Money laundering: First American appears in court over Panama Papers – ICIJ
05 Feb 2019

An accountant alleged to have committed financial crime offences related to the Panama Papers has appeared in court, according to the International Consortium of Investigative Journalists (ICIJ), which published details of the scandal when it first broke.

Richard Gaffey pleaded ‘not guilty’ before the District Court for the Southern District of New York on 17 December, according the ICIJ.

Massachusetts-based Gaffey was arrested on charges of conspiracy to commit tax evasion and money laundering, and faces up to 20 years in prison if convicted of the latter. US authorities said in December they had arrested Gaffey and two other individuals regarding the case, and that a Panamanian attorney who worked for Mossack Fonseca, remains at large.

In addition to assisting a co-defendant with evading US income taxes and reporting requirements, Gaffey also allegedly helped a Mossack Fonseca client defraud the IRS. The client maintained a series of offshore bank accounts, which Mossack Fonseca helped conceal from the IRS for years, the Department of Justice alleged.

“Client-1 covertly repatriated approximately $3 million of Client-1’s offshore money to the United States by falsely stating on Client-1’s federal tax return that the money represented proceeds from the sale of a company.

“After Client-1 repatriated approximately $3 million in this manner, approximately $1 million still remained in Client-1’s offshore account, the existence of which remained hidden from the IRS,” the DoJ explained.

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