Panama Papers: From the Guatemalan Drug Queen to the ‘most dangerous mobster in the world’
Mossack Fonseca’s malefactors revealed in latest data leak
Criminals with offshore links: Peruvian drug trafficker Ment Floor Dijkhuizen Cáceres, known as El Holandés; “Queen of the South” Marllory Dadiana Chacón Rossell; Boss of Bosses Semion Mogilevich – the Ukranian was dubbed “the most dangerous mobster in the world” and Fernando del Valle, Chilean money launderer
In November 2005, customs officials at the Dutch port of Rotterdam got a tip: a shipment of asparagus from Peru might contain something besides vegetables.
About a week later, 60 pallets of tinned white asparagus came into port inside three shipping containers. Eighty per cent of the cans contained asparagus. The rest contained cocaine – more than one and a half tons of it (1,360kg).
Dutch and Peruvian authorities said a man known in Peru as The Dutchman – Ment Dijkhuizen Cáceres – was behind the industrial-scale drug trafficking. Investigators found that he and his attorney, Eduardo Gallardo Arciniega, used a series of offshore shell companies to launder the money.
Dijkhuizen and Gallardo registered at least four of those front companies at Mossack Fonseca, the Panama-based law firm that has become known worldwide for creating hard-to-trace offshore companies by politicians, wealthy investors and, in many cases, notorious criminals.
Dijkhuizen is one of Mossack Fonseca’s malefactors – convicted felons and alleged wrongdoers – who have benefited from services provided by the law firm at the center of the Panama Papers scandal.
They come from the US, the UK, Spain and many other lands. They include mobsters, drug traffickers, arms smugglers, Ponzi schemers and other criminal figures, a review of the law firm’s internal files by the International Consortium of Investigative Journalists and other media partners, including The Irish Times, has found.
Mossack Fonseca’s internal files include companies tied to at least 36 Americans who have been accused or convicted of fraud or other serious financial misconduct. The law firm’s files also include at least 33 people and companies blacklisted by the US Treasury Department because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords or terrorist organizations like Hezbollah.
Mossack Fonseca has told ICIJ and other media partners that it “does not foster or promote unlawful acts.”
It said it relies on middlemen that it refers to as its “clients” – bankers, lawyers and other operatives that feed it business – to make sure that people who get offshore companies through the law firm aren’t involved in criminal activity. The law firm said it also has its own screening procedures designed to identify suspect customers “to the extent it is reasonably possible”.
In cases when companies formed by Mossack Fonseca ended up in the hands of criminals, a spokesman said, the firm has “strongly condemned that situation” and taken actions to deal with the problem.
The firm declined to answer questions about offshore companies linked to Dijkhuizen and five other notorious figures whose case histories are explored in this report –- including a drug boss known as “Queen of the South”, an American con man who set up a fake charity in the name of a Catholic saint and an alleged mobster known as the Russian underworld’s “Boss of Bosses”.
Fine and Educated Ways
Name: Ment Floor Dijkhuizen Cáceres
Claim to Fame: Drug trafficker
Locale: Peru and the Netherlands
AKA: El Holandés (The Dutchman)
Ment Dijkhuizen’s cocaine ring had been under scrutiny for years, long before his arrest. Sandra Barrios Villacorta, secretary to a key figure of Dijkhuizen’s organisation who had been arrested, was murdered while walking her daughter to school. Police suspected she “knew too much,” according to La Republica newspaper.
After learning in 2006 that Dijkhuizen had been the target of a massive drug bust, Jürgen Mossack, Mossack Fonseca’s co-founder, expressed surprise that his law firm had taken on such a man as a customer. “There are bank accounts?” Mossack wrote. “We are signatories? . . . I’m wondering what kind of due diligence is made in Peru on customers?”
Monica Ycaza, Mossack Fonseca’s Peru representative, wrote back that there was no way she could have known.
Dijkhuizen’s lawyer, Eduardo Gallardo Arciniega, who arranged for the companies to be created, was “a person of fine and educated ways, which gave us no cause to doubt him”, Ycaza said.
