Tax Havens of the Rich and Powerful Exposed Panorama

Tonight on Panorama we expose the secret world of tax havens.

It's very easy for criminals, tax evaders, money launderers to go

and take that secrecy and hide their behaviour behind it.

An enormous leak of confidential documents reveals the truth

about offshore.

These documents contain countless stories about the rich and powerful,

and how they hide their wealth.

The world leaders with secrets to hide.

Our documents show why people use tax havens.

A world so secret, we might never get to know the truth.

That property in north London, you must have made about ?1 million

on that.

Did you tell the tax man about that?

Tonight we go inside the Panamanian company that helps the rich

and powerful hide their wealth.

These weren't Robin Hood robbers, you know, they were really

nasty, vicious men.

It was a brutal robbery.

Three tonnes of gold stolen from the Brinks Mat

warehouse near London.

Can you just imagine the fear?

You're lying there, you can't see what's happening,

there's a bloke flicking a lighter saying he's going to set fire

to all this petrol.

The gold was melted down and sold, and cash was hidden offshore.

When were you last down here, then?

About 1987, I would think.

Long time ago now.

Former detective Billy Miller's job was to find the money.

And some of it had been spent on property.

This house in Kent was bought with Brink's Mat loot using a secret

Panamanian front company.

Why would this house then be owned by a Panamanian company?

Well, it was just a cover.

Nobody would think, you know, it doesn't belong to

a launderer for Brinks Mat.

It's, this company owns it so it must be OK, you know?

Now, we have found a crucial memo.

The organisation which helped create the front company

carried on working for the client, even after being warned

they were involved with

the proceeds of the famous robbery at Brinks Mat in London.

What's clear, crystal clear, as you can see, is that the people

who were helping them keep the money out of your reach,

knew that it was from the Brinks Mat robbery.

Well once they knew that it was from the

Brinks Mat robbery, they should have washed their hands of it and should

have had no more to do with it.

So it makes them as bad as the man who bought the house.

In the end, the police managed to trace most of the Brinks Mat

loot, though it took years.

What's shocking is the company that helped launder some of the cash has

Welcome to Panama.

It's a long way from criminal gangs in London.

It's carnival, but Panama makes much of its living

as an important tax haven.

Billions of dollars a year flow through this tiny

Central American country.

Panama helps you hide your wealth.

What Panama sells is secrecy, you can go to Panama and you can get

a foundation or a trust or a company and you can use those complicated

and slightly strange structures to hide and disguise your ownership

and control of assets.

And Panama is the home of one of the world's biggest providers

of offshore services.

Mossack Fonseca has offices in 27 countries.

It's the company that helped the Brink's Mat robbers.

From the outside, Mossack Fonseca looks like a

perfectly respectable company.

But this is a business that's helped people from around the world

break the law.

We know because 11 million documents from Mossack Fonseca

have been leaked.

They were handed to a German newspaper, Suddeutsche Zeitung.

It shared them with the International Consortium

of Investigative Journalists.

Together with Guardian and more than 100 media organizations

around the world, we've been analyzing them.

I think the leak will prove to be probably the biggest blow

the offshore world has ever taken because of the extent

of the documents, they span over a 40-year period and they really

tell the day-to-day, almost point by point,

of the offshore world.

We've found links to 72 current or former heads of state,

including dictators accused of looting their countries.

So what is it that Mossack Fonseca does to attract all these clients?

Well, they hide your involvement in a company so no one will know.

So, nobody knew about the secret company of the Icelandic Prime

Minister, Sigmundur Gunnlaugson.

It was an offshore company called Wintris and he and his wife had

shares in it.

It held her family wealth.

But nobody knew his wife had interests in Iceland's banks worth

millions of dollars.

And nobody knew she could potentially benefit from her

husband's policies to help the banks.

They do now.

Mr Gunnlaugson says his wife was the true owner and didn't

benefit financially from his decisions.

But he never declared an interest to the Icelandic Parliament.

Today he is facing calls for his resignation.

