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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Friday, February 28, 2020

Manhattan U.S. Attorney Announces Guilty Plea Of U.S. Accountant In Panama Papers Investigation

Geoffrey S. Berman, the United States Attorney for the Southern District of New York and Brian A. Benczkowski, Assistant Attorney General of the Criminal Division of the U.S. Department of Justice, announced today that RICHARD GAFFEY, a/k/a “Dick Gaffey,” pled guilty today before U.S. District Judge Richard M. Berman to wire fraud, tax fraud, money laundering, aggravated identity theft, and other charges.  GAFFEY, a resident of Massachusetts, is charged along with Harald Joachim von der Goltz, Ramses Owens, and Dirk Brauer in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian-based global law firm, and its related entities.  Harald Joachim von der Goltz pled guilty to his role in the scheme on February 18, 2020.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Richard Gaffey went to extraordinary lengths to circumvent U.S. tax laws in order to maintain Harald Joachim von der Goltz’s wealth and hide it from the IRS.  Using the specialized criminal services of global law firm Mossack Fonseca, Gaffey assisted others in violating U.S. tax laws for decades.”

Assistant Attorney General Brian A. Benczkowski said:  “This defendant worked with the Mossack Fonseca law firm and exploited his role as an accountant to create fraudulent shell companies and defraud the United States of millions of dollars over decades.  Today’s guilty plea reflects the Department’s commitment to prosecute financial professionals and other gatekeepers to the U.S. financial system who abuse the public’s trust.”

According to the allegations contained in the Indictments[1], other filings in this case, and statements during court proceedings, including GAFFEY’s guilty plea hearing:

Since at least 2000 through 2018, GAFFEY conspired with others to defraud the United States by concealing his clients’ assets and investments, and the income generated by those assets and investments, from the Internal Revenue Service (“IRS”) through fraudulent, deceitful, and dishonest means.  During all relevant times, GAFFEY assisted U.S. taxpayers who were required to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts.  GAFFEY helped those U.S. taxpayers evade their tax reporting obligations in a variety of ways, including by hiding the beneficial ownership of his clients’ offshore shell companies and setting up bank accounts for those shell companies.  These shell companies and bank accounts made investments totaling tens of millions of dollars.  For one U.S. taxpayer, GAFFEY advised how to covertly repatriate approximately $3 million to the United States by reporting to the IRS a fictitious company sale that never actually occurred to evade paying the full U.S. tax amount.  GAFFEY was assisted in this scheme through the use of Mossack Fonseca, including Ramses Owens, a Panamanian lawyer who previously worked at Mossack Fonseca.

GAFFEY was the U.S. accountant for Harald Joachim von der Goltz.  From 2000 until 2017, von der Goltz was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income.  In furtherance of von der Goltz’s efforts to conceal his assets and income from the IRS, GAFFEY falsely claimed that von der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and – unlike von der Goltz – was not a U.S. taxpayer.  In support of this fraudulent scheme, GAFFEY submitted the name, date of birth, government passport number, address, and other means of identification of von der Goltz’s elderly mother to a U.S. bank in Manhattan.

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GAFFEY, 75, a U.S. citizen and resident of Medfield, Massachusetts, pled guilty to one count of conspiracy to commit tax evasion and to defraud the United States, which carries a maximum sentence of five years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison; four counts of willful failure to file Reports of Foreign Bank and Financial Accounts, FINCEN Reports 114, each of which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. 

GAFFEY is scheduled to be sentenced by Judge Berman on is June 29, 2020, at 11:00 a.m.  Von der Goltz is scheduled to be sentenced by Judge Berman on June 24, 2020, at 11:00 a.m.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.

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U.S. Attorney Berman praised the outstanding investigative work of IRS-Criminal Investigation and Homeland Security Investigations, and thanked the Justice Department’s Tax Division and the Federal Bureau of Investigation for their significant assistance in the investigation.  Mr. Berman also thanked the Criminal Division’s Office of International Affairs as well as law enforcement partners in France, the United Kingdom, Panama, and Germany for their assistance in the case.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, working in partnership with the Money Laundering and Asset Recovery Section of the Criminal Division.  Assistant United States Attorneys Eun Young Choi and Thane Rehn, along with Trial Attorneys Michael Parker and Parker Tobin of the Money Laundering and Asset Recovery Section, are in charge of the prosecution.

 

[1] As the introductory phrase signifies, the entirety of the texts of the Indictments and the descriptions of the Indictments set forth herein constitute only allegations as to Owens and Brauer, and every fact described should be treated as an allegation.

 

Topic(s): 
Financial Fraud
Tax
Contact: 
Jim Margolin, Nicholas Biase (212) 637-2600
Press Release Number: 
20-078
Updated February 28, 2020