Federal prosecutors should not describe offshore entities as shell companies or call Panama or the British Virgin Islands tax havens in the upcoming Panama Papers criminal trial in New York, according to defense attorneys.
Motions filed in New Yorks Southern District court last week by lawyers for Joachim von der Goltz, a former U.S. taxpayer, and Richard Gaffey, a Massachusetts accountant, seek to blast a hole in the United States governments allegations of tax evasion, wire fraud and money laundering. Prosecutors allege that von der Goltz evaded U.S. taxes through offshore companies with the help of Gaffey and employees of Panama law firm Mossack Fonseca. Documents leaked from the law firm form the basis of the International Consortium of Investigative Journalists 2016 Panama Papers investigation. Von der Goltz and Gaffey allegedly hid the formers ownership of shell companies and millions of dollars in assets by falsely claiming that von der Goltzs Guatemalan mother was the owner, according to prosecutors.
The men deny all charges. Von der Goltz managed the companies on his mothers behalf, he claims.
Last week, attorneys asked Judge Richard M. Berman to exclude portions of the governments evidence as prejudicial to a fair trial by jury. Judge Berman has not yet ruled on the request.
Gaffey and von der Goltz told Judge Berman that the words shell company and tax haven would inflame the passions of the jury. As a result of the sensational attention that the Panama Papers disclosures have drawn, including hundreds of newspaper articles, numerous books, and a motion picture with several Oscar winners in the cast and crew, the concept of shell companies has become a four-letter word synonymous with illicit financial activity, attorneys wrote. Attorneys cited a scene from the 2019 Netflix film The Laundromat in which Meryl Streeps character links shell companies to the death of her husband.
Attorneys also argued that the federal government should not be allowed to claim that U.S. citizens were victims of von der Goltzs alleged tax evasion. Comments about harm to United States citizens may lead the jury erroneously to assume that Mr. von der Goltz is responsible for the widespread ramifications of the alleged misdeeds revealed by the Panama Papers, attorneys wrote.
Gaffeys attorneys also asked Judge Berman to bar evidence of Gaffeys exchanges with another former Mossack Fonseca client, Marianna Olszewski.