British Columbia’s money laundering is an emergency. The public deserves an inquiry.

By David Moscrop

In June 2018, former Royal Canadian Mounted Police officer Peter German released his report into money laundering in British Columbia. His independent review found that more than $75 million (or 100 million Canadian dollars) had been laundered through the province’s casinos. Canada’s westernmost province is home to about 4.8 million people, so that’s a hefty sum per capita.

In January, we learned that German’s figure was probably low — very, very low — given that an international report put the total amount laundered at more than 1 billion Canadian dollars per year. (The Canadian government knew this, evidently, but didn’t share with British Columbia in the summer.) The new report also includes details about sources of gangsterism not found in the German report. Now, British Columbia is undertaking two parallel processes to better understand what’s happening: a second German report, this time focused on real estate, horse racing and luxury vehicles, and a Department of Finance review.

All of that is perfectly fine — and perfectly inadequate.

Wise and wily governments survive in the long run because they can anticipate and manage crises. Journalist John Ibbitson calls it the “Rhodes Maxim,” citing Paul Rhodes, a former Progressive Conservative press secretary in Ontario, who once told him that the government he served handled controversies by asking itself “How will this end?” and then going there. Smart.

The maxim comes to mind today, with demands in British Columbia for a public inquiry into money laundering in the style of Quebec’s 2011 Charbonneau Commission, which probed public works corruption. That commission’s findings led to millions of dollars in fines, the resignation of politicians and a handful of high-profile arrests — alongside 60 reform recommendations. British Columbia’s largest union, the Government and Service Employees’ Union, is leading the call for a deep dive into the dark cave of misdeeds that hide links to fentanyl trafficking, out-of-control real estate prices and, almost surely, corrupt, complicit and incompetent public officials past and present.

As public pressure mounts on the government to launch an inquiry, the city of Vancouver — a central site for money laundering — has joined the call, as has Richmond, B.C., and the province’s capital city, VictoriaSo has the B.C. Green Party, whose support is critical for the government in the legislature. British Columbians already overwhelmingly support the idea, with 76 percent in favor and 73 percent expecting that an inquiry would expose the truth about what’s been going on in the province’s shadows for all these years — and what it has cost British Columbia in dollars, reputation (the scheme has become known as the Vancouver model), real estate prices, cost-of-living challenges and even lives (money laundering is linked to fentanyl trafficking, which has killed thousands in the province since 2012).

The entire thing is an emergency. Recently, a federal case — known as the E-Pirate investigation — related to money laundering in British Columbia resulted in stayed charges when the RCMP botched the case by exposing the identity of an informant. The investigation reads like something out of a crime novel. As investigative journalist Sam Cooper, perhaps the top journalist on this file, summarized it, “The E-Pirate investigation found loan sharks allegedly connected to drug-traffickers in China used legal and illegal Metro Vancouver casinos to wash drug cash, helping ultrawealthy high-rollers from China buy Vancouver real estate, and fund fentanyl imports into Canada.”

The truth must come out. And it looks like there’s lots to out.

So far, B.C. Premier John Horgan has been noncommittal and prone to temporizing. That’s unwise. He cites cost, time and existing fact-finding efforts as reasons to wait, as well as concerns that such an inquiry could interfere with developing prosecution efforts.

Please. A wide-ranging, long-term commission is critical to exposing the truth and rooting out corruption in the province. And it’s well worth the money (as a member of the Charbonneau Commission has said) — it might even pay for itself in fines and funds saved through reforms. Moreover, findings from a commission, which can compel witnesses to appear before it and require them to testify under oath, can be used in prosecutions. Meanwhile, every day without an inquiry is an extra day for thugs and crooks to get away with illicit acts that harm citizens and residents of the province.

The public is tired of waiting and already deeply suspicious of the province after years of inadequately addressing money laundering and its attendant issues under the previous government. Now, Canada and the world are watching and waiting. The premier and cabinet ought to recognize this fact now and follow the Rhodes Maxim by starting out where this issue will inevitably end and saving everyone the time, energy and frustration from the political posturing that will precede an eventual capitulation.

The province, first under the Liberals and now the New Democrats, has already wasted too much time waiting to get serious about organized crime. The delay is undermining governance in the province and destroying the lives of innocent people. Everyone knows what the right thing to do is. All that’s left is to do is get to it.

Iran rejects EU trade, anti-money laundering link

By AFP

Iran on Tuesday ruled out linkage between a new EU mechanism to trade with Tehran bypassing US sanctions and an anti-money laundering bill.