Mr Gunnlaugson says he has not broken any rules.

Some of the deals we have found are a bit more sophisticated.

Mossack Fonseca helped set up what seems to be a billion-dollar

money laundering operation involving close associates of Vladimir Putin.

This is Sergei Roldugin.

A famous cellist and one of President Putin's oldest friends.

How close are Putin and Roldugin now?

They remain very close.

Roldugin is the godfather of Putin's oldest daughter,

Mariya.

I think he's one of those people who remains part of the personal

inner circle, and close to him on a level that's more

intimate than certainly any government official.

But the documents show it's a relationship someone

wanted to hide.

This is an application for a bank account for one his companies.

And it asks whether Mr Roldugin has any relations to politically exposed

persons, or PEPs.

And the answer here is no.

And that is simply not true.

So, why hide it?

Well, it could be the suspicious deals being carried out under

Mr Roldugin's name.

Take this example - one of the companies owned

by the cellist borrows $6 million.

Three months later, the loan is written off for just $1.

The company has been given $6 million.

In another suspicious deal, the offshore company buys the rights

to the repayments on a $200 million loan, again for a dollar.

Why would anyone want to give all this money to a cellist?

There's nothing that I have seen which would me

make do anything other

than say stop, we need to investigate very closely what's

going on here.

To you does it look like money laundering?

Yes, it does look like money laundering to me, for sure.

The deals were managed by Bank Rossiya, which was described

as the personal bank for senior Russian officials

when it was sanctioned by the US government.

The Mossack Fonseca files show highly complex deals,

in the name of a cellist who runs a music school.

So what's going on?

If a man who says to you he's not a businessman has his name over

deals worth hundreds of millions, would you imagine that those deals

and that money is being held for somebody else?

I would.

I would not imagine that he was somebody who controlled

a vast financial empire.

Mr Roldugin hasn't answered our questions.

So, is he simply a front man for somebody else?

It looks to me as though he is

an instrument,

who is playing him as an instrument is unclear.

Why does this leak matter in the UK?

Well, for starters, 100,000 properties here are owned

by offshore companies.

It's all about secrecy, and often about avoiding tax.

This is Nick Hague, a millionaire property investor.

The Mossack Fonseca files show he owned UK properties

through a secret offshore company.

This is Islington in north London.

It's wealthy, it's fashionable, very sought after.

Now, Nick Hague, he owned one of the houses on this street

and he sold it for a whacking great profit.

But he did he tell the tax man?

He sold the house for nearly ?1 million more

than he bought it for.

In an email, Mr Hague told me his offshore company:

"fully complied with HMRC legislation in 2014 in relation

to the disposal of this property."

But is that the full story?

Or is it really about sleight of hand?

That Mr Hague is trying to look like his offshore company

is in charge, when really it's him?

It's a Mossack Fonseca speciality, to help investors like Mr Hague

pretend they're not running their own company.

Directors can be hired to rubber-stamp decisions.

You can be sold a nominee, that means that someone

will put their name down on the company documents.

Whereas in fact you're behind there in the shadows

pulling the strings.

That's exactly what Mr Hague is doing.

So what's the advantage?

Well, if his offshore company is managed overseas,

it might not be taxed here in the UK.

Richard Brooks is a former tax inspector who now writes for

Private Eye.

The structure serves two purposes.

One it keeps the ultimate ownership of all these things secret.

And it also enables you to claim that any profits you make on these

properties are tax free.

If HMRC saw all this, what would they make of it?

I'm pretty sure they would have some tough questions for Mr Hague.

Hiya.

I'm Richard Bilton from BBC Panorama.

I want to know if Mr Hague has a genuine reason

for running his business in this way.

That property in north London, you must have made about ?1 million

on that.

Did you tell the tax man about that?

Richard, you've had my answer via email.

Yes, but these are such...

OK, Richard, I've given you my answer.

What is that then?

Does the taxman know about that money?

He should know, shouldn't he?

Are you deaf?

I'm not deaf but...

