Mossack Fonseca Set to Close Following Tax Scandal

By Valenciano via Wikimedia Commons

On Wednesday, the Panamanian law firm that is at the centre of the “Panama Papers” scandal, Mossack Fonseca, said that it was shutting down because of the reputational and economic damage that was inflicted by its role in the global tax evasion debacle.

The so-called Panama Papers consist of millions of documents that are stolen from Mossack Fonseca and were leaked to the media in April 2016. It provoked a global scandal after revealing how the rich and powerful utilised offshore corporations to avoid taxes.

In a statement, the firm said: “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 that a skeleton staff would remain in order to comply with the requests from authorities and other private and public groups.

Nonetheless, the law firm said that it would continue “fighting for justice. It also said that the firm would continue to cooperate with the authorities.

Last February, prosecutors in Panama raided the offices of Mossack Fonseca, looking for possible links to Odebrecht, the Brazilian engineering company. The Brazilian construction firm has admitted to bribing the officials in Panama and some other countries in order to obtain contracts in the region between the period of 2010 and 2014.

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

Varela has dismissed allegations that he took any money from Odebrecht.