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Panama Papers Show 200,000 Offshore Accounts

An activist shows fake banknotes during a demonstration outside the European Commission (EC) headquarters ahead of statements by the EC on the effectiveness of existing measures against tax evasion and money-laundering in light of the recent Panama Paper releases. (Reuters/Yves Herman)
An activist shows fake banknotes during a demonstration outside the European Commission (EC) headquarters ahead of statements by the EC on the effectiveness of existing measures against tax evasion and money-laundering in light of the recent Panama Paper releases. (Reuters/Yves Herman)
Panama Papers Show 200,000 Offshore Accounts
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The country of choice for secret offshore accounts opened by Panamanian lawyers is a small island nation, the British Virgin Islands.

That information comes from a new report Monday by the International Consortium of Investigative Journalists. A consortium is a group of people who work together on a project.

The consortium looked into documents that showed about 200,000 offshore businesses created for wealthy people by the Mossack Fonseca law firm in Panama.

Some information was released last month. The documents, obtained from the law firm by a person known as “John Doe,” is called the “Panama Papers.” Panama is the home of Mossack Fonseca.

John Doe is a name used by people who don’t want others to know who they are. Is is called an alias, or another name a person uses.

The consortium said the Panamanian law firm set up shell companies, or companies for which there is very little information. There is very little business activity in a shell company. These were set up for wealthy people in countries to hide their money.

More than 50 percent of the offshore businesses in the consortium’s large database were registered in the British Virgin Islands, or BVI.

BVI is a Caribbean nation of 32,000 people listed as No. 21 by the Tax Justice Network of the world’s “most secret nations.”

Other nations that registered offshore companies for Mossack Fonseca included Panama, the Bahamas, the Seychelles, Niue, Samoa, as well as the U.S. states of Nevada and Wyoming, according to the consortium.

On Monday, the consortium released a database of nearly 214,000 offshore businesses. The database allows people to search by name, and learn if a person is listed as owner of an offshore company registered by Mossack Fonseca.

Last month, the center reported how the rich and powerful used offshore companies to hide wealth. The information brought down leading government officials in Iceland and Spain.

It also showed secret offshore companies registered to friends of Russian President Vladimir Putin and the father of British Prime Minister David Cameron.

“The new database has the potential for even greater impact, said Marine Walker Guevara, co-director of the consortium.

She said the consortium is “putting the power back in the hands of citizens’’ who can search to see who in their country has secret offshore businesses.

The consortium warned that since many names are similar, people should check information carefully before deciding a person is really the registered owner of an offshore company.

Journalists working with the consortium said they found at least 36 Americans accused of financial wrongdoing who got offshore companies registered by Mossack Fonseca.

Among them was Leonard Gotshalk, a former player with the National Football League’s Atlanta Falcons. He had a history of legal problems when he sought the law firm’s help.

Mossack Fonseca at first told Gotshalk it couldn’t do business with him, because of “negative information.” He asked Mossack Fonseca to reconsider, saying in an email he had “held offshore accounts in the past in Europe, the Bahamas and Belize” without problems.

Three months later – on May 21, 2010 – the U.S. government charged Gotshalk with illegal action to get higher prices for technology company stocks.

On May 24, Mossack Fonseca recorded a $3,055 payment from Gotshalk to open up a company called Irishmyst Consultants Limited in the British Virgin Islands, according to the consortium.

The consortium says that offshore accounts are not illegal, but people use them to avoid tax payments.

Last week, President Barack Obama responded to the Panama Papers by calling on Congress to pass bills to require information about the owners of offshore companies.

Among companies registered in the British Virgin Islands is a company called Wintris Incorporated. Former prime minister of Iceland, Sigmundur David Gunnlaugsson, and his wife, are part owners, according to the consortium.

After the consortium of journalists reported the prime minister’s connection to Wintris, thousands protested outside Iceland’s parliament building. He resigned within 48 hours.

Carol Guensburg reported on this story for Bruce Alpert adapted this story for Learning English. Kathleen Struck was the editor.

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Words in This Story

offshore accounts n. Businesses set up in another country without information about the true owners. These accounts are often used to avoid taxes

databasen. a collection of pieces of information that is organized and used on a computer

potentialn. a chance or possibility that someone will gain from information

impactn. a powerful effect

negative adj. harmful or bad

account – n. a record of money that has been paid and money that has been received