Hard of hearing?

There's no problem with me.

Listen...

I'm just trying to get straight answers from you and that's

proving a bit more difficult, to be honest.

Richard, with all due respect, I gave you my answer via email.

You've had it. Yes.

I have made my position clear. Right.

And that's all I've got to say.

I know but there are some problems with that.

There isn't, Richard.

Do you control an offshore company that you don't tell the taxman,

because I think that you might?

Richard, you've got to stop laughing.

I'm interested.

These are serious issues.

I'm smiling because you're having a go at me, but I'm interested

to know what you think?

I'm armed with a baguette.

So I'm not having a go at you.

OK?

Have you told the taxman that you control that company?

I have already made my position clear.

Now have a good day.

Mr Hague's lawyer later told us he had always acted within the law

and his arrangements were a matter for his advisers and HMRC.

He's made his position clear, he says.

Not to me, I have to say.

We still think that's a man who controls an offshore interest,

but pretends that he doesn't.

Mossack Fonseca say the services they provide are "commonly used

worldwide" and they are "responsible members of the global financial

and business community".

They "strongly disagree" that their primary function

is to facilitate tax avoidance and evasion.

But dig around in the files and it's clear that a lot of their business

is about tax.

This memo gives the game away.

It was written by one of the partners of Mossack Fonseca

and it says in Spanish that "95% of our work consists in selling

vehicles to avoid taxes."

The Prime Minister's late father was one of those who used

Mossack Fonseca's services.

The files show Ian Cameron helped set up a company in Panama.

They wanted to attract investors to put their money in a fund

so they made sure it never paid UK tax.

Mr Cameron and other directors would fly to the Bahamas for board

meetings so they could say the company was run offshore.

But there is more. the company was run offshore.

The Mossack Fonseca files reveal investors held their stake

through bearer shares.

Now they were used widely at the time, but are now banned

in many countries because they can be used for money laundering

and tax evasion.

A bearer share is a piece of paper saying that you own a share

of a company.

paper, which means you can hide your ownership of bearer shares.

And when it comes to declaring what assets, what wealth you have,

what income you have, it really leaves it just

The Prime Minister has been demanding greater transparency

So that's why we need to shine a spotlight on who owns

going to go ahead, but it's also going to be open to the public.

He's introducing a register of beneficial owners that will list

the ultimate owners of UK companies.

But we have discovered that Mossack Fonseca is prepared to help

clients get around even such in-depth checks.

This is Marianna Olszewski.

I wanted to earn enough money so I can create the life

I really wanted to.

And I did.

She's a business guru and life coach.

It's all about living the life of your dreams and taking control

of your money.

And taking control is what she wanted to do.

The files show she had $1.8 million secretly invested offshore.

She wanted to get her money back.

But the bank wouldn't release her funds until they knew

the identity of the beneficial owner.

One way to become aware of how much money you really have and how much

you're spending is to keep track of it in what I call a money diary.

She was desperate not to be named,

to pretend to be the owner of the cash.

"We may use a natural person who will act as the beneficial owner

and therefore his name will be disclosed to the bank.

Since this is a very sensitive matter, fees are quite high."

It's highly problematic if a company is providing fake beneficial

ownership information to a bank and undermines the credibility

of our anti-money laundering system that's designed to deter tax

evasion, corruption and money laundering.

It's a blatant breach of anti-money laundering rules,

but Ms Olszewski signed up.

When a company like Mossack Fonseca offers fake beneficial owner

services, that is completely undermining all international

efforts to open up company ownership.

Then you completely pull the rug out from under the whole system.

Ms Olszewski didn't respond to our questions.

Mossack Fonseca say allegations that they provide shareholders

with structures to hide the identity of the real owners are completely

unsupported and false.

They conduct "thorough due diligence" and have "always complied

with international protocols" to ensure companies are not used

for illicit purposes.

It is true that not everyone in the files is up to no good.

But they are full of examples of how Mossack Fonseca's services allow

the wealthy to lie.

