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Shredded With Rahman Ravelli already having published a special advisory guide in the wake of the Mossack Fonseca Panama Papers scandal, we look briefly here at the most recent developments and their implications.

24 June 2016

The initial controversy surrounding Mossack Fonseca emerged well over a month ago. But it shows no signs of abating.

The initial controversy surrounding Mossack Fonseca emerged well over a month ago. But it shows no signs of abating.

The International Consortium of Investigative Journalists (ICIJ), the non-profit news organisation that broke the Panama Papers scandal, has now put the formerly confidential documents online. This online database contains information on almost 320,000 offshore companies that have used the services of the now infamous Panamanian law firm.

According to the ICIJ, the data covers the period from 1975 to 2015 and has links to people and companies in more than 200 countries and territories.

Raid

The ICIJ’s decision to put everything online comes weeks after Panamanian investigators carried out their second raid on the Mossack Fonseca offices; reportedly taking away bags full of shredded documents as evidence.

We don’t yet know if the second raid uncovered any truly important evidence. But it does indicate one thing: the thoroughness of the authorities when they feel they are on to business crime. And with the bulk of Mossack Fonseca’s dealings now online, there will be no shortage of people taking an interest in what has been going on at the law firm – and on whose behalf.

Leaks

Leaks from the Panama-based law firm have brought unwanted attention to a number of world figures and put tax evasion firmly back on the business agenda. That attention now looks set to be ratcheted up with the raids and ICIJ going online.

A matter of weeks ago, we published an ebook briefing about the scandal. We mentioned that the right legal representation will be vital for anyone implicated in the creation of tax evasion schemes and that failure to act in a strategic and appropriate manner may make you less able to counter investigators’ allegations.

Our experience in tax evasion cases means that we are familiar with the way investigators work: what they are looking for and how they go about finding it. When it comes to obtaining legal representation in such cases, solicitors who know exactly what “the other side’’ is planning to do should be appointed.

With the other side currently making repeated visits to Mossack Fonseca and all the potential evidence now online, the importance of a swift appointment of the right solicitor cannot be over emphasised to anyone implicated.

Defence

Such legal expertise has to be used to determine what action should be taken once there is even the slightest hint of an investigation or charge. The right defence case has to utilise all possible available evidence – whether being used by the prosecution or not – in order to establish that the person under suspicion worked with the best of intentions and in a way that can be shown to be in line with good professional practice.

At this stage, we do not know exactly why the documents were shredded at the Mossack Fonseca offices. Or how much further investigation will be prompted by the ICIJ’s decision to go online.

But the whole Mossack Fonseca incident does serve as a reminder of the need to make sure that all relevant material is retained and accessible. This is not merely because it may assist the defence: if investigators come searching for it and it is not available, the punishments for destroying, moving or concealing evidence can be severe.

Purpose

Raids are carried out for the primary purpose of securing material which could form the basis of a prosecution. Failure to follow legal guidelines can make a difficult situation much worse.

As a firm that has had many clients contact us after an unannounced raid on their premises, we understand that it can feel like a major intrusion on you personally and a disruption to you professionally. But we also know that, with the right legal approach and expertise in the field of raids and the relevant search warrants, there are often grounds for stopping a raid – or at least the seizure of material that results from it – in its tracks. This is regardless of how many bags of documents may be taken away in raids, as was the case at Mossack Fonseca.

Some of those working for the authorities carrying out raids are not always expert enough in this area of the law and are sometimes reluctant to seek appropriate advice from an external source. As a result, the warrants that are drafted are sometimes inappropriate or the full facts are not disclosed to a court when applying for permission to carry out a raid. Such circumstances can offer a defence team opportunities to challenge the raid’s validity and the ability of investigators to seize, retain and use certain material.

Quite what was shredded in the bags that have been seized from Mossack Fonseca’s Panamanian offices remains to be seen. Who can make a case out of what is now online is also unclear, at present.

What is certain to unfold, however, is a tax evasion investigation involving huge amounts of people, man hours, resources and public interest...leaving many people requiring the very best legal defence teams.


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