The Drug Queen
Name: Marllory Dadiana Chacón Rossell
Claim to Fame: Drug trafficker, money launderer
AKA: Queen of the South
In January 2012, US authorities identified Marllory Dadiana Chacón Rossell as “one of the most prolific narcotics traffickers in Central America.” US Treasury officials accused her of sending thousands of kilos of cocaine through Guatemala to the US and laundering tens of millions of dollars each month.
It’s rare enough for a woman to obtain drug lord status that the Guatemalan press dubbed her, “Queen of the South”.
At the height of Chacón Rossell’s reign, she and her family lived opulently in Guatemala City, mixing with politicians and high society and vacationing in Europe. By the time she was in her late 30s, she was the mother of five and the ruler of a business empire that included hotels, a national lottery, a construction firm and a high-end clothing store. US officials identified 24 business entities connected to her.
Mossack Fonseca played a role in her kingdom, the law firm’s internal records show.
In 2008, the law firm helped establish Brodway Commerce Inc. Chacón Rossell was listed as director and president. Mossack Fonseca also helped the company create accounts with Panama’s Banvivienda Bank and Guatemala’s Banco Reformador. By October 2009, the Banco Reformador account held $12 million, the records show.
In 2015, Chacón Rossell cut a deal with the US justice department, winning a reduced sentence in exchange for her co-operation with American authorities. Her actual punishment has been kept secret and a judge ordered the case sealed for five years.
Operation White Whale
Name: Fernando del Valle
Claim to fame: Money launderer
In 2005, Spanish authorities arrested 50 people in Operation White Whale, an investigation of what was called the largest money-laundering ring in Spain’s history. At the centre of the alleged $300 million laundering operation, prosecutors said, was a Chilean lawyer named Fernando del Valle, who set up shell companies that helped drug dealers, mafiosos, arms traffickers and pimps plow dirty money into real estate.
In 2007, two years after he was arrested in the White Whale case, del Valle got Mossack Fonseca to reactivate a company he had formed in 1979 called Nitel Values SA.
Mossack Fonseca did not learn of del Valle’s arrest until 2009, when he asked to create a new company for a German client. About a month later, Mossack Fonseca resigned as registered agent of Nitel Values.
In 2011 a Spanish court sentenced del Valle to more than six years in prison for money laundering and tax fraud.
Name: Martin Frankel
Claim to Fame: Fraudster
Locale: United States
In February 2000, US authorities approached Mossack Fonseca through the attorney general of the British Virgin Islands, demanding information on two offshore companies owned by colourful financial criminal Martin Frankel.
He had been a longtime customer of the law firm, even while embezzling more than $200 million from insurance companies in five states and then taking some of the money on the lam once discovered.
Frankel also set up a sham charitable foundation named after a Catholic saint that promised to raise money for the poor but instead bankrolled his lavish lifestyle, which included mansions, luxury cars, bodyguards and a bevy of girlfriends.
When Frankel fled the US in 1999, authorities said, he left behind an astrological chart drawn up to answer the question “Will I go to prison?” and a to-do list that included “launder money”. When authorities finally caught up with Frankel in Hamburg, Germany, they found 547 diamonds and nine fake passports.
Mossack Fonseca took several months to respond to the official request for documents in 2000. During the interim, it worked to shut down companies linked to Frankel and disengage from its association with him. In 2002, Frankel pleaded guilty to 20 counts of wire fraud as well as counts of securities fraud and racketeering conspiracy.
Guns and Money
Name: John Knight
Claim to Fame: Arms trafficker
In November 2004, John Knight admitted that he had negotiated with Sudan to supply it with tanks, rocket launchers, artillery guns, and Soviet airplanes-while it was engaged in genocide in Darfur.
Knight was already known in Britain. In 1991, a reporter from the Daily Mirror had gone undercover and arranged a deal to buy Kalashnikovs from him. When The Scotsman newspaper asked Knight in 2004 why he would sell weapons to the Sudanese regime, Knight pointed to Adolf Hitler, saying “people were supplying him with stuff. He was the biggest tyrant of the lot”.