Even on deals paid for by you and me.

Chris Hudson helped finance an NHS hospital.

But the files show he moved money from the project to a secretive

Panamanian Foundation.

I called him to ask why.

Hi.

Is that Chris Hudson?

It is, yes.

Hi, Chris.

The Yarrow Foundation is so secretive, even Mr Hudson

doesn't seem to know much about it.

Is Yarrow anything to do with you?

It was.

I don't think it's even functioning anymore, is it?

What's your relationship with Yarrow then?

I don't have one.

Did you ever have a foundation in Panama?

Did I? No.

You didn't have that? No.

But the Mossack Fonseca documents paint a different picture.

He was the principal beneficiary, the money was his.

Has Yarrow ever paid any money into your UK bank accounts?

You just asked me that.

Yeah, and what did you say?

I said no.

But it did.

Here's the proof.

This is Mr Hudson instructing Yarrow to pay 85,000 euros

into his London account.

He even used the Foundation to make a down payment on a jumbo jet

for a business venture.

But in a letter to us he lied about that as well.

"The idea that a Panamanian entity has been or indeed could be used

to buy a 747 is fanciful in the extreme."

But here's the proof.

This is what a down payment for a 747 looks like.

Mr Hudson said to me the Yarrow Foundation,

he didn't set it up and it was nothing much

to do with him.

The document here contradicts that.

It seems to be very much to do with him.

So, why does this matter?

Well, we think the Foundation has been set up to help

Mr Hudson avoid tax.

But the secrecy stops us knowing for sure.

Secrecy stops everyone knowing.

I think it's time for a word with Mr Hudson.

He has consistently misled us about the Yarrow Foundation.

He says it's nothing to do with him.

And we're pretty sure that it is.

Mr Hudson. Hi.

It's Richard Bilton from Panorama.

Can I grab a quick word with you?

Why did you tell me that the Yarrow Foundation

was nothing to do with you, sir?

Ah, he's gone inside.

That's a shame.

Sir, you just saw me and I know you are in there.

Why don't you just answer my questions?

I've got notes that says you're the principle beneficiary,

that you were asking them to send money.

You're just there.

Why don't you answer the questions, sir?

I don't think...

Sir, would you tell me why you told me

a lie about the Yarrow Foundation?

I can't hear you now.

Sir, would you just tell me that?

Er, I'd be very, very grateful.

Why don't you just answer the question?

This is your chance, sir.

I've told you.

It's a bit rich, isn't it?

You were getting money from the taxpayer for the hospital.

Whaaaay!

Is that the way you answer, sir, by driving a car at me?

I asked you straightforward questions about the Yarrow

Foundation and you told me that it was nothing to do

with you and you are the principle beneficiary, sir.

Anything to say?

I told you.

I could prove to you that there's no tax been avoided and you've refused

to do that.

You told me a lie.

Mr Hudson did offer to show us he'd done nothing wrong,

but only in a meeting we couldn't report.

So we asked him to provide his evidence openly.

He hasn't done so.

Blimey.

He wasn't keen to answer our questions.

I haven't had a car driven at me for a while.

The thing is, he was pretty straightforward and said

the Yarrow Foundation was nothing to do with him.

He's the principal beneficiary.

Mossack Fonseca say that for 40 years they've "operated

beyond reproach" and have "never been accused or charged

in connection with criminal wrongdoing."

They say they have a "strong compliance record," their services

are "regulated on multiple levels" and are used "for

a variety of legitimate reasons".

But the leaked documents tell a rather different story.

The Mossack Fonseca files reveal how the rich and powerful use tax havens

to hide their secrets.

What this shows is that you can't rely on tax havens and the people

who operate there to open up ? they won't, they'll carry

on concealing as long as they can operate.

What you need is to shut down the tax haven models.

It's really time that the world didn't have tax havens.

As long as places like Panama are allowed to sell secrecy,

wealthy people will want to buy it.

And governments that promise fair taxes whether you're rich or poor

may find it impossible to deliver.