The US Justice Department has propelled a criminal probe into the infamous widespread of global tax avoidance schemes exposed by the Panama Papers leak.
Preet Bharara, a lawyer for Manhattan, said in a statement that he had opened an enquiry regarding matters to which the Panama Papers are relevant. According to The Guardian, Bharara sent a letter to the International Consortium of Investigative Journalist or ICIJ, which coordinated the unprecedented leak of 11.5 million documents from law firm Mossack Fonseca, to request for more detailed information to assist with his investigation.
Financial Times reported that the ICIJ and other news group published multiple headlines based on the leaked documents. The stories exposed accounts which linked to Vladimir Putin's close friend, Prime Minister of Iceland Sigmundur David Gunnlaugsson, and UK's David Cameron. The US Department of Justice has been cracking down on US citizens and banking firms who assisted companies in tax evasion by hiding profits in undeclared offshore bank accounts for nearly a decade.
The IRS and the Treasury officials encouraged American citizens and companies that may have money in accounts abroad to contact the agency before any possible legal activity on their part is identified, reports CNBC News. Last year, the Treasure Department estimated more than $300 billion dollars of illicit proceeds generated in the US annually, with criminals using local and offshore companies to launder funds.
Following the revelations about the offshore tax arrangements, the Panama Papers leak has ignited a public outrage across the globe, including the resignations of Spain's industry minister and Iceland's prime minister. Last week, offices of Mossack Fonseca in Panama were raided by police officers on the orders of the nation's attorney general in an attempt to establish the use of the form of illegal activities
President Jim Yong Kim of the World Bank, said that the leaked documents and the revelations that many of the world's wealthiest and most influential people are evading millions of taxes by hiding from the taxman in offshore havens is "very, very damaging and a great, great concern" to the bank's mission to exterminate extreme poverty.
