Law firms pride themselves on being the ultimate safe haven, where men and women alike can count on discretion and privacy when it comes to their most personal affairs. With the recent release of the ‘Panama Papers’, law firms are coming under fire for their cybersecurity or lack thereof. Unfortunately, these data breaches are becoming more and more common for law firms.
On April 3, 2016, 11.5 million confidential documents that provide detailed information on more than 214,000 offshore companies listed by a Panamanian law firm Mossack Fonseca, including the identities of shareholders and directors of said offshore companies. Mossack Fonseca is the fourth largest offshore law firm in the world with more than 40 offices worldwide. Ironically enough, before the Panama Papers leak, Mossack Fonseca was described by the Economist in 2012 as a “tight-lipped” industry leader in offshore finance. In fact, Las Vegas-based subsidiary of Mossack Fonseca is listed as the registered agent for 1,026 firms incorporated over the past decade and a half, many of which have since been dissolved or are no longer active.
These leaked Panama Papers have revealed the hidden wealth from some of the most high-ranking political officials, billionaires, celebrities and star athletes. This is important because the leak shows how the rich and famous can exploit tax shelters and also reveals an unprecedented pattern of corruption worldwide for 40 years. While shell companies inherently are not illegal, they are often used as a method to commit fraud.
The Panama Papers were leaked by an anonymous source who communicated with journalists that Mossack Fonseca was behaving unethically, thus deserving to be shut down. Below is a list of the most important information gleaned from the Panama Papers leak according to the Guardian News.
-Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.
-A $2bn trail leads all the way to Vladimir Putin. The Russian president’s best friend – a cellist called Sergei Roldugin – is at the centre of a scheme in which money from Russian state banks is hidden offshore. Some of it ends up in a ski resort where in 2013 Putin’s daughter Katerina got married.
-Among national leaders with offshore wealth are Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt’s former president; and the prime minister of Iceland, Sigmundur Davíð Gunnlaugsson.
-In the UK, six members of the House of Lords, three former Conservative MPs and dozens of donors to British political parties have had offshore assets.
-The families of at least eight current and former members of China’s supreme ruling body, the politburo, have been found to have hidden wealth offshore.
-Twenty-three individuals who have had sanctions imposed on them for supporting the regimes in North Korea, Zimbabwe, Russia, Iran and Syria have been clients of Mossack Fonseca. Their companies were harboured by the Seychelles, the British Virgin Islands, Panama and other jurisdictions.
-A key member of Fifa’s powerful ethics committee, which is supposed to be spearheading reform at world football’s scandal-hit governing body, acted as a lawyer for individuals and companies recently charged with bribery and corruption.
-One leaked memorandum from a partner of Mossack Fonseca said: “Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.”
For further information on data breaches and law firms, please refer to one of our earlier articles: https://axiomcyber.com/blog/hacking/law-firms-beware-of-cyber-criminals/
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