The Justice Department has opened a formal criminal investigation into potentially widespread illegalities exposed by the Panama Papers, the massive leak of financial details about secret offshore accounts, federal law enforcement officials told NBC News Wednesday -- and its first priority will be finding wrongdoing by U.S. firms and individuals.
The U.S. Attorney in Manhattan, Preet Bharara, sent a letter to the International Consortium of Investigative Journalists (ICIJ), which has led a worldwide effort to report on suspected money laundering, tax evasion and other criminal activity exposed in the documents.
In his brief letter, Bharara said his office –- which has jurisdiction over many of the world’s largest banks and financial firms -– has “opened a criminal investigation regarding matters to which the Panama Papers are relevant.” The letter was dated April 3, the day ICIJ published its findings.
"The Office would greatly appreciate to opportunity to speak as soon as possible with any ICIJ employee or representative involved in the Panama Papers project in order to discuss this matter further,” Bharara added.
Many financial transactions related to global money laundering, drug trafficking and other illegal activity involve New York-based banks. A senior federal law enforcement official said the initial focus will be identifying illicit activity by American citizens and corporations.
Bharara’s efforts are the first evidence that criminal prosecutors from the Justice Department have become involved in the Panama Papers and will be looking for wrongdoing by U.S. companies and citizens. NBC News reported Sunday that IRS and U.S. Treasury officials have met with their counterparts from around the world in an effort to analyze and use the data about more than 214,000 offshore companies listed by Panamanian law firm Mossack Fonseca.
The Justice Department declined to comment, and ICIJ officials could not be immediately reached for comment. The letter was first reported by the Guardian, one of the many media partners working with the ICIJ and the German newspaper that initially obtained the documents, Süddeutsche Zeitung.
“We’re not talking about it,” said one federal law enforcement official who confirmed the existence of the letter and the probe.
Federal law enforcement officials are eagerly waiting for access to the documents, saying they will be enormously helpful in bolstering existing cases and also in launching new ones, especially as the names of people hiding behind thousands offshore companies are revealed.
So far, though, U.S. authorities can only go on what has been reported by the media. More than 300 reporters from around the world have been working on the joint Panama Papers effort, and they have disclosed a wealth of information about corrupt officials, criminals, celebrities and others who have set up offshore firms with the help of Mossack Fonseca.
Mossack Fonseca has denied any wrongdoing, saying it worked within existing laws and guidelines to help its clients set up legal accounts and that it was not aware of those accounts being used for illegal or illicit activities.
Stefan Cassella, a former deputy chief of the Justice Department’s Asset Forfeiture and Money Laundering Section, said New York is the logical place for the U.S. government to exploit the Panama Papers in criminal and civil cases. It has jurisdiction over many domestic cases involving the potentially thousands of U.S. citizens and companies that might have used Mossack Fonseca to help them hide criminal activity.
But it also gives the Justice Department jurisdiction over a wide range of international cases too, because individuals and companies often launder illicit funds through New York banks.
“They all want to be paid in dollars so the transactions go through New York,” Cassella told NBC News. “It’s just the way the global financial world works. The money passes through New York.”
