Mossack, Fonseca, Meryl Streep and Me

My interest in Jurgen Mossack and Ramon Fonseca, the Panamanian lawyers who were outed by the 2016 Panama Papers leak of 11 million documents from their classified database, goes back to 1999, when I was the first to point the finger at them.

The money laundering world in those days was tiny, so when I spoke about lawyers in Panama on Britain’s Channel Four News, everyone who associated Panama with dirty money, shell companies, false invoicing and phony banks knew I was referring to Mossack and Fonseca.

I wrote about Panama and sleaze in “The Merger.” Then, researching “The Sink,” I went to see a serious man who dealt with serious matters in a serious way from a corner office at FBI headquarters in Washington. We sat there for several hours, speaking about money laundering and offshore deceit. When I mentioned Niue – the Pacific rock that Mossack and Fonseca had set up as a “financial center” for Russians buying banks and Colombian’s buying bearer share duck blinds - he didn’t know anything about it. So I gave him my best ten-minute version of events, took a piece of paper and wrote down two names – Jurgen Mossack and Ramon Fonseca. He looked at them, shrugged and said thanks.

Ten days later, around dinner time, my phone rang and it was my new best friend at the FBI. “I’m calling to say we take these things seriously.”

I asked, “What things?”

“Those two names you gave me?”

“Oh... yeah.”

"Let me say... we have multiple areas of interest.”

I’d never heard that expression before so it stuck in my mind.

Multiple areas of interest.  

A decade and a half later, the “Panama Papers” put Mossack and Fonseca at the center of the greatest offshore tax evasion and money laundering scandal in history. And, frankly, it couldn't have happened to a more miserable pair of “depravados.” (Spanish for sleazebags?) I’m not sure why it took this long, or why they’d never been taken down until now, but better late than never.

Hearing the news that they’d finally been outed, I phoned my old pal from the FBI, now retired, and asked why he didn’t do anything way back when.

His answer was simple. “The door was shut. It was one thing to connect them to people we might have been looking at, and to businesses where we might have had an interest. But, they were in Panama. They’re lawyers. They’re politically connected. Getting to them would have taken a lot of time and effort. Even if we had put in the time and the effort, there was still only a slight chance of getting them out of there and bringing them here. Anyway, once 9/11 happened, everything changed. We had too many other things to deal with.”

I later met with the fellow who occupied that same big corner office at the FBI building. He already knew about those multiple areas of interest. 

Then came the film Laundromat, starring Meryl Streep, Gary Oldman and Antonio Banderas. It is based loosely on the book “Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite” by two-time Pulitzer Prize winner Jake Bernstein. I say loosely, because screenwriter Scott Burns and director Steven Soderbergh fictionalized parts of the true story to provide a vehicle for Meryl Streep.

Not surprisingly, it brought the wrath of Senors Mossack and Fonseca who - perhaps in need of money – decided to sue.

An obvious place to begin would have been to hire a major American law firm in Los Angeles or New York specializing in entertainment law and libel. Instead, they seemed to have worked out a contingency deal with a one-man-band criminal defense attorney in Stamford, Connecticut named Stephan Seeger. While he would not confirm his fee, or lack thereof, his website lists his usual areas of practice as DWI, DUI, stalking, harassment, drug possession, narcotics sales, larceny, robbery, computer crimes and murder.

Seeger’s initial filing on behalf of his Panamanian clients was on October 17, 2019, a day before the film was to be streamed on Netfilx. He sought an injunction to stop it. This, despite the fact that the film had already premiered at the Venice Film Festival the month before, had been shown at both the Toronto International and San Sebastián International Film Festivals, and had also gone to limited theatrical release.

If the cat being already out of the bag wasn’t enough to sink his chances, he filed the injunction in federal court in Connecticut. This, despite the fact that Netflix is based in California, the plaintiffs are based in Panama and none of the film was shot in, or takes place in, Connecticut. The only connections to Connecticut were that the Netflix is available there, and it was the most convenient place for Seeger.

Generally speaking, lawyers working on a no-win-no-pay basis don’t like to run up expenses they may never recoup. So filing a case just down the block must have seemed like a good idea at the time.

