The Tax Times: Former U.S. Taxpayer Pleads Guilty in Panama Papers Investigation

According to DoJ, a former U.S. resident and taxpayer who was charged along with three others in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panamanian-based global law firm, and its related entities, pleaded guilty on February 18, 2020 to wire and tax fraud, money laundering, false statements and other charges.

Harald Joachim von der Goltz, aka “H.J von der Goltz,” “Johan von der Goltz,” “Jochen von der Goltz,” “Tica,” and “Tika,” 82, a citizen of Germany and Guatemala who last resided in Needham, Massachusetts, and Key Biscayne, Florida, pleaded guilty to one count of conspiracy to commit tax evasion, one count of wire fraud, one count of money laundering conspiracy, four counts of willful failure to file reports of foreign bank and financial accounts (Financial Crimes Enforcement Network Reports 114) and two counts of false statements.

“Over nearly two decades, von der Goltz conspired to keep his income hidden from U.S. tax authorities and law enforcement,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.

“Today’s Guilty Plea Demonstrates The Department’s Steadfast Commitment To Prosecute Taxpayers Who Use Offshore Structures To Obscure Their Wealth And Evade Their Tax Obligations.”

“Harald Joachim von der Goltz went to extraordinary lengths to circumvent U.S. tax laws in order to maintain his wealth and hide it from the IRS,” said U.S. Attorney Geoffrey S. Berman of the Southern District of New York.

“Using the specialized criminal services of global law firm Mossack Fonseca, von der Goltz set up shell companies and off-shore accounts to conceal millions of dollars. Now, after years of concealment from the United States, von der Goltz has admitted guilt in a U.S. court and awaits sentencing that could result in a term in a U.S. prison.”

According to the allegations contained in the indictments, other filings in this case and statements during court proceedings, including von der Goltz’s guilty plea hearing, since at least 2000 through 2017, von der Goltz conspired with others to conceal his assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful and dishonest means.

During all relevant times, von der Goltz was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts.

Nevertheless, von der Goltz evaded his tax reporting obligations by setting up a series of shell companies and bank accounts, and hiding his beneficial ownership of the shell companies and bank accounts from the IRS.
These shell companies and bank accounts made investments totaling tens of millions of dollars. Von der Goltz was assisted in this scheme through the use of Mossack Fonseca, including Ramses Owens, a Panamanian lawyer who previously worked at the Mossack Fonseca law firm, and by Richard Gaffey, a partner at a U.S.- based accounting firm.
In furtherance of von der Goltz’s efforts to conceal his assets and income from the IRS, von der Goltz engaged the services of Mossack Fonseca, including Owens, to create a sham foundation and shell companies formed under the laws of Panama and the British Virgin Islands to conceal from the IRS and others the ownership by von der Goltz of accounts established at overseas banks, as well as the income generated in those accounts.
von der Goltz, Gaffey and Owens also falsely claimed that von der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and — unlike von der Goltz — was not a U.S. taxpayer.

Von der Goltz is scheduled to be sentenced by U.S. District Judge Richard M. Berman on February 24, 2020.

Gaffey is scheduled to proceed to trial on March 9, 2020, before Judge Berman.

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