“Linking implementation of this mechanism… with the requirements of institutions such as the FATF is unacceptable,” the foreign ministry said, referring to the international Financial Action Task Force.

Iran is on an FATF blacklist drawn up to counter money laundering and the financing of terrorist groups, but the Paris-based organisation has suspended counter-measures since 2017 while Tehran works on reforms.

EU leaders on Monday welcomed the bloc’s new mechanism to trade with Iran but warned Tehran over its ballistic missile programme and regional policies while calling for it to implement reforms to comply with FATF demands.

Britain, France and Germany created the system last week to allow firms to trade with Iran without falling foul of US sanctions.

The foreign ministry, in its statement, welcomed the EU’s “positive stances” but also criticised the bloc’s warnings on its missile programme and its regional policies.

“Iran´s defence activities… are merely defensive, deterrent and a domestic matter that has never been on the agenda of our negotiations with other countries,” it said.

“Raising such issues under current regional circumstances and clear threats against the national security of the Islamic Republic of Iran is not constructive,” the ministry said.

It urged European countries “to take a realistic look at regional incidents and issues and not to be influenced” by the United States.

Brussels, for its part, hopes the special payment mechanism for trade with Iran — registered under the name INSTEX — will help save the 2015 nuclear deal between Tehran and major powers.

Washington has reimposed sanctions after President Donald Trump last year quit the accord which lifted the measures in exchange for curbs on Iran’s nuclear programme.

Iran has welcomed INSTEX as a “first step”, while US officials have said it would not affect its efforts to exert economic pressure on Tehran.

Dubai Has Become A “Money Laundering Paradise” Says Anti-Corruption Group

The Gulf city of Dubai has been slammed as a “money laundering paradise” by leading anti-corruption group Transparency International.

Dubai – one of the seven emirates that make up the UAE – has built a reputation as the pre-eminent business hub in the Middle East, with an open economy that welcomes companies and individuals from around the world. It is a city that has gained fame for giving supercars to its police and building palm-shaped islands in the sea. However, it has also garnered notoriety as a place where normal rules can at times be ignored or easily sidestepped.

In its latest Corruption Perceptions Index, anti-graft campaigning group Transparency International says that “Dubai has become an active global hub for money laundering … where the corrupt and other criminals can go to buy luxurious property with no restrictions.”

Citing investigations last year by the Organized Crime and Corruption Reporting Project and the Center for Advanced Defense Studies (C4ADS), Transparency International said that real estate worth millions of pounds can be bought in Dubai in exchange for cash with few questions ever asked.

In a report issued in June last year, C4ADS said it had identified 44 properties worth some $28.2m that were held directly by sanctioned individuals, and a further 37 properties worth almost $80m that were owned by members of these individuals’ wider networks. The data was based on a leaked database of property and residency data compiled by real estate professionals.

Clearly these issues are not new and indeed Transparency International has itself previously raised concerns about the dubious practices that go on in Dubai’s real estate market. Despite the negative publicity, however, the authorities appear reluctant to take decisive action.

Regional leader

Despite Dubai’s shortcomings, the UAE as a whole is actually the best rated country in the Middle East and North Africa region when it comes to corruption. In the 2018 Corruption Perceptions Index it is ranked 23 out of 180 countries, with a score of 70 points, closely followed by its near neighbor – and regional rival – Qatar, which is ranked 33 overall, with 62 points.

The index scores countries on a scale from  zero to 100, where zero is highly corrupt and 100 is very clean. The best rated country overall is Denmark with a score of 88 points.

While the UAE and Qatar score higher on the index than other countries in the region, this is largely due to their levels of economic and social development, says Transparency International. Both countries have relatively efficient public bureaucracies, high GDP levels and good health and education systems.

However, both countries also lack democratic institutions and a respect for political rights – something that is common throughout the Gulf and the wider MENA region – making them highly susceptible to corruption. “This leaves control of corruption up to the political will of the incumbent ruling class, which can change suddenly and leave any improvements in anti-corruption efforts behind,” says the Transparency International report.

There is also no freedom of the press in these countries and academics such as British research Matt Hedges have been actively targeted by the UAE authorities.

The opaque nature of the political and legal systems in the UAE can often prove frustrating for businesses. One prominent recent example is the battle over $496m in funds owned by a Kuwaiti investment firm – the money was frozen in a Dubai bank account in November 2017, but despite sustained lobbying of officials in Kuwait and the UAE it remains frozen at the time of writing.

