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Monthly Archives: May 2017

Former Soccer Official Pleads Guilty To Money Laundering Charge

According to DoJ on May 24, 2017 in federal court in Brooklyn, Costas Takkas, a 60 yr old UK national pleaded guilty to money laundering conspiracy in connection with his receipt and transmission of millions of dollars in bribes paid to now-former CONCACAF president and FIFA vice president, Jeffrey Webb.
Takkas, a former general secretary of the Cayman Islands soccer federation, was the attaché to Webb at the time of Takkas’s arrest in Zurich, Switzerland pursuant to an indictment unsealed in May 2015 alleging various corrupt schemes in organized soccer.
At sentencing, Takkas faces a maximum sentence of 20 years
According to court filings and facts presented during the plea proceeding, Webb accepted a $3 million bribe in exchange for using his influence as a soccer official to award and enforce a contract granting two sports marketing companies the media and marketing rights to home World Cup qualifier matches played by teams representing soccer federations of the Caribbean Football Union during the 2018 and 2022 qualification cycles.
  • TRAFFIC USA. Webb, Takkas, and representatives of Traffic USA, one of the sports marketing companies, arranged for Traffic USA to secretly funnel half of Webb’s $3 million bribe through front companies and accounts controlled by Takkas. 
  • After receiving this $1.5 million, Takkas distributed these funds at Webb’s direction.  
  • MEDIA WORLD. the other sports marketing company, paid approximately $500,000 of its $1.5 million share of the bribe money through a sham transaction involving a false invoice, to accounts controlled by Takkas.
Webb pleaded guilty to racketeering conspiracy and other offenses on November 23, 2015 and, in his allocution, he admitted, among other things, accepting this bribe.
The guilty plea announced today is part of an investigation into corruption in international soccer led by:
  • the U.S. Attorney’s Office for the Eastern District of New York,
  • the FBI New York Field Office, and
  • the IRS-CI Los Angeles Field Office.
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Where Are They Now? A Year Later, Mixed Fortunes For Panama Papers Line-Up

When the International Consortium of Investigative Journalists and more than 100 media partners began publishing the Panama Papers investigation on April 3, 2016, almost no country was untouched by its revelations.

Governments in more than 70 Countries have launched over 150 Investigations, Inquiries, Audits and Probes into the affairs of Thousands of People and Corporations linked to Notorious "Panama Papers".
Just last month, Malta’s tax office announced it had recovered more than $10 million as a result of investigations sparked by the Panama Papers and another ICIJ project, Swiss Leaks.
One year after the Panama Papers first became an international catchphrase, here’s a globe-hopping update on the people and institutions caught up in the scandal:
The Law Firm and the Eponymous Jurisdiction

articles/00Response/170403-watn-01In March, Mossack Fonseca, the Panama-headquartered law firm at the center of the Panama Papers affair, announced that it had been forced to dismiss 250 employees from its offices worldwide due to the “current media, political and economic environment.”

Authorities in Panama have detained Jürgen Mossack and Ramón Fonseca, the firm’s founders, since Feb. 9 on money laundering charges.

The men’s lawyer, Guillermina McDonald, denies her clients are guilty of wrongdoing and has accused Panama’s government of “selective justice” in its investigation of Mossack and Fonseca.

Last month, a Panamanian prosecutor held a press conference to update the public on the investigation into Mossack Fonseca, and claimed to have a “solid case”against the firm. Mossack Fonseca’s lawyers denied the government’s accusations and called for the men’s release.

Iceland votes, but what has changed?

articles/00Response/170403-watn-02Sigmundur Davíð Gunnlaugsson, who resigned as prime ministertwo days after the Panama Papers story first broke, remains a member of parliament.

Gunnlaugsson, who was forced to step down because of reports linking him and his wife to an offshore company, maintains an active Facebook profile, posting about Icelandic banking, new hospitals and the delights of raw meat on crackers.

When his replacement, Bjarni Benediktsson, took over as Iceland’s new prime minister in January 2017, critics noted that his name, too, had been included in the Panama Papers. Benediktsson used an offshore company to hold four apartments in Dubai, he said in response to the Panama Papers revelations.

Can’t stop the music in Russia

Sergei Roldugin, a classical musician and close friend of President Vladimir Putin, has played on even in the wake of Panama Papers documents that place him inside a circle of Putin friends who used offshore companies and bank account to secretly move some $2 billionaround the world. Roldugin played the cello at a concert in Palmyra, Syria, in May 2016, one month after Panama Papers reports about him made global headlines.

Later in 2016, Putin gave the cellist and conductor a national award to recognize his contribution as an “outstanding citizen.” In February 2017, Russian media reported that the government had granted a tax exemption to an education foundation established by Roldugin in the city of Sochi.

Fallout differs in Pakistan and India


Pakistani Prime Minister Nawaz Sharif has been under pressure for a year in the face the Panama Papers’ revelations that his children owned shell companiesthat held homes in London.

In September, thousands of protestersswelled Islamabad’s streets to call for Sharif’s resignation. Opposition parties have been attacking him in court, alleging that Sharif failed to declare his family’s offshore connections. Sharif and members of his family deny wrongdoing. A decision in the case by Pakistan’s Supreme Court is expected any day.

