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Potential investigations into offshore usage

Member: Nifa

Following the hacking of computer records at a law firm in Bermuda, some of the UK’s wealthiest individuals are bracing themselves for an investigation by HM Revenue & Customs (HMRC) into their use of a major offshore company.
Although the hack happened last year, HMRC is said to have known about it for some time, but the law firm has only just admitted that it suffered a breach.

News of the breach comes nearly 18 months after the release of the so-called ‘Panama Papers’, which revealed that a large number of wealthy figures in business and politics have used offshore accounts to mitigate tax.

The law firm, Appleby, which also has offices in the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Mauritius and the Seychelles, has warned its clients they could be implicated following the huge leak of highly sensitive information, but it has denied any wrongdoing either on behalf of itself or its clients.

After the release of the Panama Papers from law firm Mossack Fonseca, some of the world’s wealthiest tax evaders were exposed.

Now, data exposed in the Appleby breach has been analysed by the Consortium of Investigative Journalists (ICIJ), the same group that investigated the Panama Papers, which has found that the firm had apparently routinely used unencrypted mail for sensitive communications and was in possession of around 11.5 million documents related to more than 200,000 offshore firms.

If HMRC does take an interest in Appleby’s British clients, it is likely to put its best forensic accountants on the case. Using their expertise, they will likely be able to trace any suspect transfers or emails as they begin investigations into the use of offshore accounts and businesses to evade tax.

Author: Roger Isaacs, 2 November 2017

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