On the other side, the defense is represented by two seasoned entertainment lawyers from Pryor Cashman. Widely considered a leading entertainment, media and intellectual property firm, it boasts 1280 attorneys working out of offices in New York, Los Angeles and Miami. Precisely the kinds of guys you might have thought Mossack and Fonseca should have hired.

Leading the case is Tom Ferber, a partner in the New York office for the past 37 years. Alongside him is Michael Niborski, a partner in the Los Angeles office. Their reaction to Seeger’s motion, which claimed the film impinged on his clients’ reputations was, “That’s laughable.”

It was, after all, sort of a comedy.

The judge in Connecticut, however, wasn't laughing. He said, sorry sir, not my table, ruled, “Wrong venue,” and allowed the film to be streamed as planned.

Forced to move the case to less convenient Los Angeles, Seeger claims, “The implications and innuendo converge to cast Plaintiffs in the light of mastermind criminals whose crimes include, but are not limited to, murder, bribery, money laundering and/or corruption.”

Sounds about right.

To that he added, “Since both Mossack and Fonseca are the subjects of an FBI Investigation in the Southern District of New York that could result in a trial in the United States, the false “Big Screen” portrayal of their involvement in money laundering and/or other financial crimes poses an immediate threat and harm to the plaintiffs’ fair trial rights here.”

Wait... what... FBI investigation? Southern District of New York? Multiple areas of interest? Hah. I wonder, what are the chances that, somewhere, a Grand Jury has already indicted Mossack and Fonseca and that the indictment is sealed? That the FBI is simply waiting on them with handcuffs, hoping they're foolish enough to show up in the States? Like for a law suit against Netflix?

Mossack and Fonseca said for years that they’d never been charged with any crimes anywhere in the world. Now here was Seeger confirming that Mossack and Fonseca are currently defending themselves against criminal investigations. And not just in the Southern District of New York. According the complaint, the pair have also been named as defendants in several legal proceedings in Panama.

Then there is the less-than-minor matter of a major case out of Brazil. In early 2016, Mossack and Fonseca were named as persons of interest by Brazilian prosecutors investigating the bribery and money laundering scandal that has been nicknamed “Operation Car Wash.”

What began as a money laundering inquiry has turned into the most significant political and financial corruption scandal in Latin America’s history. Several businesses were revealed to have cooperated with each other, bribed company officials and bribed politicians to corrupt the bidding process for contracts with state-controlled oil conglomerate Petróleo Brasileiro SA (Petrobras).    

One of those companies, Odebrecht, is the largest construction firm in Latin America. The CEO, Marcelo Odebrecht, sprinkled money all over South and Central America – using purpose built structures in Angola and Panama to funnel bribes – in order to win contracts for offshore oil drilling rigs, tankers, oil and gas pipelines, and other heavy constructions deals. The company even had a dedicated bribe department, known as “The Structured Operations Section.” Oderbrecht was arrested, found guilty, and is currently serving 19 years in prison. 

Prosecutors soon accused the Mossack-Fonseca office in Brazil of helping to create shell companies used in the commission of crimes. They called the firm, “a big money launderer,” and filed criminal charges against five employees for money laundering offenses and the destruction of evidence.

Back in Panama, the excuse from Mossack and Fonseca was that their office in Brazil, was a franchise. That the firm in Panama practiced only in Panama and, therefore, the Panamanians had no responsibility for anything that might have happened in Brazil. Fonseca even insisted that he and Mossack were just “unwitting victims” of a political smear campaign.

The prosecutor in Brazil saw it differently. “There were at least two crimes committed by Mossack-Fonseca’s office in Brazil — financial crime and organized crime.” And that by registering companies offshore, Mossack-Fonseca’s objective was, “To hide the truthful beneficiaries of these shell companies.”  

While the situation in Brazil was bad for Mossack and Fonseca, their Achilles heel might yet be Nevada.

In studying the Panama Papers, and seeing the list of famous people who’d used Mossack-Fonseca’s services to help them hide money, it quickly became obvious - to me, at least - why the leaks contained relatively few American names.

