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Business Crimes Hotline
BERMUDA
'Paradise Papers' Leak May Be the Next Panama Papers for Global Companies and Wealthy Individuals
The latest in a series of leaks made public by the International Consortium of Investigative Journalists totals more than 13.4 million documents and approximately 1.4 terabytes of data. This leak, being dubbed the “Paradise Papers” in a reference to the previously leaked Panama Papers, is already shedding light on trillions of dollars that move through jurisdictions often considered to be offshore tax havens. News reports indicate that the records date back to 1950.
This new leak comes from the data of the Bermudan law firm Appleby, a 119-year-old firm that serves as an offshore legal services provider to a wide range of clients. With offices in offshore tax havens around the world, Appleby is known to assist clients in providing structures to legally reduce their tax burden. The firm is now being criticized for helping those clients obscure the ownership of assets and companies. In a statement to the media, Appleby indicated that it has investigated allegations raised by media reports of the leaks and has found no evidence of wrongdoing, either on the part of the firm or its clients.
The Paradise Papers leak nonetheless is already raising questions about the financial and business dealings of over 120 politicians and royal rulers around the world. These individuals include U.S. officials including President Donald Trump, Russian President Vladimir Putin, and the Queen of England. The leak also implicates other high–net-worth individuals, including Hollywood celebrities, and global companies such as Twitter and Facebook.
The disclosures will likely put additional pressure on world leaders — and on law enforcement — to take action against aggressive tax avoidance schemes. Already, Wilber Ross, the U.S. Secretary of Commerce, is facing scrutiny over the accuracy of his previously disclosed finances during his confirmation process, and his ties to entities and individuals close to Vladimir Putin, including Putin's son-in-law.
At this time, it is unclear what — if any — criminal exposure will be uncovered, or if the fallout from this leak will remain primarily political. Companies and individuals around the world continue to face investigation following the Panama Papers leak in 2016. At the time of the Panama Papers, the former head of the U.S. Securities and Exchange Commission (SEC) FCPA Unit announced that the SEC would review that data for evidence of violations of the FCPA and other securities laws. It is likely that the SEC and other law enforcement agencies will again review this newly leaked data from the Paradise Papers in the coming months to assess whether any of this information merits further investigation.
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In the Courts is written by Michael S. Stanek, an associate at Mayer Brown, Washington, DC.
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