Panama Papers Leak Shows How the Uber-Wealthy Hide Assets During Divorce

German-based newspaper Suddeutsche Zeitung, in conjunction with the International Consortium of Investigative Journalists, first reported that over 2.6 terabytes of data from Panama-based law firm Mossack Fonseca & Co. were compromised and leaked to the public. This data, referred by worldwide news outlets as the “Panama Papers”, is sending waves throughout worldwide politics and the uber-wealthy. These documents establish tactics, many which are unethical if not illegal, in the divorce cases of the world’s richest people.

According to the Panama Papers, Mossack Fonseca & Co. has for years helped the world’s elite create offshore “shell corporations”. Many did so during or in preparation for a divorce for the purpose of hiding or shielding assets, as reported locally by the Charlotte Observer. Mossack Fonseca helped Russian mineral magnate Dmitri Rybolovlev create a company in the British Virgin Islands with only a PO Box in the Caribbean island of Tortola. This company did no business, made no product, and had no employees; however, it listed assets valued at $650 million and included paintings by Picasso, Van Gogh, and Monet. Another Mossack Fonseca client, with a shell corporation established in Thailand, asked the firm to create a “silver bullet” in the event his wife ever tried to claim his assets during divorce. Emails show that Mossack Fonseca recommended a client acquire a shell corporation based in Ecuador to transfer assets before a divorce was filed.

Only a small amount of the Panama Papers have been analyzed and dissected by global news agencies. The Panama Papers consist of about 11.5 million documents, including 4.8 emails. These information is usually protected by the attorney-client privilege, making their disclosure an insight into the strategy and the possibly illegal tactics utilized by Mossack Fonseca & Co. At 2.6 terabytes (1 terabyte is 1,000 gigabytes), the size of this leak is unprecedented and undoubtedly more dubious activities will be uncovered. By contrast, the 2010 WikiLeaks organized by Julian Assange was only 1.7 gigabytes and the leak of NSA documents by Edward Snowden was only about 1/10th the size. This data connects roughly 200 different countries, including the offshore holdings of 140 politicians and public officials. Mossack Fonseca’s clients include the richest of the rich, including Russian President Vladimir Putin.

Hiding assets during the divorce process is strictly prohibited in North Carolina. Our equitable distribution statute and process is predicated on a forthright and complete disclosure of all assets and debts owned by either spouse. If either spouse believes the other may try to hide, transfer, or even waste marital, divisible, or separate property, they may seek injunctive relief from the Court to prevent such action. You may also seek reimbursement of attorney’s fees related to that action. If a Court Order is entered preventing either spouse from using, transferring, or converting any asset and one spouse does, in fact, do so, they are subject to the contempt powers of Court which include financial penalty or jail time.

If you would like to learn more about how to protect your assets in equitable distribution and divorce, please contact us to schedule a confidential consultation at (704) 810-1400.

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