The biggest tax evasion data leaks in history
In 2015, an anonymous source leaked to the Süddeutsche Zeitung a cache of data containing 11.5 million documents from Panama-based law firm Mossack Fonesca. The German newspaper sought the help of the International Consortium of Investigative Journalists (ICIJ) to sort through the 2.6 terabytes of information — which included emails, financial spreadsheets and corporate records reaching back to 1977 — before the first findings were published in April 2016.
The documents detailed how the firm helped its clients avoid taxes and launder money. Some contained information relating to 214,000 shell companies set up by Mossack Fonesca. The leak implicated prominent politicians and celebrities, including Iceland's then-prime minister, Sigmundur David Gunnlaugsson, who resigned two days after the leak was made public.
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On Sunday, reporting on 13.4 million more documents exposing tax avoidance schemes made headlines around the globe. Though the trove is not as large as the Panama Papers, the Paradise Papers have continued to expose on how corporations, high-ranking politicians and the super wealthy avoid paying taxes.
The Süddeutsche Zeitung again obtained the data, and the ICIJ once more provided its assistance. The ICIJ has said that 120 politicians from around 50 countries appear in the documents. The most prominent name revealed thus far is Queen Elizabeth II — the papers showed that around 10 million pounds ($13 million, €11.3 million) of her private money was placed in funds held in the Cayman Islands and Bermuda, though there was no suggestion of illegal activity.
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Offshore: The legal and the not so legal
The 2013 "Offshore Leaks" reporting helped to bring the discussion over offshore finances into the public sphere. The ICIJ collaborated with journalists around the world to filter through 260 gigabytes of data, including 2.5 million documents detailing how some wealthy people use tax havens to hide their money from tax authorities.
An unnamed insider told the Süddeutsche Zeitung that the leak was "the biggest blow so far to the black hole of the world economy." The most significant name revealed in the documents was Gunther Sachs, a German-born industrialist who the reporting said hid millions in offshore firms in Luxembourg, Panama, the British Virgin Islands and the Cook Islands.
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The secret world of tax havens
In November 2014, an ICIJ report revealed that hundreds of companies worldwide had signed secret deals with Luxembourg to save billions in taxes. The ICIJ reviewed 28,000 pages of leaked documents detailing financial arrangements with the small EU nation, including tax rulings set up by PricewaterhouseCoopers from 2002 to 2010 to the benefit of its clients.
Major companies like Deutsche Bank, Pepsi and Ikea were among those that took advantage of tax avoidance schemes by funneling hundreds of billions of dollars through the country. The "LuxLeaks" piled pressure on European Commission President Jean-Claude Juncker, who is a former prime minister of Luxembourg. Two whistleblowers and the journalist who first published the "LuxLeaks" revelations were indicted in Luxembourg, but only the whistleblowers received suspended jail sentences.
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The ICIJ released a report in February 2015 revealing that British bank HSBC Holdings PLC had helped wealthy customers hide millions of dollars in its Swiss subsidiary. Geneva prosecutors opened a money-laundering investigation into the HSBC Private Bank in Switzerland and alleged that €180.6 billion passed through HSBC accounts in Geneva held by clients and offshore companies between November 2006 and March 2007.
The source of the "SwissLeaks" revelation was Herve Falciani, a former IT specialist at HSBC's Swiss branch. Falciani was handed a five-year jail sentence by a Swiss court, but he didn't attend the trial and won't be extradited from France as the country does not extradite its citizens. HSBC paid $40 million to end the money-laundering probe.