U.S. charges top Chinese cellphone maker Huawei with money laundering, fraud

By Pete Williams and Ken Dilanian

WASHINGTON — The Trump administration announced criminal charges against one of China’s largest telecommunications companies Monday, a dramatic move that promises to ratchet up tensions on the eve of trade talks this week between the two countries.

Acting Attorney General Matthew Whitaker told reporters in Washington a pair of indictments had been unsealed in two separate cases. A Brooklyn grand jury charged Huawei as a company, and its chief financial officer, Wanzhou Meng, with money laundering, bank fraud, wire fraud and conspiracy. Huawei also was charged with conspiracy to obstruct justice.

A separate indictment accuses Huawei of stealing trade secrets from U.S. telecom firm T-Mobile. Those charges stem from a civil lawsuit filed by T-Mobile in 2014 over a robot called “Tappy,” which was used in testing smartphones.

“Huawei intentionally conspired to steal intellectual property from an American company in an attempt to undermine the free and fair marketplace,” the Justice Department said in a statement.

Meng, who was arrested in Canada in December, is accused of orchestrating a scheme to violate U.S. sanctions on Iran.

The Brooklyn indictment says Huawei used a Hong Kong shell company to sell equipment in Iran in violation of U.S. sanctions. Meng misled U.S. banks into believing that Hawei had no interest in the Hong Kong company, called Skycom, according to the Justice Department.

The indictment also charges Huawei with conspiracy to obstruct justice by destroying evidence and moving employees out of the U.S. so they could not be called as witnesses.

Meng is a daughter of Huawei’s founder, Ren Zhengfei, who served as an engineer in the People’s Liberation Army from 1974 to 1983. The U.S. is seeking her extradition.

“For over a decade, Huawei employed a strategy of lies and deceit to conduct and grow its business,” said Richard Donoghue, U.S. attorney for the Eastern District of New York.

FBI Director Christopher Wray said the charges “lay bare Huawei’s alleged blatant disregard for the laws of our country and standard global business practices.”

Huawei (pronounced “Wah-way”) is second only to Samsung as the world’s largest supplier of smartphones and has been heavily involved around the world in building the next generation of cellphone networks, known as 5G. The Trump administration has been pushing other countries to exclude the firm from that work, citing security risks.

Last year, six different U.S. intelligence agencies urged Americans not to buy Huawei phones — which are virtually unavailable in the U.S. And President Donald Trump signed a law blocking federal government agencies from using most of the company’s products.

The indictment against a leading Chinese company — and the harsh language senior Trump administration officials used to characterize its conduct — mark a sea change from the Obama administration, which was careful in how it characterized Chinese behavior, even as it secretly saw Chinese hackers siphoning U.S. intellectual property.

Separately, The Wall Street Journal reported on Jan. 16 that federal prosecutors are pursuing a criminal investigation of Huawei for allegedly stealing trade secrets from U.S. business partners, including technology used by T-Mobile to test smartphones.

The investigation grew in part out of civil lawsuits against Huawei, the Journal reported, including one in which a Seattle jury found Huawei liable for misappropriating robotic technology from T-Mobile’s lab in Bellevue, Washington.

In 2012, the House intelligence committee published an investigation concluding that Huawei and another Chinese telecom giant, ZTE, posed a threat to U.S. national security. The firms are essentially arms of the Chinese government, the House concluded, which aid and abet Chinese espionage and could implant spyware that could allow the Chinese government to easily intercept communications or mount cyberattacks on critical infrastructure, such as nuclear plants and power grids.

The companies deny spying for China.

American intelligence officials have long been concerned that Chinese firms insert “back doors” in telecommunications equipment that facilitates eavesdropping. If Chinese companies dominate the construction of 5G networks worldwide, officials fear Chinese spies won’t need back doors — they will have direct access to global telecommunications.

Still, U.S. officials have not put forward hard evidence linking Huawei to spying, and critics have pointed out that American spy agencies vacuum large swaths of private information — with court orders — from U.S. technology companies.

Talks aimed at resolving disputes over Chinese technology and trade policies are due to resume in Washington on Wednesday, led by the U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.

https://www.nbcnews.com/politics/national-security/u-s-charges-top-chinese-cellphone-maker-huawei-money-laundering-n963646

Danske Bank, ex-CEO are sued in U.S. over money laundering scandal

By Jonathan Stempel

NEW YORK (Reuters) – Danske Bank A/S and four former top executives were sued on Wednesday by a U.S. shareholder that accused Denmark’s largest bank of defrauding investors and inflating its share price by hiding and failing to stop widespread money laundering at its Estonian branch.

