — provide the state nearly $1 billion a year, or a quarter of its annual revenue.

That success has drawn the attention of other states looking for sources of revenue.

In the 1980s, Nevada began revamping its corporate laws to minimize liability for management.

Among its biggest draws is secrecy.

The state allows “nominees” to file company documents while the identities of the true owners remain hidden.

That is a key selling point for many incorporation companies that specialize in establishing businesses in Nevada.

A common practice is for a nominee to be “appointed in the morning,” file state paperwork by lunch, and then resign by dinner, according to the incorporation site www.Nevada123.com.

“The less the public knows about your affairs, the less engaged they can become,” the site says.

Nevada and other states say their rules are not meant to encourage illegal activity.

But secretive entities have long been used to move and hide money. Hard-to-trace shell companies have served as fronts for controversial foreign buyers of top-end real estate in cities including New York and Miami.

Federal rules have also allowed U.S. political donors to hide campaign contributions by donating to super PACs through limited liability corporations.

One prominent Republican donor, the gambling industry magnate Sheldon Adelson, tried to hide behind secrecy protections when he purchased the Las Vegas Review-Journal last year.

The company’s journalists were informed one day that their new owner was a company called the “News + Media Capital Group,” which had been recently incorporated in Delaware with “undisclosed financial backers with expertise in the media industry.”


Corporate documents listed Michael Schroeder, a Connecticut newspaper publisher, as the company’s manager but did not name the owner, whose identity was only revealed after the newsroom revolted and its reporters launched their own investigation.

Adelson had originally denied buying the paper.

Gardner, of the financial watchdog nonprofit, explained the cost of such secrecy: “There is a basic matter of democratic distrust when you don’t know who’s running things.”

Secrecy has been allowed to flourish in the U.S. even as the government tries to improve corporate transparency abroad in an effort to cut off funding for terrorism, drug trafficking and other illicit activity.

But pressure is building on federal and state officials to address corporate secrecy. This week, U.S. Treasury officials said they could soon issue a rule change that has been in the works to require banks and other financial institutions to obtain information about the owners of companies.

News reports about the Panama Papers this week have already put some state officials on the defensive, with some critics calling for federal requirements that states disclose businesses’ true owners.

Wyoming launched an audit Monday of 24 companies in the state linked to Mossack Fonseca and discovered they had failed to provide “required statutory information for performing the duties of a registered agent under Wyoming law.”

Wyoming Secretary of State Ed Murray promised to fight fraud and possibly seek changes in state law. At the same time, he defended the way Wyoming did business.

“I oppose a one-size-fits-all federal law mandating the dissolving of privacy protections,” he said in a statement. “We are not naive as to the importance of the release of these 'Panama Papers,' but we will not compromise the privacy of our customers.”

See full text and comments in http://www.latimes.com/world/la-fg-panama-papers-americans-20160407-story.html


Tuesday, April 12, 2016

#Panamapapers informant revealed by Financial Crime Blog


Saturday, April 9, 2016

PANAMA PAPERS INFORMANT FIRST SOUGHT TO SELL THE INFORMATION IN PANAMA

The story of the informant (or informants) responsible for releasing the "Panama Papers" document to the global press is far more complex than the media is making it out to be. Mossack and Fonseca's description of the theft of the information, as a cyber-hack, is simply not true, as you know. Let's clear the air on the individuals known to be involved, especially since readers are now writing in, and asking me to identify the players.


First of all, the original informant, as previously detailed in this blog, was a receptionist at the Mossack law firm; she served as Ramón Fonseca's longtime mistress, and, of course, had access to the firm's email accounts. After the affair ended badly, she left the firm, taking with her a large number of emails and documents.

Thereafter, she attempted to vend her documents around Panama City, and did sell off small segments; this was back in 2008 and 2009, a fact that seems to have escaped most of the published stories purporting to report on the facts, which made it appear that this all occurred only one year ago. Some of her documents did find their way into the hands of US law enforcement agencies, leading to speculation that the information may have been responsible for subsequent indictments of narcotics traffickers, the demise of HSBC, and the departure of Citibank from Panama.

 Her name is Jahaira M., for those who are still curious,  though I have omitted her last name to spare her hundreds of hungry journalists appearing at her door tonight. The most recent action, regarding the documents, that I am aware of is a contact she had in Germany, which may explain the appearance of the documents first at Sueddeutsche Zeitung. She is believed to still reside in the Republic of Panama; That is why I chose a photo of her that preserves her privacy.

Second, the sources may consist of more than one cooperating individual; we have previously covered the matter of the married Panamanian couple, he a wealth management officer at Mossack and Fonseca, she a former compliance officer there. It is not know whether he is still working there, so it is best that both of these individuals remain anonymous for now. I have deleted part of their last name; Mr. & Mrs. San***z.

They were active in what I can only describe as Panama's extreme nightlife scene, where my investigators first had contact with them; this was after Jahaira was hawking her emails and documents. The couple were also selling confidential MF documents, and again some found their way into the hands of US law enforcement, which probably contributed to subsequent arrests.

Therefore, we cannot say for certain that any one individual is the sole confidential informant that leaked the documents we now refer to as the "Panama Papers."