Meanwhile, across the border in India, focus has been fixed on the efforts of the multi-agency taskforce created to investigate India’s black cash scandals: just last month, regulators announced that their probe has expanded to 424 Indian clients of Mossack Fonseca.

Uncertainty reigns in U.S. political upheavals

With Donald Trump in the White House, it’s unclear what will happen with Panama Papers-related investigations started during the Obama administration by the Senate Finance Committee and by the office the U.S. Attorney’s office in Manhattan.

In March, Trump fired Preet Bharara, long-time U.S. Attorney for Manhattan, raising concerns about whether aggressive investigations by the office would be stymied. The Senate committee did not respond to ICIJ’s requests for information on the status of the investigations while the Department of Justice refused to comment.

Investigation goes on

In the 12 months since the Panama Papers published, ICIJ has continued investigating the massive dataset at the project’s core. We’ve added more than 100 additional reporters, mostly from countries where we hadn’t worked previously, to take the overall number of collaborators well beyond 500 journalists.

The work of ICIJ and its many global partners has gone on to be honored with prizes or shortlisted for dozens of international awards, and journalists continue producing new investigative stories based on Panama Papers data on a regular basis.

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7th Circuit Also Upholds Reg. That Limit Discussion of Tax Liability at CDP Hearings.

The Court of Appeals for the Seventh Circuit, in Our Country Home Enterprises, Inc., (CA 7 5/3/2017) 119 AFTR 2d ¶ 2017-729, affirmed the Tax Court and agreed with similar holdings by the Fourth and Tenth Circuits, has held that a portion of Reg. § 301.6330-1(e)(3) is a reasonable interpretation of the Code.

That portion specifies that a conference with the Appeals Office is a prior opportunity for purposes of the rule that precludes a taxpayer from raising the issue of his tax liability at a collection due process (CDP) hearing if he had a prior opportunity to dispute that liability.

Under § 6330(c)(4)(A)'s plain language, because Our Country Home raised the issue of its liability in a prior hearing before the Appeals Office, and because Our Country Home participated meaningfully in that hearing, Our Country Home could not contest its liability again in its CDP hearing.

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Offshore Tax Suit To Switch From OVDP To Streamline Doesn’t Block Collection

According to Law360, three taxpayers seeking to switch over to the IRS’ new “streamlined” compliance program for unreported offshore income argued to a D.C. Circuit panel Tuesday that their lawsuit is not foreclosed by the Anti-Injunction Act's bar on pre-enforcement tax challenges, attacking the government’s key defense in the case. The case is Maze et al. v. Internal Revenue Service et al., case number 16-5265, in the U.S. Court of Appeals for the District of Columbia Circuit.

Eva Maze, Suzanne Batra and Margot Lichtenstein have asked the appeals court to reverse a lower court’s ruling dismissing their suit, which aims to allow the taxpayers to jump from an older compliance program, known as the IRS Offshore Voluntary Disclosure Program, to a streamlined procedure with several advantages by eliminating strict transition rules they claim run afoul of the Administrative Procedure Act.

U.S. District Judge Colleen Kollar-Kotelly held in July that the taxpayers’ consolidated suit would violate the Anti-Injunction Act that prohibits federal courts from taking actions that would restrict the collection of taxes. If the plaintiffs successfully jumped from one disclosure program to another, as they sued to do, it would prevent the IRS from collecting accurate penalties for the tax years at issue and make it more difficult for the agency to backtrack and collect penalties the agency was otherwise entitled to for previous years, Judge Kollar-Kotelly said.

Representing the taxpayers, George M. Clarke III of Baker McKenzie said that all the taxpayers’ suit aims to do is get an injunction blocking the rules that are preventing them from applying to the streamlined program, not stop the IRS from collecting taxes.

U.S. Circuit Judge Thomas B. Griffith seemed unconvinced by the argument. The lawsuit, he said, “seems to me to be in the wheelhouse of what the Anti-Injunction Act is talking about.”

Griffith asked why the taxpayers couldn’t just pay the penalty under the existing program and file a refund suit raising the same challenge to the transition rules. Clarke replied that the taxpayers will be foreclosed from pursuing such an action if they stay in the OVDP program, because of the closing agreement they would have to sign, while opting out of the program would waive the right to challenge the rules.

When Maze, Batra and Lichtenstein launched their suit in October 2015, they argued that they were forced to comply with an arbitrary set of rules in connection with the 2014 offshore income program because they had voluntarily participated in an earlier version of the disclosure program.

A few years later, the IRS revealed its 2014 streamlined filing compliance procedures, under which individuals who had inadvertently not reported certain offshore income could correct these errors in exchange for reduced penalties. But the IRS refused to allow individuals who previously entered into the 2012 voluntary disclosure program to access those benefits unless they complied with a set of transition rules, according to the suit.

The plaintiffs asked the court to remove the transition rules for being unlawful, noting that applicants who enter directly into the 2014 streamlined program can participate by certifying that their failure to report certain offshore assets had not been willful, and saying it was then up to the IRS to uncover willfulness. However, applicants who participated in the overseas voluntary disclosure program before July 2014 must affirmatively prove nonwillfulness before being allowed to enter into the 2014 SFCP, the suit claimed.

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