The complaint was filed in the U.S. District Court in Manhattan by a New York pension fund that is seeking class-action status and damages for investors in Danske’s American depositary shares from Jan. 9, 2014 to Oct. 23, 2018.

Danske was accused of being “intentionally less than forthcoming” to Danish regulators even after a whistleblower alerted the Copenhagen-based bank to suspected money laundering, while overstating its legitimate profitability and ability to thwart misconduct.

The bank did not immediately respond to requests for comment after market hours in Europe on behalf of the defendants, who include former Chief Executive Thomas Borgen, former Chairman Ole Andersen, and two former chief financial officers.

Borgen resigned last Sept. 19, when Danske said an internal probe had uncovered about 200 billion euros (US$231 billion) of payments made from 2007 to 2015 through its small Estonian branch, and that many payments appeared suspicious.

Andersen was replaced in December.

Authorities in Denmark, Estonia, Great Britain and the United States are investigating the payments, including in a criminal probe by the U.S. Department of Justice. Danske has said it has been cooperating with authorities.

The Sept. 19 report came one year after Danske expanded its probe into the Estonian branch, following what it called “a root cause analysis concluding that several major deficiencies led to the branch not being sufficiently effective in preventing it from potentially being used for money laundering.”

According to the complaint, the market value of Danske’s ADRs fell by more than $2.54 billion as investors learned of the full scope of the scandal.

It is common for shareholders to sue companies in the United States after what they consider unexpected share price declines.

The lawsuit is led by the Plumbers & Steamfitters Local 773 Pension Fund of Glens Falls, New York. Its law firm Robbins Geller Rudman & Dowd specializes in securities fraud.

The case is Plumbers & Steamfitters Local 773 Pension Fund vs Danske Bank A/S et al, U.S. District Court, Southern District of New York, No. 19-00235.

DEA agent linked to Colombian money laundering scheme, prosecutors say

By Scott Glover

(CNN)An agent with the US Drug Enforcement Administration is under investigation in connection with a scheme to launder millions of dollars for Colombian drug traffickers, CNN has learned.

The years-long conspiracy sometimes “involved the use of undercover accounts controlled by the DEA,” according to court papers filed in US District Court in Tampa, Florida.
The agent is not identified by name but is characterized as a “co-conspirator” in the case against a long-time DEA informant who has pleaded guilty to money laundering for the Colombians.
The agent, according to court papers, received cash payments from an account containing hundreds of thousands of dollars in drug money. The agent also directed additional money to be deposited into the accounts of his family members, the documents state.
A DEA spokeswoman in Washington declined comment.
Though the case was filed in Tampa, the prosecution is being overseen by the US Attorney’s Office in Atlanta, Georgia. The transfer of the matter to another jurisdiction is the sort of step federal authorities sometimes take in investigations involving allegations of official corruption.
Kurt Erskine, a top official in the US attorney’s office in Atlanta, declined comment on the case.
The information about the allegedly rogue agent is contained in a plea agreement between federal prosecutors and former DEA informant Gustavo Yabrudi, a Venezuelan-born Miami resident.
Yabrudi’s defense attorney, Leonardo E. Concepcion, said in an email that the case is “still active” and, “I cannot discuss it as this time.”
Yabrudi worked on and off as an informant for the DEA from 2010 to 2016 with stints in New York, Boston and Miami, according to court records. He was deactivated at one point in 2013 for “unauthorized money movements.”
According to court records, the agent identified as a co-conspirator instructed Yabrudi in 2015 to recruit someone to open a bank account under a false name in Miami. Hundreds of thousands of dollars “from illegal drug sales” was deposited into the account, the records state.
Neither the agent nor Yabrudi informed the DEA of the existence of the account, according to the court records.
The pair subsequently spread the money around among fellow conspirators who laundered the proceeds in various ways and got the money into the hands of traffickers in Colombia, the documents allege.
At least $7 million in “illegal funds” passed through a business account belonging to one co-conspirator, according to Yabrudi’s plea agreement.Yabrubi was charged with money laundering in September. He agreed to plead guilty later that same month.
In December, federal prosecutors and Yabrudi’s defense attorney filed a joint motion requesting that his sentencing be postponed for six months. He is currently set to be sentenced in May.
“The defendant is cooperating against others who facilitated sophisticated money laundering schemes, in part, by using undercover accounts that were shell companies and controlled by law enforcement,” the motion states. “Some of the illegal proceeds laundered during these schemes derived from drug trafficking and public corruption related offenses.” The agent’s current status with DEA is unclear.

