Money laundering is still a significant and attractive business. Indeed, for certain jurisdictions, including Panama. The country’s new president, José Raúl Mulino, has controversially dismissed the Panama Papers as a “hoax” following the acquittal of 28 defendants in a high-profile money laundering trial, ICIJ reports. The ruling has sparked concerns among legal experts about Panama’s commitment to combating corruption.
Acquittal Details
By the end of June, Judge Baloisa Marquínez acquitted all defendants, citing insufficient evidence and prosecutors’ failure to adhere to chain-of-custody protocols for electronic evidence. The trial involved figures linked to the Mossack Fonseca law firm, which was central to the 2016 Panama Papers leak, which exposed widespread offshore financial activities.
Carlos Barsallo, a Panamanian attorney and former president of Transparency International’s Panama chapter, criticized the prosecution’s mishandling of digital documents. “Maintaining the chain of custody for digital evidence like emails should have been straightforward,” he remarked.
The case underscores the challenges of prosecuting complex corruption cases and highlights the need for enhanced resources. Barsallo emphasized that more economic, human, and technical resources are essential for successful prosecution.
Trial Background
The 85-hour trial began in April, nearly eight years after the Panama Papers revelations. Prosecutors argued that Mossack Fonseca facilitated money laundering through shell companies linked to corruption scandals in Brazil, Germany, and Argentina. Despite the high-profile nature of the Panama Papers, Barsallo clarified that the trial focused on specific money laundering allegations rather than broader tax evasion issues.
Political Reactions
President Mulino’s inauguration speech on July 1 condemned the Panama Papers as an attack on Panama’s reputation. He vowed to restore the country’s image, asserting that the investigation unfairly targeted Panama.
Economist Joseph Stiglitz, co-author of a transparency report following the Panama Papers, defended the investigation’s significance. “The Panama Papers were instrumental in raising awareness about tax avoidance and money laundering,” he noted.
While Panama’s government seeks to move past the scandal, the acquittals raise broader questions about the effectiveness of anti-corruption measures and the global fight against financial crime.
