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Ramon Fonseca, one of the founders of Panama's Mossack Fonseca law firm, speaking on Telemetro TV in Panama City, on April 4, 2016.(Photo: AFP/Getty Images)
MIAMI<span style="color: Red;">*</span>— The release of the Panama Papers<span style="color: Red;">*</span>may introduce<span style="color: Red;">*</span>most people to the secretive law firm that created offshore corporations that helped world leaders hide assets, but<span style="color: Red;">*</span>Mossack Fonseca was already well known to investigators and prosecutors around the world.
The Panama City firm, created in the 1980s through a merger of<span style="color: Red;">*</span>the law practices of German-born Jurgen Mossack and Panamanian lawyer Ramon Fonseca, has long been in the middle of investigations into money-laundering, corruption and<span style="color: Red;">*</span>government graft.
In January, one of the lead prosecutors in Brazil's ever-growing corruption scandal publicly called Mossack Fonseca "a big money launderer" involved in the wide-ranging probe. Last year, the firm became a central part of a lawsuit that alleged Argentina's former president created 123 shell companies in Las Vegas to hide stolen assets. And as far back as 2001, the U.S. State Department said the firm entered into an "awkward sharing agreement" with the tiny Pacific island of Niue to control foreign companies' ability to establish themselves there.
Despite so many question marks over the years, the firm responds with a simple point.
"We have never been found guilty of absolutely anything," Ramon Fonseca said Sunday<span style="color: Red;">*</span>in an interview with Panamanian news<span style="color: Red;">*</span>channel TVN.
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Fonseca<span style="color: Red;">*</span>said<span style="color: Red;">*</span>his firm legally<span style="color: Red;">*</span>creates companies on behalf of a wide variety of entities <span style="color: Red;">*</span>—<span style="color: Red;">*</span>banks, corporations, lawyers and other agents. He also said his firm has some responsibility to ensure that those entities are legal and not engaged in criminal activity.<span style="color: Red;">*</span>Once a<span style="color: Red;">*</span>corporation is created and handed over to those entities, Fonseca said his firm's involvement, and culpability, is over.
"We are not responsible for the actions of the corporations that we form,"<span style="color: Red;">*</span>he told TVN<span style="color: Red;">*</span>after reports of the Panama Papers were released. "Ninety-nine percent of the corporations we sell are legitimate, they don't get into trouble. But because of the enormous numbers of corporations we sell, some of them are going to get into trouble.<span style="color: Red;">*</span>That's normal."
Ana Owens, a tax and budget advocate at U.S. Public Interest Research Group, a collection of liberal consumer advocacy organizations, said Fonseca appears to be absolutely right. Owens said U.S. and international law have<span style="color: Red;">*</span>combined to create legal protections for firms like Mossack Fonseca to form corporations, hand them over and be clear of any blame for what that corporation does.
She said there are thousands of similar "corporation mills" in the United States alone, meaning the disclosures in the Panama Papers is just one slice of a broader global scheme to hide assets.
"This is extremely common," Owens said. "Everything that the Panama firm has done, as far as I know, is perfectly legal. As long as they can claim that they didn't know about anything these corporations were doing, then everything is fine."
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The international focus on Mossack Fonseca is new<span style="color: Red;">*</span>for the reclusive firm, which has long operated in the shadows of the global financial system.
Not much is known about<span style="color: Red;">*</span> Mossack, who has made no statements since the documents were released.<span style="color: Red;">*</span>Mossack's father was a member of the Waffen-SS, the armed wing of Germany's Nazi party during World War II,<span style="color: Red;">*</span>according to U.S. Army intelligence files gathered by the International Consortium of Investigative Journalists. Those files indicate that Mossack moved to Panama in the early 1960s with his family and started his law practice years later.
Fonseca has been far more visible. He is the author of several books, including Mister Politicus,<span style="color: Red;">*</span>a 2012 novel "detailing the convoluted scheming of unscrupulous officials to gain power, and from there, satisfy their detestable ambitions."
He was also active politically, serving as a special adviser to Panamanian President Juan Carlos Varela and as president of the Panamenista political party.<span style="color: Red;">*</span>The two men have grown<span style="color: Red;">*</span>their business to 500 employees in more than 40 countries, including operations in the United States.
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But 2016 has already been difficult for the firm. Fonseca resigned from his political positions after Brazilian authorities raided the firm's offices there as part of the country's corruption probe. The firm also came under scrutiny in Germany in a probe of<span style="color: Red;">*</span>one of the country's largest banks.
And now, publication of the Panama Papers will prompt<span style="color: Red;">*</span>governments around the world to lookeven closer at Mossack Fonseca's work,<span style="color: Red;">*</span>including in Panama.
On Monday, President Varela issued a statement saying his government would "vigorously cooperate" with any requests for information to assist criminal investigations. And Panama's attorney general's office<span style="color: Red;">*</span>said it would open an investigation,<span style="color: Red;">*</span>according to TVN.
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