Fact Check: Argentina

937 days, 15 hours, 30 minutes ago

SINCE RUFO EXPIRED

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Mossack Fonseca: A Key Player in the Báez Money Trail

The Panamanian law firm Mossack Fonseca has erected an intricate global network of shell companies that Argentine prosecutors say have been at the service of Lázaro Báez. This network relies on shell companies in Nevada, nominally controlled by shell companies in the Seychelles, set up at the request of lawyers around the world who ultimately work for the Panamanian headquarters. Argentine investigations have linked millions of dollars worth of tangible assets to this network, which spans four continents.

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Mossack Fonseca’s role in Argentine corruption and the Lázaro Báez network was discussed indirectly in a report filed by prosecutor José María Campagnoli in May 2013. What Campagnoli did not discuss, but what subsequent investigations have proven, is that Mossack Fonseca was responsible for setting these companies up and integrating them into an elaborate shell company network across at least four continents.

Campagnoli named roughly 120 Nevada firms as belonging to the Báez network, identified multiple South American acquisitions, and seized their assets in Argentina. These assets included ownership stakes in investment funds, properties in luxury high-rise condo buildings, and shopping centers, among others. All of these Nevada shell companies were set up by a single registered agent: MF Corporate Services, an apparent subsidiary of Mossack Fonseca specializing in the creation of Nevada shell companies.

All of the Nevada shell companies tied to Báez in the Campagnoli investigation either are or were controlled by a single shell company in Seychelles: Aldyne Ltd, which appeared on the Nevada Secretary of State filings for these companies as the manager. (Following the Báez scandal’s eruption in April 2013, many of the firms subsequently shut down or changed their board’s composition.) In virtually all of the cases, Aldyne was the sole board member. Aldyne lists as its address Mossack Fonseca’s offices in Seychelles. The vast majority of these companies were capitalized via a $10,000 payment by another Seychelles shell company operating out of Mossack Fonseca’s offices: Gairns Ltd.

Many of the Nevada companies were founded at the request of Mossack Fonseca employees working in one of the firm’s dozens of foreign offices. These foreign Mossack Fonseca employees would presumably be in closer contact with the ultimate client, and therefore with the Báez network. One such example is in Uruguay, where the lawyer Juan Pedro Damiani worked with Mossack Fonseca’s Montevideo branch and with MF Corporate Services to found a handful of Nevada firms linked to the Báez network.

Similarly, many of the Nevada shells were founded at the request of the Mossack Fonseca office in Lugano, Switzerland, a popular money-laundering center in the Italian-speaking region of the country. Many of these shells were created with sister companies also based Lugano. The Lugano branch of these shell companies always listed as its address the local office of Mossack Fonseca. Lugano has already popped up in the Báez scandal as the home of Helvetic Services Group, the Báez front company that he used to move $65 million in sovereign bonds in 2012 and 2013. According to Google Maps, only 700 meters separate the local offices of Mossack Fonseca and Helvetic.

Mossack Fonseca was founded in 1977 by Jurgen Mossack, a German expat, and Ramón Fonseca, an author and a prominent Panamanian politician. The firm operates around the world, with a special emphasis on financial paradises like the British Virgin Islands, the Isle of Man, and Anguilla. It also has offices and subsidiaries in the US, in Wyoming, Miami, and Las Vegas.

While its website lists a number of core areas, the firm is perhaps best known for setting up shell companies that hide the beneficial ownership of the shell’s assets. It has founded many thousands of shell companies in Panama alone, and has presumably done the same in other jurisdictions where it operates.

The firm’s skill in setting up shells is particularly useful for anyone seeking to hide the location of assets obtained through illicit activities. Not surprisingly, it has reportedly been a popular choice for corrupt politicians and their cronies moving assets. The firm’s shell companies have popped up in multiple Latin American corruption cases, as well as in investigations allegedly belonging to Bashar al-Assad and Muammar Gaddafi.