Colombia arrests business moguls in ‘Panama Papers’ probe

October 9, 2017

October, 5 2017 (Colombia reports)

Multiple top businessmen were arrested in Colombia Wednesday for alleged crimes of fraud and money laundering that came to light through investigations related to the “Panama Papers” scandal.

Six business managers were arrested and another nine were charged for financial crimes committed through boutique Panamanian law firm Mossack Fonseca.

At least fourteen major businesses, including money-transfer company Efecty, distributor Servientrega, and national newspaper El Heraldo, all have top managers implicated in the investigation by Colombia’s financial crimes prosecutor.

On Wednesday, the prosecutor’s office arrested the president of wire Efecty and Servientrega, Luz Guerrero, as well as members of her financial and legal staff, together accused of hiding $1.5 million from Colombia’s national tax agency.

Bringing back the ‘Panama Papers’

In 2015, over 11 million files from Mossack Fonseca were leaked in a scandal known as the “Panama Papers.”

According to information gleaned from leaked documents at the time, Mossack Fonseca was suspected of helping numerous world leaders, banks and celebrities evade domestic taxes since at least the 1970s.

After 2015, little more of the ‘Panama Papers’ scandal ever surfaced. But Colombia’s top financial crimes prosecutor, Andres Jimenez, was able to confirm Wednesday that Mossack Fonseca took an active part in helping Colombian companies commit fraud and tax evasion.

According to the prosecutor, between 2010 and 2016 Colombian companies went through Mossack Fonseca to sign contracts with fake businesses abroad, facilitating the transfer of company funds out of Colombia where they could be banked without paying domestic taxes.

“By this illicit activity, Mossack Fonseca Colombia, in association with its parent company in Panama, charged a fee between 2.5% and 4% of the value of the contracts depending on the country where the fake company was held,” says the report from the prosecutor’s office.

While parking legal money abroad is not illegal in Colombia, using an offshore “shell company” to avoid paying domestic taxes or international sanctions is a crime.

Cost to taxpayer

Offshore money also prevents authorities from verifying whether money stashed in fiscal paradises is legal, and in 2015 former Colombian tax chief Juan Ortega claimed offshore money may be costing the country hundreds of millions of dollars in tax revenue.

Those under investigation for money laundering, tax evasion, or fraud in relation to the ‘Panama Papers’ include Elaine Abuchaibe, Beder Pinto, and Maria Fadul from the legal and financial teams at El Heraldo newspaper.

The list also includes Maria Ortiz, Claudia Mira, and Diego Serna from Rymel Electric Engineering.

From Zambrano Pinzon Associates Investments: Pedro Zambrano, Juan Rozo, and Angela Rincon.

And from Aretextil: Claudia Aristizabal, Luis Orego and Jose Gutierrez.