Through an intermediary in Cyprus, Knight bought a British Virgin Islands shell company called Endeavour Resources Limited from Mossack Fonseca in 2005. He used that company to traffic arms in the Middle East, according to the British government.
In 2007, British customs authorities raided Knight’s $3 million house outside London in search of evidence he had been trading weapons with Iran. They found shredded documents, which, when pieced together later, showed Knight created a false trail to cover up his plan to buy 130 automatic weapons from Iran and sell them to Kuwait via Endeavour Resources. He was sentenced to four years in prison for the scheme.
Mossack Fonseca resigned as registered agent for Endeavour Resources, but it remains the agent for Business Systems Consultant Ltd, a Bahamian company that was listed as Endeavour Resources’ director.
Boss of Bosses
Name: Semion Mogilevich
Claim to Fame: Dubbed “the most dangerous mobster in the world”
AKA: the Boss of Bosses; the Brainy Don; Mr. Bigski; Seva
In 2009, the FBI named Semion Mogilevich to its Top Ten Most Wanted fugitives list, calling him a “global con artist and ruthless criminal” who was “involved in weapons trafficking, contract murders, extortion, drug trafficking, and prostitution on an international scale”. Known as the Boss of Bosses, the chain-smoking, portly Ukrainian’s signature method of neutralising an enemy was the car bomb, the Guardian reported.
An indictment secured by US authorities in 2003 charged Mogilevich with being behind the fraud at YBM Magnex International, a publicly traded Pennsylvania company that bilked investors out of $150 million.
Mogilevich had several close connections to shell companies registered by Mossack Fonseca, though none appear to have been in his name. In 2001, the attorney general’s office of the Bahamas wrote to Mossack Fonseca requesting information about Rosebud Consultants Inc, a company registered by the law firm in Nassau.
Bahamian officials were acting in response to request from US authorities who were investigating what they alleged were payments made to Mogilevich through Rosebud and his attorney, Adrian Churchward, in connection with the YBM Magnex scandal.
Mossack Fonseca’s own files do not show any links between Churchward and Rosebud, but the investigative request said US prosecutors believed Churchward was “associated” with Rosebud and that the company was funneling $20,000 a month in “consulting fees” to Mogilevich.
Churchward was also director of Trinity Films Inc along with Galina V Grigoryeva, who was married to Mogilevich and later to Churchward. Mossack Fonseca registered that company in March 1996 in the Bahamas.
Churchward now writes thrillers, including “Moscow Bound,” about the estranged wife of a Russian oligarch and a lawyer on the run for a crime they didn’t commit. After the release of the initial Panama Papers stories, Churchward was heavily critical of the offshore industry, saying on Twitter that the rich and powerful have “a tight grip on their corruption.”
“Nothing will change,” he added. “The ‘Global elite’ and their political servants aren’t turkeys who are about to vote for Christmas.”
Asked for comment on his connection to companies at Mossack Fonseca, Churchward said in a email: “My lawyers have advised me that if Mr Moguilevitch goes to trial I may be called by either the prosecution or defence to give testimony as a witness and, as such, I should not comment on any aspects of any alleged relationship with Mr Moguilevitch, business or otherwise.”
Another Mogilevich connection in the Panama Papers is Igor Fisherman, a Ukrainian-born American charged alongside Mogilevich by the US in the YBM Magnex scam. Fisherman’s wife Olga Zhunzhurova held power of attorney over Hastan Finance SA, a company purchased in the Seychelles, an offshore haven in the Indian Ocean, through an intermediary in Switzerland.
The FBI said in 2009 that Mogilevich was living in Moscow. In 2015, the agency took him off its “Ten Most Wanted” list, noting that “the extensive national and international publicity afforded him has not generated information which would assist in his apprehension.”
Mogilevich could not be reached for comment for this story. In a 1999 article, the New York Times quoted him as saying: “I am not a leader or an active participant of any criminal group.” When the BBC asked him about the YBM Magnex case in 1999, he said: “Well, if they found old-fashioned hanky-panky, it’s up to them to prove it.”
Frankel, Knight and Dijkhuizen also could not be reached for this story. In an email, Del Valle said he could not comment. Chacón Rossell’s attorney said her client declined comment.