First, for company formation, Americans have the convenience of Delaware. Second, when it comes to tax evasion, there are traditional pipelines running through the Caymans and the Bahamas. And third, for many Americans, Panama is just too downmarket and too shoddy.

But now, there might be another reason. If Mossack and Fonseca deliberately steered a wide berth around American clients it could be because they feared the long reach of American prosecutors. The last thing they ever wanted was to find themselves in the dock in US Federal Court.

It’s one thing to come from a culture where bribes can save you, it’s another to defend yourself in a culture where that doesn't work, and is prosecuted as an additional crime.

With that in mind, setting up MF Corporate Services (Nevada) and AAA Corporate Services (Wyoming) – both run by a single employee out of the Nevada office – appears careless.

As investigators in Brazil were looking at Odebrecht’s activities in Argentina, a private investigator there was looking for $65 million that was embezzled by a building tycoon named Lazaro Baez. His company, Austral Construcciones was a sometimes competitor and sometimes ally of Odebrecht. And, like Odebrecht, Baez has since been arrested, convicted of money laundering and is in prison.

That private investigator identified 123 shell companies that might be linked to the missing money – or at least to people who might be linked to the missing money – and each of those shells was incorporated by MF Corporate Services.

When the Brazilians asked Mossack-Fonseca about that, they claimed Nevada, like Brazil, was a franchise, operating independently of Panama and, consequently, they had nothing to do with Nevada.

However, the private investigator suitably establish that the Nevada office was indeed connected to the Panama office and brought his evidence to court in Nevada. There, a federal judge ordered Mossack and Fonseca to answer for it. In response, Mossack testified from Panama in a deposition, but under oath, that the two companies did not have a parent-subsidiary relationship, and swore that his Panamanian firm did not control the daily operations of his Nevada outpost.    

In their complaint, Seeger explains, “MF and/or MFSA entered into contracts with independent contractor representatives in many countries around the world (hereinafter "Representatives."), including, but not limited to the United Kingdom, Czech Republic, Switzerland, Peru, Ecuador, Brazil, Singapore, Cyprus, Israel, Dubai, Thailand, Guatemala, Chile, and the United States of America(Florida).”

Florida? Seriously? Nevada, Wyoming and now, Florida? That’s a revelation. So maybe it’s not just the US Attorney for the Southern District of New York who’s looking at them. Maybe there is an office in Nevada. And now, maybe there is yet another office in... Miami?

Until now, the only signs of them were in Nevada and Wyoming, where paperwork seems to show the Nevada office as being wholly owned by Mossack-Fonseca in Panama. And that certain Panama based IT people tried, remotely, to clean the logs of the PCs in the Nevada office, intending, as well, to eliminate any traces of Nevada’s access to the firm’s computer system. There is even an email noting that an employee from Panama had been sent to Nevada to get documents out of the country before the US Justice Department could find them. The email reads, “When Andrés came to Nevada he cleaned up everything and brought all documents to Panama.”

Now... Florida? The plot definitely thickens.

With investigations into illegalities by Odebrecht and Baez widening in Brazil, Argentina, Panama and Nevada, pressure continues to mount on Mossack and Fonseca. Word on the street is that the Panamanian police are looking closely at their MossFon Asset Management company.

Flashback to April 2016. The police in Panama raided Mossack-Fonseca’s offices. In early February 2017, prosecutors there ordered a second raid, this time looking for connections to Odebrecht. And all this time, in the States, the FBI has been asking serious questions about Mossack-Fonseca’s adventures in Nevada and Wyoming.

Not surprisingly, the Panamanian government has not been cooperating with the legal assistance required to document bribes paid to Panamanians and companies in Panama by Odebrecht. That was blocked by the then president Juan Carlos Varela. The Brazilians have been trying to document recipients for some €260 million paid to certain off-shore bank accounts. Allegedly included was €1 million paid into accounts at HSBC Hong Kong belonging to two suppliers of Varela’s family rum business.

Fonseca, who briefly served in Varela’s cabinet, quickly accused his longtime friend of taking bribes from Odebrecht. Varela denied it. As evidence to the contrary came to light, Varela decided, well, maybe, there might have been some money from Odebrecht that somehow dropped into his campaign. But, he insisted, his campaign coffers were transparent and even released records to show all the donations he received. Nothing appeared to be from Odebrecht.

