The documents held by Panama-based law firm Mossack Fonseca expose Alaa Mubarak's offshore account in the British Virgin Islands.
In a leak dubbed as the biggest in history, 11.5 million documents held by Panama-based law firm Mossack Fonseca expose a global web of corruption that involves world leaders, celebrities, and athletes with offshore holdings in tax havens.
The documents were leaked anonymously to German newspaper Suddeutsche Zeitung, which then shared them with the International Consortium of Investigative Journalists (ICIJ). After a team of 107 media organisations from 78 countries, including BBC, The Guardian, and Le Monde, analysed the documents, reports show “how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars,” says ICJC.
The report exposes how the world’s rich exploit secretive offshore tax regimes to launder money, dodge sanctions, and evade taxes, including 12 current and former world leaders as well as 128 more politicians and public officials around the world.
Among the findings are Egyptian former president Hosni Mubarak’s son Alaa Mubarak, who owned the firm Pan World Investments Inc., managed by Credit Suisse and set in the British Virgin Islands. After his father’s ousting and arrest together with his two sons following the 2011 uprising, BVI authorities told Mossack Fonseca to freeze Pan World's assets, an order prompted by a European Union law.
“In 2013, Mossack Fonseca was fined $37,500 for failing to properly check into Alaa Mubarak, ‘a high risk customer,’” ICIJ says. Although Mossack Fonseca admitted internally that its procedures were flawed since Mubarak hadn't been identified early enough, Credit Suisse wrote Mossack Fonseca that Pan World's activities – "one investment with HIG Venture Fund" and a cash account with the bank – did not contravene Switzerland's freeze on Mubarak's assets.
In 2014, as a second British Virgin Islands agency started investigating Mossack Fonseca and Pan World, company employees admitted internally that they could be found in further breaches as they had "very little control" over Mubarak's company, and resigned as its agent in April 2015.
Other 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; and the prime minister of Iceland, Sigmundur Davíð Gunnlaugsson. But the case making headlines worldwide is that of Russian president Vladimir Putin and his $1 billion in offshore holdings.