Full text in pictures in http://rijock.blogspot.ru/2016/04/panama-papers-informant-first-sought-to.html
See also Google+


John McAfee Exposes The Panama Papers Hoax


 Libertarian Presidential candidate John McAfee joins the show to break down the real details surrounding the Panama Papers

Monday, April 11, 2016

Will Hillary Clinton be featured in #Panamapapers?


Hillary Clinton’s Caymans-tax-dodge hypocrisy





Hillary Clinton last week lunged into her most flagrant fit of hypocrisy yet.
With Bernie Sanders surging, she took new aim at the rich — including their use of tax dodges.
She told MSNBC: “We can go after some of these schemes … the kind of misclassifying of income, trying to make it look like it’s a capital gain, when it’s really ordinary income, going ahead and routing income through the Bahamas or the Cayman Islands or wherever.”
Huh. Bloomberg News reported in 2014 on the Clintons’ use of a prime tax dodge: They put their Chappaqua home into a “residence trust” in 2010. Such trusts can save hundreds of thousands of dollars in estate taxes.
Meanwhile, the Clintons’ family wealth has grown big-time thanks to firms with significant holdings in places like . . . the Caymans.
As The Daily Caller notes, Bill Clinton spent years as a partner in his (now-ex-) buddy Ron Burkle’s investment fund Yucaipa Global — registered in the Cayman Islands. In five years, Bill pocketed at least $10 million.
In 2011, her hubby also earned at least $225,000 in speaking fees from Whisky Productions for an “event that will target the business community in Grand Cayman.”
It’s a family thing: Chelsea Clinton’s hubby, Marc Mezvinsky, is a partner in a hedge fund with multiple holdings incorporated in the Cayman Islands.
And don’t get us started on the whole clan’s use of the Clinton Foundation.
Full text and videos in http://nypost.com/2016/01/18/hillary-clintons-caymans-tax-dodge-hypocrisy/
See also http://mypanamalawyer.blogspot.com/2009/04/clinton-invested-in-cayman-tax-haven.html



Monday, November 02, 2015

OECD Tax man ready to change blacklisting rules on Panama


FINANCIAL AFFAIRS

OECD says Panama pledge a positive step

The country faces a review on its financial services sector by the Global Forum.


Following the announcement of President Juan Carlos Varela on the commitment of Panama to exchange financial information, the director of the Center for Fiscal Policy and Administration of the Organization for Economic Cooperation and Development (OECD) Pascal Saint-Amans acknowledged that the pledge is a step forward for Panama but said the country still has a long way to go.
Saint-Amans spoke with La Prensa during the annual meetings of the International Monetary Fund and World Bank, which concluded yesterday in Lima, Peru. The following are questions and answers from the interview.
What do you think of Varela's pledge?
It is a good step forward. In October of last year, 94 countries committed themselves to the automatic exchange of information. They pledged to implement the standard. Panama was one of the few jurisdictions that did not make the pledge, along with Bahrain, the Marshall Islands, Vanuatu and Nauru, with Panama being the only significant financial center.
Panama said it would exchange information, but that it would not accede to a multilateral convention. what is your opinion of that?
From a legal point of view, once a commitment is made, it has to be implemented. To share information, it can be done through a multilateral convention, or it can be done bilaterally. In that case, one should move fast if you want to grant the exchange of information to all interested countries that meet the standard of confidentiality.
Do you think that Panama will pass to the second phase of the review of its jurisdiction?
The peer review, which includes 30 countries, has made that recommendation to the Global Forum, which has until the end of October to decide. I think it was premature of Panama to announce that, as it broke the rules of confidentiality. It is more than likely, but who knows. There are members of the Global Forum who are not in the peer review group. We have to wait for the Global Forum, which is the sole decision-making body in this matter. In substance, it is true that the members of the review group have recognized some progress that was made in Panama.

Varela said that debate on the exchange of information should be conducted in the UN. Do you agree?
It is an opinion I respect completely. But in this case, there are 127 jurisdictions, including Panama, that are members of the Global Forum. What matters is that all countries are equal. No longer is the OECD a group of countries dictating what rules other countries have to make.
In Panama there is a concern because the steps demanded by the OECD could hurt the competitiveness of the financial services industry. Do you agree?
It is not true. Because all countries have moved. What happens is actually the opposite. Panama won a competitive advantage by not conforming. That is why other countries think that the situation is very unfair because Panama is receiving money that they have lost. The perception in Panama is really different from the perception outside.
Do you think that those flows of money look to hide the funds from tax authorities?
The reviewer group will decide that. But that's basically what we heard from the banking industry.
In the country there is a sense that a double standard is used. That the United States is not required to provide information with the same level of transparency that it demands from Panama. Is that a fair statement?
The rules are the same the United States is expected to act with reciprocity with any other country. Look at the review of the United States. It has a mark in regards to beneficiaries and they have to change. Currently they are providing required information, but not enough


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See also 
More Pascal Saint-Amans statements in Panama: Profits for two men and a dog http://mypanamalawyer.blogspot.com/2015/07/panama-profits-for-two-men-and-dog.html
The Economic Case for Tax Havens http://mypanamalawyer.blogspot.com/2014/10/the-economic-case-for-tax-havens.html