Europe Ends Scandal-Plagued 2018 With Plan to Target Money Laundering

The European Council agreed recently to give greater supervisory powers to the European Banking Authority, ending a year defined by lender scandals with a plan to prevent money laundering.

One problem, however, is that the action doesn’t sufficiently address existing deficiencies spread across the bloc’s financial-services sector, according to lawyers and bankers.

The European Council first rolled out its proposals in September. Its leaders will have to reach an agreement with the European Parliament before the rules can be adopted and applied.

The European Union also earlier this year approved its fifth anti-money-laundering directive, requiring member states to implement new rules by 2020. But the rules are enforced by each individual state, leading to what many observers call a patchwork that leaves parts of the bloc open to abuse.

The U.S. has led the way on anti-money-laundering enforcement in recent years, but in the past year Europe has worked to catch up, while multiple lenders there faced scandal during the year.

Dutch prosecutors in September imposed a record fine on ING GroepNV, while Malta’s Pilatus Bank Ltd. this year lost its license to operate following allegations in the U.S. of money laundering and sanctions violations against its chairman. Meanwhile, Latvia’s ABLV Bank AS liquidated itself following U.S. allegations of money laundering, bribery and sanctions violations.

And a multilateral investigation into the Tallinn, Estonia, branch of Denmark’s Danske Bank A/S is continuing, with Estonian authorities in December making their first arrests as they probe a potential quarter-trillion-euro money-laundering scandal.

Simon Airey, a partner at the law firm Paul Hastings LLP, said there is a large disparity in anti-money-laundering controls between the best and worst banks and countries in Europe. That disparity has provided a feeding ground for organized criminals, kleptocrats and the professionals who enable them, he said.

The European Council “clearly thinks that the only way to achieve a more level playing field is through more centralized supervisory and enforcement powers,” he said.

Andris Ivanovs, a London-based associate at law firm Ropes & Gray LLP specializing in litigation and enforcement practices, said the agreement struck this month doesn’t address the fundamental vulnerabilities of money laundering that exist as a result of some member states failing to enforce the rules.

“The uncomfortable truth is that some member states will continue to be gateways into the EU financial system for proceeds of crime,” he said.

Israel becomes member of global body against money laundering, terror financing

By Sue Surkes

Israel on Monday became a full member of the Financial Action Task Force, an international body set up to combat money laundering, terrorist financing and other threats to the international financial system.

The Jewish state has now taken its place alongside 37 other members — including most of the G20, the world’s 20 leading industrialized and emerging economies — just 16 years after being blacklisted by the organization.

According to the Justice Ministry, a FATF compliance report on Israel — also issued Monday and based on a detailed compliance audit carried out in Israel earlier this year — ranked the country as one of three leading states, alongside the US and the UK, for the effectiveness of its anti-money laundering apparatus, its battle against terror financing, the work of its Money Laundering and Terror Financing Prohibition Authority, and its policy of seizing the financial proceeds of crime.

“Joining the organization is a national achievement on a political level, contributing to Israel’s ability to fight terrorist financing internationally, and strengthening the Israeli economy,” Justice Minister Ayelet Shaked told a press conference.

Membership also tags Israel as an attractive country for international investment and improve the status of the Israeli financial sector and its ability to operate in the global economy, Shaked added.

Shlomit Wagman-Ratner, head of the Israel Money Laundering and Terror Financing Authority, said, “The report reflects the decisive leap that Israel has taken over the past two decades in its perception of the need to protect the integrity and security of Israel’s financial system.”

FATF President Marshall Billingslea said, “In a comprehensive review of its anti-money laundering and terror financing regime, Israel successfully achieved good results in identifying and addressing the risks facing it.

“The review process is not the end point, but is Israel’s starting point for further strengthening the regime, and we are confident that in light of Israel’s commitment to protecting the integrity of its financial system, the county will act quickly to implement the recommended actions in the audit report.

“Membership in FATF opens a new chapter for Israel and will enrich FATF as an organization.”

Panama Papers: US files first criminal charges over money laundering scheme

By Will Fitzgibbon

United States authorities have charged four men, including two former Mossack Fonseca employees, with money laundering and fraud, the Department of Justice announced today.

The charges are the first in the U.S. following the Panama Papers investigation, which was first published in 2016 by the International Consortium of Investigative Journalists, Süddeutsche Zeitung and more than 100 global media partners.

