The Malta Independent 18 November 2017, Saturday

Mossack Fonseca founders still under arrest as Panama Papers firm quits New Zealand

Neil Camilleri Saturday, 4 March 2017, 12:09 Last update: about 10 months ago

Company had, through Nexia BT, set up NZ trusts for Konrad Mizzi and Keith Schembri

Mossack Fonseca, the controversial law firm at the heart of the Panama Papers, has quit New Zealand, apparently as a result of dwindling business following the bombshell revelations.

The company was mostly obscure before a massive data leak that was published by the International Consortium of Investigative Journalists last year. The Malta Independent is a partner in the investigation. The hacked documents revealed how thousands of wealthy individuals and politicians hide their money in secret offshore companies.

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Konrad Mizzi and Keith Schembri


The revelations had a profound effect in Malta after it emerged that Minister Konrad Mizzi and the PM’s Chief of Staff, Keith Schembri, had opened companies in Panama and trusts in New Zealand. Doubts still surround a third company, called Egrant, which was also set up on instructions of Nexia BT, who acted as agents for Mossack Fonseca.

Nexia BT Managing Partner Brian Tonna has insisted that Egrant is just a shelf company but many find the declaration dubious.  The Prime Minister denies that Egrant was secretly set up in his name along with the companies of his left and right hand men; Konrad Mizzi and Keith Schembri. He acknowledged that his delay in issuing a denial (of over a year) was a mistake.

Brian Tonna 


Radio New Zealand reported this week that Mossack Fonseca has wound up its operations in the Pacific country after deregistering its local offshoot – Mossack Fonseca New Zealand – in August last year. Its former NZ agent, Bentley’s, has also said it is not aware of Mossack Fonseca currently being active in New Zealand.

Bentley’s is the accounting firm through which Konrad Mizzi and Keith Schembri’s financial advisors Nexia BT created their trusts – the Rotorua Trust and the Haas Trust. These were set up to incorporate their Panamanian companies – Tillgate and Hearnville. Bentley’s owns the Orion Trust, which administers Schembri and Mizzi’s trusts which, in turn, hold their Panamanian companies.

Both men insist that their companies and trusts never held any assets but the Panama Papers documents show that the Panamanian law firm spoke to banks in several countries in an attempt to open up accounts for them. All refused since Mizzi and Schembri are Politically Exposed Persons.

Audits commissioned by Mizzi and Schembri, whose publication, one year later, coincided with a visit in Malta by the European Parliament’s PANA committee, found that the trusts and companies had never traded and held no bank accounts.

But the committee chairman, Werner Langen, said after the meeting with Dr Mizzi that things were not clear but his Panama company “looked like money laundering." The PANA committee said it wanted to dig deeper into the matter.

PANA Committee chairman Werner Langen (right)


Journalist Neil Chenoweth told Net TV’s Iswed fuq l-Abjad this week that the NZ government launched inquiries into foreign trusts and eventually changed the laws after the email trail that led to Nexia BT’s Karl Cini setting up New Zealand trusts for Mr Schembri and Mr Mizzi was revealed.

 

Mossack and Fonseca still in custody

In the meantime the founders of Mossack Foncesa, Jürgen Mossack and Ramon Fonseca, have been held under arrest in Panama for over three weeks in connection with a scandal that has rocked Brazil.

The arrests, in Panama City, were linked to Brazil’s so-called ‘Operation Car Wash’ which exposed massive corruption in the South American Country. It found that huge sums were paid in bribes to politicians in return for contracts from state-owned oil company Petrobras.  The $2 billion kickback scheme has seen nearly 100 executives and politicians have been imprisoned.

Ramon Fonseca


As the authorities widen their investigation, they are also investigating any possible links between Mossack Fonseca and Odebrecht – a construction conglomerate that has admitted to paying millions in bribes to several Latin American governments in return for state contracts. The latter allegedly donated €45 million to the election campaign of former Brazilian President Dilma Roussef and VP Michael Temer. Roussef was impeached last year but Temer took her place.

Shortly after the arrest on 10 February, Panama’s attorney general, said she had information that identified Mossack Fonseca “allegedly as a criminal organisation that is dedicated to hiding money assets from suspicious origins”. 

Jurgen Mossack


Now a lawyer who formerly worked with Mossack Fonseca has revealed the secrets of the shady Panamanian firm. Maria Mercedes Riano said Mossack Fonseca shielded bribes paid to Brazilian politicians in exchange for contracts from Petrobras. She said the firm had a section, called Evolusof, which followed directions from Jürgen Mossack and Ramon Fonseca. “They were in control of the total operation, negotiating prices with customers and making decisions,” Riano said.

The lawyer also revealed how Mossack Fonseca sought to move funds through shell companies in jurisdictions such as Holland, New Zealand and Chile, since they were not on any blacklist by the Organisation for Economic Cooperation and Development (OECD).

Police Commissioner Lawrence Cutajar (right)


But in Malta, the Police Commissioner Lawrence Cutajar issued a statement to correct a story in IN-NAZZJON which suggested that in an interview by Frank Psaila on NET TV he indicated that both Minister Konrad Mizzi and Keith Schembri were placed under investigation and that they could be arraigned shortly.

Instead, he said that there is no basis on which the police could investigate and arraign the Minister and Chief of Staff found to have secret companies in Panama and New Zealand Trusts.

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