Eight Years Later: Panama Court Acquits Defendants in Panama Papers Scandal

In Summary

• A Panamanian court acquitted more than two dozen defendants in the Panama Papers scandal.
• Prosecutors had sought prison sentences for money laundering.
• he Panama Papers exposed tax havens involving prominent figures like Lionel Messi and Aliko Dangote.
• Mossack Fonseca, the law firm was accused of creating offshore companies to hide money linked to illegal activities.
• Judge Baloisa Marquinez cited a lack of conclusive evidence and due process issues with collected evidence.
• Panama's government introduced measures to identify the ultimate beneficiaries of limited liability companies.
• The Panama Papers revelations led to protests, government investigations, and political resignations.

BANGUI, CENTRAL AFRICAN REPUBLIC- Eight years after 11 million secret financial documents were leaked, a court in Panama on Friday acquitted more than two dozen defendants implicated in the Panama Papers scandal. Prosecutors had been seeking prison sentences for money laundering charges.

The Panama Papers scandal, which surfaced in 2016, exposed a network of tax havens involving high-profile individuals, including football star Lionel Messi and Africa's richest man Aliko Dangote. According to Panamanian prosecutors, the Mossack Fonseca law firm and their associates created a web of offshore companies to conceal money linked to illegal activities in the “car wash” corruption scandal involving the Brazilian construction company Odebrecht. Some of the shell corporations set up by the firm were used for fraud, tax evasion, or to avoid international sanctions.

Judge Baloisa Marquinez, presiding over the case, cited a lack of conclusive evidence on the money laundering charges. She noted that evidence collected from the law firm's servers had not been gathered in line with due process, which raised doubts about its "authenticity and integrity."

Mossack Fonseca was once the world's fourth-largest offshore law firm. In the aftermath of the scandal, Panama’s government took significant steps to increase transparency, including measures to identify the ultimate beneficiaries behind limited liability companies and their assets.

The Panama Papers investigation was based on a trove of 11.5 million files leaked to the German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ). The investigation exposed the offshore financial secrets of some of the world’s richest and most powerful public figures. The revelations triggered widespread protests, government probes, and the resignation of Iceland’s prime minister.

Despite the acquittal, the Panama Papers scandal remains a landmark case in the fight against financial secrecy and corruption.