In fact, additional evidence has since surfaced that some of that money might have found its way to people close to Varela through an account in Antigua and Barbuda. Again, Varela protested his innocence.

That’s when Mossack and Fonseca were arrested in Panama and held without bail as flight risks. They fought to have the “no bail” decision overturned and in April 2017, without explanation, the court released them on $500,000 each.

Since then, four employees of the firm - but not Mossack or Fonseca - have been charged in the US with conspiracy and tax fraud. The underlying allegations seem clear that the law firm Mossack-Fonseca, and related companies, have allegedly conspired to circumvent federal laws to maintain the wealth of clients and to conceal tax dollars owed to the IRS.

For what it’s worth, in Seeger’s filing, he notes that the conditions of their bail require them to remain in Panama and report to authorities twice a week.

Which beggars the question, how could they possibly testify on their own behalf in a California? And, would they even dare?

And that comes full circle back to a revelation in their suit against Netflix.

The suit says, “The defamatory representations made about Plaintiffs’ involvement in crime and unethical behavior, along with the disparaging manner in which the Plaintiffs and their protected logos are portrayed, stands to affect current proceedings against them in Panama and to pollute a potential jury pool in a U.S. criminal prosecution.”

The suit also says. “Ultimately, at the hands of Netflix, the Plaintiffs unwarrantedly solidify a global finance role as poster children for money laundering and tax evasion, with a logo that Netflix transforms into one that is synonymous with the same.”

So in addition to claiming defamation which encompasses libel and libel per se, false light invasion of privacy, they are claiming trademark infringement. They're aggrieved about their trademarked MF logo showing up in the film without their permission.

The only problem here might be that their trademarked logo is not trademarked in the United States.

Again, according to Seeger, “Further, in the course of the movie and its trailer, the Defendant also uses the Plaintiffs’ already public, famous and/or notorious trademarked logos disparagingly. The Defendant’s use and display of the logos in its movie “The Laundromat,” greatly diminishes and/or dilutes their value and goodwill. Defendant’s movie and its trailer also utilize the logos disparagingly, placing them in scenes that allow viewers to associate the logos with serious criminal and unethical behavior.”

Anyone care to linger on use of the term “good will?”

While Mossack and Fonseca are demanding a jury trial, Seeger fails in the complaint to quantify the damages they’re seeking. Ferber and Niborski note that, then respond to just about every paragraph, saying that the defendant, “denies knowledge or information sufficient to form a belief as to the truth of the allegations.”

They insist the plaintiff’s claims should be barred based on the doctrine of "substantial truth"; Netflix's First Amendment rights; and fair use of the MF trademark. Not to mention the fact that the trademark is not registered in the United States, nor has it been used here.

As for the claims of libel and libel per se, it’s only logical that Netflix will want to hear both Mossack and Finseca testify in front of a jury. But if the plaintiffs can't show up in California, and can't be cross-examined, libel and libel per se is going to be a difficult sell. They could always hear them in Panama. But why would Netflix want to accommodate them? Anyway, Netflix insists, their reputations and goodwill were already harmed by the Panama Papers.

Finally, there is the legal doctrine of “unclean hands.” Netflix asserts that Mossack and Fonseca cannot ask for the court’s judgment because they come forth with unclean hands, meaning that they have been unethical in relation to the subject of the lawsuit. After all, it’s the Panama Papers – and not the film – where they first earned their reputation as the poster children for offshore sleaze.

Is there a film in the making of the film?

I always warn people, never piss off a guy (like me) who buys ink by the barrel. In this case, never piss off a film company that understands how to make people look guilty when... frankly... they probably are. What I mean by that is, at least for me – the first guy to point a finger at them - their hands aren’t just unclean, they have been permanently filthy for decades.

*****

? Jeffrey Robinson 2020

If you enjoyed this, there’s plenty more where it came from. Feel free to share it with your followers. I’d be flattered if you did. At the same time, I'm always looking to connect with good people out there fighting the good fight. Please send an invite, and also follow along. I'd welcome your company. Cheers/ Jeffrey