Ramses Owens and Dirk Brauer, two former senior employees of the Panama-headquartered law firm, were charged with a string of offenses “in connection with their alleged roles in a decades-long criminal scheme,” the DOJ said in a statement.

Authorities also charged Boston-based accountant Richard Gaffey, and former U.S. taxpayer Harald Joachim Von Der Goltz with tax evasion, wire fraud and money laundering.

A statement from the DOJ alleges that the four men “defrauded the U.S. government through a large scale, intercontinental money laundering and wire fraud scheme.”

“These defendants went to extraordinary lengths to circumvent U.S. tax laws in order to maintain their wealth and the wealth of their clients,” said U.S. Attorney Geoffrey S. Berman.

“For decades, the defendants, employees and a client of global law firm Mossack Fonseca, allegedly shuffled millions of dollars through offshore accounts and created shell companies to hide fortunes.”

U.S. authorities partnered with enforcement agencies around the world to arrest Brauer in Paris, France, and Von Der Goltz in London, United Kingdom. Gaffey was arrested in Boston on Tuesday. Panamanian citizen Owens remains at large.

“These efforts reflect the commitment of U.S. law enforcement to follow that trail and apprehend these criminals regardless of where they are in the world.”

The men are presumed innocent until proven guilty.

According to the DOJ, Mossack Fonseca employees deliberately created bank accounts in tax havens to hinder enforcement investigations and advised U.S. taxpayers to secretly repatriate money. The names of the real owners of shell companies “generally did not appear” on offshore company paperwork.

The Panama Papers investigation was based on a trove of 11.5 million files from inside Mossack Fonseca that were leaked to reporters Bastian Obermayer and Frederik Obermaier at German newspaper Süddeutsche Zeitung, and shared with ICIJ. The investigation, done in collaboration with more than 370 reportersworking for 100 media outlets, exposed the offshore holdings of world political leaders, links to global scandals, and details of the hidden financial dealings of fraudsters, drug traffickers, billionaires, celebrities, sports stars and more.

German-born Von Der Goltz, who lived in the U.S. from 1984, allegedly evaded taxes through shell companies and offshore bank accounts.

The DOJ alleged that Von Der Goltz falsely claimed his mother, who lived in Guatemala and is now 102, owned companies and bank accounts. Von Der Goltz denied wrongdoing, according to a 2016 report from ICIJ media partner The New York Times.

Gaffey allegedly helped Von Der Goltz and another unnamed U.S. taxpayer evade taxes, the DOJ alleged.

“The charges announced today demonstrate our commitment to prosecute professionals who facilitate financial crime across international borders and the tax cheats who utilize their services,” said Assistant Attorney General Brian A. Benczkowski.

4 men charged with fraud, money laundering in connection to Panama Papers investigation

By Doha Madani

The Department of Justice filed charges including fraud and money laundering against four individuals, one a U.S. citizen, in connection with their alleged roles in a decades long criminal scheme perpetrated by Mossack Fonseca & Co, a Panamanian global law firm.

The case is part of an investigation stemming from the Panama Papers, a massive leak of financial details about secret offshore accounts in 2016.

Richard Gaffey, a U.S. citizen; Ramses Owens, 50, of Panama; and Dirk Brauer, 54, and Harald Joachim Von Der Goltz, 81, both German citizens, were charged in an indictment unsealed on Tuesday, according to a Department of Justice press release.

“They had a playbook to repatriate untaxed money into the U.S. banking system. Now, their international tax scheme is over, and these defendants face years in prison for their crimes,” Berman said.

Prosecutors say Owens and Brauer, while working with Mossack Fonseca clients, marketed, created, and serviced sham foundations and shell companies in foreign countries to conceal U.S. taxpayers’ actual incomes from the IRS, the Justice Department said in a statement.

Von Der Goltz was allegedly one of those clients and was assisted by Gaffey, an accountant, the statement said.

Three of the four defendants named in the indictment have been arrested while Owens, a Panamanian attorney, remains at large.

Owens, Gaffey and Von Der Goltz were charged with one count each of wire fraud, money laundering conspiracy, and conspiracy to commit tax evasion. Owens and Brauer were also charged with one count each of conspiracy to defraud the United States and conspiracy to commit wire fraud.

In addition, Gaffey and Von Der Goltz were charged with four counts of willful failure to file an FBAR, a disclosure report for U.S. taxpayers who have foreign financial accounts or interests worth more than $10,000. Von Der Goltz is also facing two counts of making false statements.